A DMS is the hub of your business. Think of it as your dealership’s brain, as well as its eyes and ears. The glue that holds your operation together. The reality is, the DMS is all that and more.
That is why the idea of replacing a DMS has historically been a daunting one for dealers. After all, switching to a new system can feel like giving your dealership a heart transplant. But there is a better way. With cloud-native technology, you can now get a modern solution without the heartburn.
A GPS recalculates your position whenever you are going in the wrong direction. Why not take time to reconsider your current DMS, especially if it is keeping you from reaching your goals? Hopefully, the information in this post can help point you down the right path.
We highlight reasons why you should reconsider your current DMS and look at a more modern option available today.
A DMS is used to manage inventory and customers, structure deals, manage websites, schedule service, pull credit reports, track reconditioning and flooring expenses, and so on. Whether it is inside a dealership or web-based, a DMS should have your back. Simply put, it is where you go to find answers or plan your next course of action.
However, DMS technology itself has been going through a paradigm shift in recent years. This includes the move from in-house servers to cloud-native solutions.
Implementing a new DMS should not be taken lightly, but it is crucial to avoid the mindset of:
If you are already planning a migration to a new DMS, remember to ask your current provider questions – many of which are included in this guide.
Getting the right information will help ensure that you get the best solution for your dealership.
Depending on your answers, it may be time to reconsider your current DMS solution.
These results are based on the 2021 Dealer DMS Sentiment Survey.
Reasons why dealers selected their current DMS
Reasons why dealers are unhappy with current DMS
Top 3 reasons dealers would switch their DMS
Dealers cite quality of support (29%) as a reason they selected their current DMS provider. Yet quality of support is often an attribute that dealers describe as one of their current vendor’s greatest limitations.
When dealers choose a DMS, they should expect more than just a software. The level of client service should be inherent in the provider’s partnership with the dealership – from the point of installation to continuous support.
Security is the number one reason why dealers picked their current DMS solution. It is no wonder since experts expect cyberattacks to increase every year. The good news is that active monitoring should avoid 93% of breaches if those software solutions are continuously updated. Yet, over 70% of dealerships are not up-to-date on their antivirus software (source: Total Dealer Compliance).
Moving a DMS from a premise-based solution to the cloud, aka the internet, makes sense. It provides greater uptime and can protect a dealership’s assets from being hacked or ransomed. That’s because a cloud-native DMS is resilient and enables a dealership to recover quickly from a disaster. Data stored on the cloud is encrypted and always up to date.
Dealers cite ease of use (26%) as a reason for dissatisfaction with their current DMS – and with good reason. Automotive retail must constantly deal with employee turnover. If the solution is too difficult to master, training and onboarding costs will be higher. It is no surprise that “ease of use” is a critical benchmark for productivity. Even time spent doing simple tasks takes longer if the DMS is hard to use.
For example, DMS products often require using multiple screens just to write a RO. It would be more efficient to stay on one screen, make changes to the database and have those changes updated immediately throughout the DMS. Best of all, an intuitive user interface means teams can get trained and ready to go quickly.
The second top reason dealers are unhappy with their current DMS is price (26%), just after ease of use.
Dealers do not want to hear that they are suddenly out of licenses for new users or need to upgrade because they bought another store. Likewise, they fear getting trapped in auto-renewing or extending contracts. They certainly do not want to feel as if they are paying for the same software over and over again. Their original DMS contract might have 3-4 items compared to their current invoice that has now grown to 3-4 pages.
So, what do dealers want? They want simplified, transparent invoicing and a clear way to understand the total cost of ownership. Above all, they do not want to be nickeled and dimed along the way.
Price is also the second most important reason a dealer would switch their DMS (30%). Those numbers are not surprising when considering how often hidden data fees are tacked onto an invoice. A common practice by certain major DMS providers. Data integration fees are extra costs to the core DMS expense and can quickly add up, blindsiding the dealer.
Dealers should review their DMS invoices carefully to understand how much they are paying for third-party data integration fees.
The DMS is the most complex software for a dealership. It is no surprise then that legacy systems often become bloated over time with numerous features and functionalities, many of which are no longer relevant yet add to lag time, slow performance and rising costs.
Dealers should evaluate their existing processes and the most used features in their current DMS. Identify processes that are no longer effective and hone in on a DMS that can help facilitate the most efficient way to conduct today’s business.
Mostly loved by lawyers, contracts are the cost of doing business. But fair warning: contracts are much easier to get into than get out of. So be careful when signing on the dotted line.
Dealers should get comfortable with the DMS provider’s contract terms before committing. Some DMS providers post their Terms and Conditions online and can change them at will, without notification, during the contract term. Look for auto-renew clauses, early-out penalties, reassignment clauses or any extra expenses that might not have been considered. Be sure to ask these questions before signing.
DMS technology is in transition, moving away from premise-based solutions to the more secure web-based environment that is easily accessible on any device. Gone are the days of a down server creating company-wide chaos, and impacting all of the third-party solutions that need its data. By transitioning their DMS to the internet, dealers are in better control of their own destiny. As a result, they enjoy greater data security, uptimes, accessibility and timeliness.
Your DMS is the hub of your dealership, and when it is down, your business stops dead in its tracks. Nothing can go out and nothing can come in. Does your staff even remember how to calculate a deal or write a RO by hand?
Isn’t it time to take a closer look at your current DMS and decide if it can take your business where it needs to be in the 21st century?