IT Execution: The Great Profit Advantage Factor

IT Execution: The Great Profit Advantage Factor

I stand guilty before my peers. In my relentless desire to lower my golf handicap, I am constantly looking for new technology to help me in my quest to lower my scores. Guess what? With all this great technology that I’ve purchased I am now hitting the ball further but, unfortunately, further out of bounds!

Sometimes during a tough day at the links, I yearn for my trusty old clubs that I used a couple of sets ago. You see, I am just not good enough on the fundamentals, nor can I change my fundamentals enough to allow the new technology to do what it is intended to do—hence the frustration of raised expectations not being met and a lighter wallet. So much for technology helping my golf game.

I see this analogy played out in dealerships many times over. Dealers are investing in new technology only to discover that it is not improving their “score.”  So I ask—when does technology really work at the dealership? The answer has a number of levels.

If it is “no-brainer technology” that is easy to use (maybe even easier than what I currently have) and no process change is required, it probably will work out just fine. The trade-off questions to ask are: Is the additional benefit that I derive from this new technology in excess of its incremental cost. Are my current processes adequate enough for the dealership to become a leader or at least remain competitive?

If, on the other hand, the new technology requires a process change then the answer becomes more complex. Can or will the dealership have the ability or the desire or the culture to change its processes to incorporate this technology as part of its activity-based applications? If the process side does not change to accommodate this new technology, then the dealership will not realize the intended benefits. Probably at the end of the road the vendor is going to be blamed because they sold you the “sizzle and not the steak.” Somehow the features and benefits demonstrated did not percolate down to achieve the intended results.

However, there comes a time when there is a fork in the road and you have to choose one of two paths. You either stay the way you are and choose not to change processes as more compelling technology becomes available or you make sure that your processes do change because the marketplace dictates that you have to embrace this new technology if you don’t want to be left behind. Because of the marketplace you, in essence, have no choice because if you don’t change you are going to be at a competitive disadvantage.

Let’s look at some current technology applications and evaluate them as to their “chance to succeed.”

Who’s Calling and other like vendors who “manage” incoming calls.
No process change necessary, just use the information you get. Questions to ask: Am I getting my money’s worth? The answer largely comes from answering this second question: What is the level of management involvement in reviewing the data and training?

Outside Third Party Follow-up Systems.
I don’t like them pulling data from your DMS or the spotty impersonal contact format some unfortunately have, but they are easy to use and better than no contact at all.

Service Pricing Guides. A great product, but it requires a lot of up-front work in process changes. If you are able to overcome this hurdle and have management monitor the Service Guide utilization of the Service Advisor, this application is a hands-down winner as it lifts your labor margins and hours per repair order. We have validated the studies here and the increases realized are spectacular.

VoIP. Initially the cost saving is not significant, but as time goes on, and because of the flexibility and scalability of VoIP, it will save you a lot of money. There is very little process transformation to start with, but this will change when you want to start using some of the compelling and sophisticated features that tie VoIP directly into customer contact management, such as customer screen pops and personalized contact data. This application dovetails neatly into CRM, however it is elusive to master, except for the highly focused, process driven implementers.

CRM/BDC
. A lot of heavy lifting needed to get processes and culture aligned to this different way of doing business. If you are a dealership, it is imperative to be successful in this arena from a cost/benefit perspective. The shift to initial Internet purchase contact is moving away from the traditional channels and you merely have to look at how newspapers are struggling because of falling advertising revenue to see that there is a significant shift away from this traditional advertising option. Surprisingly, CRM/BDC and Internet sales are a lot more process than technology intensive and as a result there is a high implementation failure rate.

I feel, with all of the technology and process-changing methodology out there, many in our clan are feeling intimidated by it all. The underlying issue facing dealerships today is: how do I start feeling comfortable with technology—knowing just enough to ask the right questions, and then how far and how fast do I go down the technology pathway? Also, what unbiased resources are available to help me map out a strategy that will ratchet our business to become more adept at technology applications?

I believe that one of the best possible ways to get a feel for what’s out there, where it’s going and what is the best way to get there in a structured, organized manner is to attend the upcoming Automotive IT Symposium, which will be held at the Hyatt Regency DFW Airport, May 8 and 9. Most of the well-established technology providers will be there in their own break-out rooms and the workshops will be facilitated by folks who can actually answer your questions.

Forgive me if I sound self-serving, but the specific reason we are committed to this symposium is that the need for this kind of forum is growing exponentially for dealers, managers and IT professionals and there are simply not enough opportunities available for this group of dealership personnel. Should you want more information about the IT Symposium, please visit Digital Dealer online at http://www.imakenews.com/digital1/
and scroll down to ‘Events’ at the bottom of the page.

Just as new golf courses are being redesigned to make it more difficult for the pros who are competently using advanced technology to excel, so is it with our business. The game is getting tougher as competing dealers strive to successfully merge technology with process. Don’t let your competition pass you by; you must stay on top of your game.

This article by Jeff Sacks originally appeared in Dealer Magazine.

Jeff Sacks, president of Jeff Sacks & Associates, is an auto industry speaker, consultant and trainer and is actively involved with dealership and OEM consulting and training.
His website is www.jeffsacksauto.com and his phone number is 800-867-2160.