How store succeeded in sign-or-switch situation

Inside 'mission impossible': A DMS change

How store succeeded in sign-or-switch situation

Service Director Richard Goodson and Operations Manager Rachel Bachrodt were key players in the hurried DMS changeover.
Related Topics

For auto dealers, switching dealer management system software is like a heart transplant.

So Rachel Bachrodt, operating manager of Lou Bachrodt Chevrolet in Rockford, Ill., faced an excruciating decision in late October. That's when the dealership's longtime DMS vendor, Reynolds and Reynolds, gave her an ultimatum: sign a long-term contract or lose service in 60 days.

DMS software handles all the crucial operations of a dealership, from accounting and reporting to finance, inventory and service.

Outraged by the deadline, she decided to switch vendors and hire ADP Dealer Services for the Chevrolet store and a sister Buick-GMC store nearby on the same Reynolds contract.

Her decision launched intense software training, lots of staff overtime and relentless deadlines to get the new software installed and operating.

But thanks to extra help from ADP -- and a classy assist from Reynolds -- she accomplished what she calls "mission impossible." The dealership switched in less than 45 days, going live with ADP software on Dec. 17, just in time for the year end sales and reporting crunch.

Now, Bachrodt is relieved that the ordeal, which underlined why dealers switch dealer management systems so infrequently, is over. The Bach-rodt family sells about 60 new vehicles a month at the Chevrolet store and 35 a month at the Buick-GMC store.

"It's not been easy. But it wasn't nearly as scary as I thought it would be," she said.

Taking the plunge


Reynolds said about 15 dealerships and groups in the United States were operating on monthly contracts, and all were required to sign at least one-year deals. Reynolds spokesman Tom Schwartz said the company wanted to get all its dealerships on standard long-term contracts. Most cases were resolved without issue, he said.

After Reynolds' 60-day ultimatum, Bachrodt said she was determined not to stay with Reynolds. Her dealerships had not missed a payment in 30 years, she said, so a 60-day deadline was unreasonable.

Ideally, Lou Bachrodt Chevrolet would have taken a year preparing to switch DMS vendors, said Bachrodt. That's the time it typically takes to compare vendors and their systems, negotiate the capabilities needed and test the selection in various parts of the dealership.

But when her DMS-buying consultant, the Paul Gillrie Institute, said ADP would do the switch before year end, she took the plunge.

The first task was to get employees trained on the new system before it was installed. In two weeks starting about Nov. 25, all 140 employees at the two stores took online training offered by ADP in three-hour webinars or other special sessions, Bachrodt said.

She said employees had to be trained on an entirely different computer system whose screens, strokes and intuitive feel are different from those of the Reynolds system. Some of Lou Bachrodt's employees had been using the Reynolds systems for 30 years.

Covering for all that training required employees to work overtime. Richard Goodson, the parts and service director at Lou Bachrodt Chevrolet, said service advisers volunteered to work weekends so colleagues could get their training and customers could get regular service.

Assist from Reynolds


Meanwhile, ADP sent more than 15 employees to the stores from all over the country, Bachrodt said. They fanned out at the two stores to assist employees. The warranty administrator of the main store was shadowed all day by a designated ADP employee, she said.

Tony Graham, a regional ADP vice president, said ADP deployed a "quick response team." A key to making it work was the engagement and commitment that the dealership's leaders and staff demonstrated during the project, he said.

What Rachel Bachrodt thought might be the trickiest part of the switch, the crucial data transfer of all files from the Reynolds system to the ADP cloud repository, turned out to be among the easiest.

Stories have traveled for years on the dealer grapevine of an outgoing DMS vendor dragging its feet on the crucial data exchange to a competitor's system.

But Reynolds cooperated to move the data to ADP. Reynolds' Schwartz said it's a fact of life that some dealers will switch DMS vendors in any given year, and that Reynolds views the data exchange as business as usual.

The Bachrodt family owns stores in Florida and Volkswagen and BMW dealerships in Rockford that continue to operate on separate Reynolds DMS contracts.

Back in balance


In the end, the stores paid a "fair price" for ADP's newest "Drive" version, Bachrodt said. It comes to about the same $17,500 per month that the stores had paid for the much older Reynolds version it had been on for years, she said.

The ADP package includes about $200,000 in upfront technology and setup costs that will be paid for monthly over the course of the five-year agreement, she said.

She said she was surprised by how smoothly the transition went. The stores made it through the difficult holiday season, including Thanksgiving and Christmas, without losing sales or service opportunities, she said.

Despite cooperation from Reynolds, Bachrodt said she worried constantly about how the switch would work on Day One. Most dealers spend a year changing DMS vendors, vetting the system and testing it out slowly in the various parts of the operations.

When the stores' financial data first went live, the new ADP system and the outgoing Reynolds one matched in payroll, accounts receivable and every other measure virtually to the penny.

Said Bachrodt: "It was then I felt we were going to be OK."

You can reach David Barkholz at dbarkholz@crain.com. -- Follow David on Twitter and


advertising
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

Or submit an online comment below. (Terms and Conditions)


Newsletters & Alerts
Latest Headlines