LAS VEGAS -- Bob Brockman's Universal Computer Systems Inc., of Houston, acquired the larger Reynolds and Reynolds Co. for $2.8 billion in October. Brockman, now the chairman of Reynolds, spoke with Staff Reporter Ralph Kisiel at the Reynolds booth during the National Automobile Dealers Association convention and exhibition here this month. It was Brockman's first NADA convention as Reynolds' chairman.
What is your role, and what is (Vice Chairman) Fin O'Neill's role?
Fin, based on his previous work experience, has lots of dealer contacts. He knows lots of people in the industry, many more than I do. He's got a great reputation out there of being a real straight shooter. He's been the voice of Reynolds to the customers the last couple of years. That's his strength.
My strength is in product development. If you think about it from a specialization standpoint, that means I'm more of an inside guy, whereas he's more of an outside guy.
Of the things that need to be done at Reynolds today, development needs to be better, which is my forte. Fin's forte is representing the company to the customers, which has been going good and needs to continue. That's how we kind of split the day. If I was a guy like Fin, we'd be elbowing each other for space. As it is, we don't bump into each other a lot. We call on some of the major accounts together. But the rest of the time I've been off working on other things.
What kind of changes are you making at Reynolds?
Rightly or wrongly, Reynolds had been on a path of outsourcing that I don't agree with. We're actively recruiting entry-level technical people to replace that which was done in India, which was software development and testing. The mailroom's been outsourced, the custodian's been outsourced, security's been outsourced, and all that's coming back in. We think employment will be at least equal, if not grow.
Technically, Reynolds is a UCS subsidiary. Will you legally change that?
When we get around to it. It's not a real priority at this point. We'll actually formally merge the two companies together, and there won't be any subsidiary or that kind of nonsense. But from an operating standpoint, it's all one company already.
From this point forward, must all third-party vendors that want data from a dealership's Reynolds system be certified through the Reynolds Certified Interface program?
Is it your intentions to continue the Reynolds Certified Interface program?
Reynolds, rather than a third-party vendor, will do the actual data extraction?
Yes. We have within the dealership system as much personal information as there would be inside banks. Can you image a bank that would have a dial-in modem attached to its system where, if the bank felt like it, it could give out the password and let third parties access it? The suggestion is ludicrous.
Won't third-party vendors pass on to the dealers the fee that Reynolds will charge to extract the data?
This issue of cost getting passed along to the dealer, for the 100 or so (third-party vendors) we've got here so far, it doesn't appear to be an issue. So therefore, we would think that's kind of overblown.
For the third-party vendor, whoever it is, it's a lot easier for him to get it from one source, all one place, uniform. He doesn't have to dial in every day to try to pull information out, or screen-scrape or something like that. It presents a very reliable way.
ADP Dealer Services will not prohibit dealers from providing their vendors with a user ID and password to extract data. What are your thoughts about that?
I don't understand ADP's position. Other than to be obstinate, than to be opposite, I can't imagine from a business standpoint that that's truly their position. And frankly it would be my opinion that after awhile they probably change that position.
Has Reynolds come to agreement with Digital Motorworks on extracting service parts data from Honda and Acura dealership management systems?
Not as yet. That's an interesting situation because we are basically doing all the work. Honda has elected to use Digital as a provider. We're perfectly happy to be a subcontractor to Digital, but they don't seem to think the price is reasonable.
What challenges does Microsoft face entering this market?
First of all, they have to have software that really works and does all the functions a dealership wants it to do. Dealers want a complete system, or as complete as they can get. They have to have the manufacturer interfaces. That in itself, having been a veteran of those wars for many years, is not trivial. There's a lot of complexity there, a lot of testing. You really effectively can't sell systems without those interfaces.
You've got to have a group of people that understands the dealership business, that can go into a dealership and convert from whatever system they are on and teach the people how to make the new system work. You've got to have the documentation, all the manuals.
You've got to have the telephone support where you've got experts sitting on the phones, the classes to teach the users how to use the software and the sales force that understands the retail market space. You've got to have all the contract administration structure.
Are you concerned about Microsoft entering the market?
If Microsoft had set up a development center in Redmond, Wash.; hired a thousand people; and decided to really get after it, probably all of us would have a little concern. There's no sign of that. None at all.
Are you having fun at the show?
It's busy. Certainly the press interaction part is something different. I was always too small. I never got this kind of attention before. I guess I'm a junkie for intellectual stimulation, and man, I'm getting a mainline. It is fast and furious, and that's cool, I really get a kick out of it.
You may e-mail Ralph Kisiel at [email protected]