ADP Dealer Services says that in the past couple of years, sales of the online version of its dealership management system have outpaced those of the installed version. The off-site version is used at 4,500 rooftops.
Gartner analyst Thilo Koslowski predicts off-site systems will gain in popularity in the next five years. He cites benefits that include "leaner technology infrastructure requirements at the dealership" and better integration with automakers' and other partners' technology.
Korum Automotive Group in Puyallup, Wash., also switched to an online system. The retailer has four franchises and 160 employees.
CFO Carol Skinner says using software online has been significantly less complicated and expensive.
"The money was the major motivator that got us started, but it led us into looking into every process we have here," Skinner says.
"People can work from wherever with the Internet, and so we have our salespeople provide their own laptops and we provide wireless," she says. "I think everyone is taking a very serious look at these programs."
Korum had been using Reynolds and Reynolds and moved over to Arkona.
Like ADP, Reynolds offers an online product, ERA XTD. "We look at it as a business choice for them to make," says Reynolds spokesman Thomas Schwartz. "It makes up a small portion of our customer base."
He declined to say what percentage of Reynolds' sales are online systems. But he says larger, multipoint dealers are the most likely to consider off-site servers. A lot of dealers, he says, "may like the fact that they can walk in the room and look at it and know that all their data is right there."