Survivors of DMS shifts tell their tales

May 08, 2017 01:00 AM

AUTOMOTIVE NEWS ILLUSTRATION

A DMS switch is among the most challenging undertakings for a dealership.

Talking about the installation of a new dealership management system elicits a colorful list of descriptions from dealers and providers. None sounds too pleasant.

Some liken the DMS change to a heart transplant or a knee replacement. Others say it's akin to reading a foreign language or teaching someone how to write with their opposite hand.

While the descriptions vary, dealers agree that it can be a grueling process that touches every level of a store. It's not something they want to do often.

The DMS is the nerve center of a dealership. It's the platform from which stores conduct business related to payroll, accounting, parts, inventory and service.

The reasons for putting in a different DMS can differ based on a dealership's needs. Some stores can jump ship because of customer service annoyances, while others may get acquired by a larger group and not have much of a choice.

Then there's money. Some providers can charge fees crossing $6,000 per month, prompting stores to look for relief after the contract is up.

A DMS switch is among the most challenging undertakings for a dealership.

Staffers have to partake in extensive training via online tutorials and in-person sessions to learn new systems. Animosity can emerge when store managers try to sell a DMS switch to staffers who want no part of a new platform. Those hard feelings can make the process difficult for everybody, including the provider.

Steve Moses, partner with Moses Auto Group in West Virginia, said some staffers had to learn a whole new system but that the pain was worth it to achieve uniformity.

Steve Moses, partner Moses Auto Group

"The unfamiliarity is a big challenge, and with that comes consternation and fear. Probably, your first step is reassuring people they can make the transition."

Some disgruntled staffers, for instance, may refuse to learn the system in an effort to stop the dealership from switching, says Mike Esposito, CEO of DMS provider Auto/Mate.

"The best installations happen when the people in the dealership are behind the change. If they're not, and they haven't been consulted or brought into the loop, that's when it gets difficult," Esposito told Automotive News. "People don't like change. ... They start digging their heels in."

Other stores have vintage problems -- literally. Sharon Kitzman, general manager of Dealertrack DMS, said she's come across stores using incompatible Windows operating systems that are three or four releases old.

Every store has its own nuances that add unique wrinkles to the changeover. Upper management at five stores shared details of their DMS transitions with Automotive News.

■ Group buys stores, then decides to get them on the same DMS

Moses Auto Group acquired four new stores last spring and had to make a decision that confronts many dealers: Do we convert the newly purchased stores to the DMS we're using, or let them continue to work on a rival system?

The West Virginia group, a longtime user of CDK Global's DMS, was at the end of its contract.

The new stores, on the other hand, had been on the Reynolds and Reynolds DMS for years. But in a coincidental twist, the contract for those stores was nearing its end as well.

So Reynolds and CDK extended both contracts for a year as Moses Auto Group negotiated with both sides. The group brought in a consultant who presented the software giants with what the stores needed. This allowed the companies to build their proposals.

After weighing the strengths of both companies for months, the group decided to remain with CDK because of its familiarity with the system.

The new dealerships would have to convert.

This meant the new staffers would have to endure around four months of webinars and other online training. CDK also had trainers on-site for several months at the new Moses Auto stores during the transition.

"All of the people at the new stores had to learn a whole new system. That's always a challenge," said Steve Moses, a partner with Moses Auto Group. "The language is a little different. The processes are a little different."

He added, "The folks at the stores we acquired, they've been on Reynolds for 20 years probably. The unfamiliarity is a big challenge, and with that comes consternation and fear. Probably, your first step is reassuring people they can make the transition."

Switching out a DMS requires stores to alter how daily tasks are done.

Moses said the service shops at the new dealerships had to learn to write tickets differently. The stores had to change how they interacted with some vendors. In addition, he said form creation in the finance and insurance offices changed because of differences in how information was pulled to the management and accounting sides of the dealership.

Moses felt the pain was worth it because the group is all about uniformity. This uniformity means the group can promote employees from one store to another without having to retrain them on a new DMS.

Plus, if someone gets sick and needs time away, staffers from other stores can cover for them because they already know the system.

The new Moses stores, which sell Chevrolet, Nissan, Toyota and Lexus vehicles, had the CDK DMS installed over several days in January.

At this stage, Moses said, the stores are in the "refining" phase. He said it's critical that stores inform their DMS provider as soon as possible if they intend to make a switch. This ensures that dealerships aren't breaking any contractual obligations that can lead to fines.

Moses said the changeover period, when accounting for training and installation, took around six months. The task list for CDK during that time included pulling data into the new system and integrating with websites.

Moses said changing a DMS is a huge undertaking that many dealers would rather not do. It's tough, but sometimes there's no way around it.

Moses said: "First you cringe, then you say, "OK, this will probably be for the better.' Then you learn it, then you get through it and it's like "I really don't want to do this again, but I'm glad I did it.'"

■ Dealership group takes a ride on the DMS carousel

John AltmanCOO, Beyer Automotive Group

"Make sure they do all the online tests and classes prior, and don't skimp on the training."

For some dealers, going through one DMS conversion provides enough stress to last a career. Beyer Automotive Group can top that.

The five-store group in northern Virginia has managed to swap out its DMS several times over the past nine years for various reasons.

Around 2008, the group moved from Reynolds to Dealertrack. But the group only stuck with it for a year before jumping back to Reynolds.

John Altman, the group's COO, said Dealertrack was having issues at the time dealing with larger multistore groups that had a centralized accounting structure. It wasn't a good fit.

So the brand stood firm with Reynolds until last May, when it realigned with a more-developed Dealertrack, which Altman said had rectified its previous problems. On this go-round, Altman said the group was looking to cut expenses.

The move back to Dealertrack equated to $500,000 in annual savings.

While the change made financial sense, some in upper management detested the move. One of the most important -- and difficult -- parts of a DMS switch can be getting everyone on board in the first place.

Altman: Staffers threatened to quit.

Heath Thompsongeneral manager, Ronnie Thompson Ford

"Every department at your dealership uses it. Everybody has to learn a new system and make sure everything off the old system gets transferred. It's insane."

The parts and service department was among the biggest critics of returning to Dealertrack.

"We've had people who've been there for 30 years. They're so used to doing things one way. Several of them said, "If you switch, I will leave,'" Altman recalled. "Luckily, we didn't lose a single person. They figured it out. We got through their anxieties and fears, and we worked through it."

After the installation was done, Altman said, several staffers told him they didn't like the system, but it worked.

The group put in legwork to make everyone comfortable. At one point, Altman said, he took his entire management staff to a dealership a few hours away that had converted from Reynolds to Dealertrack.

The employees there told Altman's team about what they liked and disliked about the system. The insights gave Altman and his staff confidence to make the switch.

Dealertrack was able to seamlessly transfer the group's data into the new DMS, which was Altman's biggest concern.

Looking back, however, Altman wishes he would have been tougher on his team about completing their training online before the system went live. The group's employees lacked knowledge in some areas, which put even more importance on the training chops of the Dealertrack team.

Altman said Dealertrack had around three people at each store for the two weeks after the system was activated. The group received further support from a Dealertrack rep who did one follow-up visit with the stores each month.

"Give your people enough time to know it's going to happen. Give them good forewarning," Altman said in advice to dealers thinking about making a DMS change. "Make sure they do all the online tests and classes prior, and don't skimp on the training."

■ DMS switch? You're going to need computers first

Around four years ago, Heath Thompson was ready to back out of a newly signed contract with CDK, then known as ADP Dealer Services, after being told his store would need new computers to make the conversion from Reynolds.

Thompson, general manager at Ronnie Thompson Ford in East Ellijay, Ga., said his father signed the contract but then retired six months later for health reasons. After the contract was inked, the store tried to stay on a month-to-month deal with Reynolds until CDK began pushing the store to begin the transition.

Heath Thompson of Ronnie Thompson Ford said the DMS switch that was expected to save money actually cost the store more because it had to lease computers and printers.

Getting out of the contract would've required a legal fight that Thompson said wasn't worth it.

The store assumed the switch would lead to considerable cost savings over Reynolds, but that didn't pan out as hoped because it had to lease computers and printers from CDK.

The $5,000 monthly price tag the store now pays for CDK isn't as much lower than expected than the $6,400 it paid for Reynolds. And during the three-year hardware lease, Thompson said, the monthly bill was actually higher than what the store was paying with Reynolds.

The store ended up buying its own computers after the lease was up.

Thompson doesn't plan to stay with CDK when his contract expires. He hasn't been pleased with its customer service.

He said if dealers want to truly save money on a DMS, they're better off going with smaller players such as Autosoft and Auto/Mate, where monthly payments could fall under $2,000.

The training for the new DMS required late nights. Thompson's store would close at 7 p.m., but staffers would be there as late as 11, learning the ins and outs of the new setup.

Thompson said just about anyone who's been through a conversion doesn't want to do it again because of the growing pains. Even with solid training, problems can emerge to vex dealerships six months after the system has gone live.

If a store finds a DMS it can live with it, Thompson said, it doesn't look to change all of a sudden. The system is connected to every facet of the dealership.

"Every department at your dealership uses it. Everybody has to learn a new system and make sure everything off the old system gets transferred. It's insane," Thompson said. "Everything in your dealership ties back to your DMS, all the way from cars that are on the Internet to the parts department to your payroll."

■ Store goes all-in with one provider for all of its needs

Bryan Honda went through a period of "constructive chaos" beginning last spring, when it decided to go all-in with Reynolds technology, its management says.

The goal was simple: Do away with the labyrinth of third-party vendors and put the reins of the dealership into the hands of one provider.

Bryan Honda's unconventional move stands out in a time when stores are using nearly 20 vendors, on average, to run day-to-day operations, according to Reynolds.

The store, in Fayetteville, N.C., not only upgraded its aging Reynolds DMS to the company's latest ERA-Ignite offering, it entrusted the software giant to handle its phone systems, fixed operations, marketing, website design and other tasks to form a cohesive retail management apparatus.

The store, which has been loyal to Reynolds for decades, began negotiations on the expansive deal in 2015.

This ambitious undertaking led to a hurricane of activity at the store beginning in April 2016. Many of the Reynolds solutions were installed over a 90-day stretch while other integrations occurred in the fall.

This was the first time Reynolds had outfitted a dealership with its full suite of solutions. The ERA-Ignite DMS, the platform on which all of the other systems integrated, came first. Numerous Reynolds teams in charge of installing the various systems converged on the store. In fact, many had never crossed paths before and were introduced to one another while there.

Day by day, the list of gadgets that meshed with the store's new DMS grew. The roster included the docuPAD tool, which lets F&I managers work through deals on a large desktop touch screen that is visible to customers, and AddOnAuto, which brings a visual touch to accessorizing by allowing consumers to configure a vehicle on a big screen.

The store's transformation made its way to the phone systems, too. Its antiquated phones were replaced over the summer as the dealership moved to the Reynolds Integrated Telephone System.

The new phone setup, which communicates with the DMS, brings up customers' information and transaction history at the store when they call, adding a layer of personalization to interactions. The system also has a mobile app, which required a learning curve for some longtime salespeople who had to convert from outdated flip phones to smart devices.

With so many different pieces being installed, the training sessions turned into melting pots where staffers from all areas of the dealership came together.

The parts people attended sales training, while sales staffers drop-ped in on parts tutorials. Meanwhile, training for the ReyPAY accounting solution called for the presence of the general manager, service manager, salespeople and F&I staff.

The store says it's getting ready to do a deep dive to figure out how to make all of the new tools work in tandem.

"It forced all the departments to work together. They're [normally] all separate and have their own agendas," Timothy Roussell, Bryan Honda's general manager, said of the Reynolds tech overhaul.

"When you have a project this big, it forced those agendas to cross over in every department every single day. It forced some cohesiveness. It forced a lot of teamwork."

■ Where did those documents print? At the other store

When a new DMS is being installed, wires can get crossed.

St. Charles Toyota in Illinois, a user of CDK's system, had a sister store in Crystal Lake that converted to CDK from Reynolds around five years ago. But somewhere during that process, the printing systems for the stores got flipped.

When St. Charles Toyota Office Manager Lesli Reynolds tried to print repair orders from the DMS at her store, the documents would sometimes end up at the Crystal Lake dealership -- which happened to be an hour away. She'd hear from her Crystal Lake colleagues soon after: "You guys missing some stuff? It's down here."

It was one of the more perplexing tech issues that Reynolds has faced in her 45 years in the car business, and she's pretty much seen it all.

She's been on CDK -- though she still mistakenly calls it ADP from time to time -- and Reynolds at the five stores she's worked with. She felt the Crystal Lake transition to CDK happened too quickly.

"I knew what they were telling me was not going to work," Reynolds recalled.

"It was a mess. They had opening day, and I was there at that store for about three days. They didn't have printers hooked up. They didn't have things working properly. We would've waited the other month or two until [CDK] got it right."

Reynolds says learning a new DMS is comparable to forcing a right-handed person to suddenly write with their left while maintaining their penmanship. She said staffers can feel helpless when their systems aren't running smoothly after an installation.

Reynolds feels the industry is moving away from face-to-face interactions in favor of online tutorials.

She said online training is no substitute for having someone take the time to sit down and walk you through a system.

"You have to demand that you have trainers on the premises, sitting with you. How do I do it in your system? I used to go here, now where do I go?" Reynolds said. "Just trial and error and [practicing] with you. If you don't have that, you're screwed."