The dealership management system is the beating heart of every dealership's operation. But a heart that only allows data to flow through certain arteries can be costly and time-consuming for dealers hoping to streamline operations.
Challenges such as these mean a dealership's DMS can have a strong influence on which vendors, F&I and otherwise, the store works with.
It can take several years for a large DMS provider to develop certain capacities smaller companies can offer today, dealers say, prompting the rise in third-party companies offering solutions such as digital retailing and shopping tools, customer relationship management systems and fraud protection products.
According to Cox Automotive, dealerships use, on average, about seven systems to complete a sales transaction and 18 vendors to run the stores.
Some DMS companies require vendors to go through third-party certifications, which can result in vendors being blocked from integrating with a dealership's DMS. If DMS providers lock dealers into long-term agreements, restrict DMS data or fail to integrate with other companies at all, that can back dealers into a corner.
If vendors cannot integrate with the DMS, dealers often have no choice but to give up on business with them, according to F&I specialist Becky Chernek, president of Chernek Consulting in Atlanta.
"I don't think it's fair," Chernek said. It's the dealerships' data, "their customers, their information."
Many dealers would rather save money by investing in a DMS with added capacities. Brondes Ford Toledo, in Ohio, which sells 2,200 new and used vehicles per year, is switching to Dominion Vue from Dominion Access, largely because Vue incorporates tablets into the F&I process. Because the new system has increased functionality, the dealership will be able to trim four vendors, which will save it as much as $65,000 a year in vendor expense, said Drew Conkle, the store's general manager.
"If your DMS can provide those services, and they are robust enough, you don't need those vendors to provide it," he said. When the DMS company does not provide necessary services, dealers must be sure that it will integrate with other vendors that offer them.