CDK to help dealers with AI data

The automotive industry is generating huge amounts of data — from dealers, from automakers, from the vehicles themselves.

CDK Global Inc. executives say helping dealers and automakers make sense of it all will be a priority for the company, which is building out its data analytics capabilities.

The Hoffman Estates, Ill., dealership management system provider in January rolled out a new data platform it's calling Neuron, which will use artificial intelligence and machine learning to produce predictive data insights for dealers and automakers. Days after the Neuron launch, CDK acquired Square Root, an Austin, Texas, company that specializes in data insights for automotive field management, for an undisclosed price.

Square Root's technology will help analyze data coming from CDK's DMS platform, customer relationship management system and other software, CDK officials said.

CDK sees data as an integral part of its business going forward, an approach that also will guide the company as it updates software, develops new tools and increases use of its Fortellis open network development platform. CDK CEO Brian Krzanich said last month on the company's fiscal second-quarter earnings call that Fortellis can use data insights to help third-party software developers produce new applications for dealerships that can work whether they're using a CDK or third-party system.

Harnessing insights from the billions of data transactions that will flow through the Neuron platform will help dealers and automakers make better decisions about their businesses not only today but also as digital retailing advances and connected, electrified and autonomous vehicles are deployed, said Mahesh Shah, CDK's chief product and technology officer.

It also can allow them to provide a simplified experience, he said.

"Our dealers are very data-rich but information-poor," Shah told Automotive News.

"More and more, this industry is going towards the generation of data from cars, from the dealers. Consumers are generating it, and more and more third parties are interacting in that whole ecosystem.

"And this information highway has really been more like a bunch of dirt roads all over the place where these things haven't connected."

With a better view, Krzanich said, the data analysis gleaned through a platform such as Neuron could help turn individual data points into actionable items that can solve some of the auto industry's pain points.

For instance, he said, dealers could gain more ability to predict which customers are more likely to buy a vehicle or to identify the greatest probability for upsells.

"That's really helpful because that makes the dealer much more efficient, and it makes them be able to service their customer better," Krzanich said on the earnings call.

CDK's volumes of service records could inform dealers in the Northeast that many customers may want to change their brakes in the fall — even if it's not a scheduled service — to make sure their vehicles are ready for the first snow, Shah said.

Knowing those types of behavioral, demographic and geographic patterns would prepare a dealership to make sure that parts are stocked and even proactively notify service agents and customers about typical maintenance issues.

"It's generally not somebody's happiest day when they bring their car in to get fixed," said Scott Thompson, a CDK senior vice president in charge of the company's layered applications, including its customer relationship management system and digital retailing platform.

"But if we can marry all this stuff together, and when I bring it in, make sure the parts are there [and] the technicians are scheduled so they get it back at least that day, it's better than having it back the next day," Thompson said.

"And if leveraging all this technology, we can prevent them having to come back again for something that we can identify that needs to be done now, that's really a home run for both the customer and the dealership. Because they raised their service revenue, and the customer gets to avoid a second trip in."