We’ve worked with dozens of auto dealerships to convert them to a new DMS (Dealer Management Software). Regardless if they’re switching to CDK (formerly ADP), Reynolds & Reynolds, Autosoft, or another DMS, there are costs many dealerships do not think about until after they’ve made the conversion.
As we’ve written before, you have numerous positives to using a Dealer Management Software and that ROI is usually quite apparent before starting. To know the big picture of what you’re getting yourself into, we wanted to add some transparency to the hidden costs of switching DMS.
- Research & Evaluation – Determining what DMS to select is the biggest hurdle for executives because they do not evaluate software often, or recently, so everything is new. It can be difficult to compare apples-to-apples because the features vary and there is no single DMS we can recommend across the board, it depends on your sales and services volumes, number of dealerships, needs, and infrastructure.
- IT Infrastructure – Whether you’re moving to a hosted cloud solution or storing the data locally on your server, most likely you need to upgrade your server, internet connection, or both. If you don’t, the software may have key features that you cannot use, it will not run smoothly, or it may not be supported by the DMS company.
When you switch your DMS, it is a good time to evaluate your IT infrastructure including your switch, router, VPN (Virtual Private Network), and more. You should also review your remote access considerations for employees and management because many functions can be done remotely on a mobile device.
- Wireless Infrastructure – Many dealerships switch to a new DMS to create a mobile environment and utilize smartphones and tablets to access their data on the fly. You can now pull pricing from the lot, place service requests next to the vehicle, and track the mechanic’s progress and order parts from the service bay. Because of these mobile features, most dealerships need to increase their wireless infrastructure by adding access points across the property.
- Installation & Configuration – To install a DMS, an IT team needs to touch every workstation and company mobile device to load the software and to configure it. Even if the data is stored in the cloud, workstations need to be configured for functions like printing. Upgrading your IT infrastructure can run a small dealership $5,000 and $100,000 for large multi-location corporations for the labor.
- Deploying the DMS – You will have soft costs associated with deploying your new DMS including the time to train your employees on how to use it. You should not have any downtime in the conversion because most IT support teams will make the switchover at night so it doesn’t affect your team during operating hours. However, your team needs to be ready to use it the next morning or it will slow operations when customers are present.
When deploying new software from one of the major players, a representative from that company is usually on-site the first day to ensure a smoother transition. (Most systems are fairly intuitive and easy to utilize after a walkthrough, but lesser-known systems from smaller companies may require a larger learning curve.) - Continued Training – Many dealerships implement a DMS in a “crawl, walk, run” methodology where they train and enable basic features and then expand to more robust functionalities over time. Without continued training and usage, many users forget what a DMS can do and some of the features you purchased can go unused.
Keep in mind that it takes time to get the value from the reporting and other features. A DMS is a great investment, but you do not want to underutilize its capabilities.
It is key to work with an IT team that has worked with DMS companies and deployed at least once before, otherwise, these hidden costs will skyrocket because you’re training an IT team unfamiliar with DMS on your dime. We’ve done so many DMS conversions, we’ve developed our own processes and set of tools to back deployment faster and easier. Our streamlined approach is mostly done behind the scenes, remotely, without impacting the end-users so they do not lose any productivity.
