Over the years we have worked with numerous auto dealerships, and many of them have grown through the acquisition of other dealerships across the United States. Although a dealership’s IT infrastructure is probably not a deal-breaker for an acquisition, it can be costly if the prior owner neglected their IT for a long period, driving up your post-acquisitions costs.
Changing over a dealership’s IT after an acquisition usually takes 3-8 days on-site to set up everything. The best way to reduce this time and associated cost is through proper planning.
The costliest thing an auto dealership can do is to neglect to account for IT and to wait until the day of the switch over to take care of it. Reacting after the fact means scrambling to see what equipment is usable, working to have multiple providers (internet, phone, DMS, etc.) switch over, and migrating data. Usually, a reactive switch over can cause a week or more of turmoil including lost sales and challenges with service opportunities.
Before our clients acquire a dealership, we have them request a list of technology assets on-site, but in most cases. The dealership does not have this list and doesn’t want to pay to generate the list. We generally travel to visit the dealership being acquired and review their IT infrastructure so we can proactively prepare and plan for a smooth transition that typically happens in just one night.
A Dealership Acquisition IT Transition Plan Includes:
- Reviewing technology assets and evaluating what to reuse and what to replace
- Coordinating with key vendors to switch over the internet, phones, and other technology
- Working with the current dealership’s DMS provider [learn more about Dealer Management Software] and our client’s DMS company to migrate data
- Scheduling integrations and equipment installs backdating from the switch over date
A good IT firm can save auto dealerships a lot of time and money during a transition by having the right processes in place and by preparing the equipment in their office and shipping it to the dealership.
9 Preventable IT Problems that Drive Up the Cost of an Auto Acquisition
- Ancient Servers – Most auto dealerships use cutting-edge technology for their DMS, and old servers can prevent a smooth install and not run the DMS well, if at all. Even after the switch over, old servers will continue to give you problems, cause work delays, and cost you more money in the long run.
- Disorganized Network Closet – When the network closet looks like a rats nest and isn’t labeled well, everything takes longer to set up and fix. A good IT firm will disassemble all the network cables, reorganize them, and document the network map for a smooth transition and to make future upgrades and troubleshooting issues more efficient.
- Old Workstations – It can take 3-5 hours to fix and configure an old computer compared to taking just 15 minutes to install a new one, which usually validates the ROI of purchasing new workstations. Also, with old machines, you run the risk of it having viruses that can infect your entire company network.
- Poor Wireless Infrastructure – Most auto groups use a cloud-based DMS and need to access it wirelessly across the entire dealership (sales, service, parts, accounting), but the dealerships they acquire rarely have a good wireless infrastructure.
- Lack Redundancies – Since most companies looking to be acquired cut costs and do not proactively maintain anything, they have multiple points of failure. A good IT firm will build in redundancies like backup internet and a backup power supply for the server and firewall to ensure your dealership can maintain day-to-day operations with no interruptions.
- Migrating Data from Workstations – If the acquired dealership does not use a DMS, it can take days to pull the data from each workstation manually and then integrate it with your DMS.
- Migrating Data from Another DMS – Even when a dealership uses a DMS, it can take a while to migrate data from one account to the other. Most operators do not realize the time it takes even if the acquired dealership uses the same DMS company.
- Printer Configurations – In the auto industry, you need to print many documents so printers must be configured correctly and well maintained. The last thing you want is to stall your F&I department because they cannot print or for a printer to affect your service department.
- Confusion Over Email Addresses – With most acquisitions, it is clear that the new owner acquires all of the vehicles on the lots, parts in the warehouse, employees, hardware, and even customer lists. One thing most companies forget to negotiate is the employee and company email addresses like sales@ and service@. This confusion can be a huge headache the day of the transition, yet it is preventable.
Our biggest suggestion is to look at the ROI both for the immediate transition and for the long-term operations of the business. We mentioned saving time to replace a workstation compared to the time to update and configure it. You also save replacing hardware because you drastically reduce the risk of a virus hitting your network and from not having the right security tools in place (firewalls, web & email filtering, email encryption). You also reduce future problems by replacing aging hardware before it breaks down or reduces efficiency (known as Life Cycle Management). This methodology is similar to a company replacing all fleet vehicles proactively at 100,000 miles before incurring unexpected outages and costs past regular maintenance.
A good IT firm can guide you through the process of the transition and work with you to evaluate both the short-term and long-term ROI of your IT infrastructure to get the biggest bang for your buck.