A Dealership Management System is the core software application for nearly every auto dealership, and it integrates each department of the dealership from sales and F&I to accounting and service. Typically, a DMS stores customer information including transactional data, accounting functionality, service history and job tickets, vehicle inventory, and more. Enterprise-level DMS software integrates with third-party software, such as listing websites, providing a single dashboard for General Managers and executives.
Considering to use a Dealer Management System is a relatively easy decision, yet selecting which DMS to use requires much thought and analysis. After assisting clients with dozens of DMS analyses and transitions, we’ve developed this list of considerations to ensure you find the right fit and to prevent you from having to replace it in the near future, which is costly.
9 Things to Consider When Selecting a DMS (Dealership Management System):
- Inventory Your Needs & Wants First – Before starting your research and considering options, take an inventory of what your dealership needs and wants from a DMS. Starting with this step allows you to make a more unbiased decision on which systems to short list and research further.
- Get Representation – As you inventory what features you need, make sure you’re talking to each department and create a small committee of people that represent each department. Selecting a DMS without the input of your Service Manager can be a costly mistake. For larger dealership groups, interview key people and take their needs into account to keep your selection committee small enough to make a decision.
- Determine Features Before Researching – Once the players are on board and you’ve done an inventory of needs, prioritize the features and integrations you need and make a separate list of what features you’d like to have included. Separating features you need and want will prevent your dealership from selecting the wrong DMS or paying for features that will likely never be fully utilized.
- Discuss Data Storage – Understand and discuss the pros and cons between web-based systems and software that needs to be installed onto a server. In that discussion, determine where your data is backed up in case of equipment failure or natural disasters and who owns the data (you or the DMS).
- Integrations – Typically, a web-based DMS will integrate better with other web-based applications and vice versa. If you need your DMS to “talk” to other applications, make sure the systems you’re researching integrate with your current vendors and ask about support.
- Reviews & Opinions – Research the web (review websites like Capterra are great) and ask your colleagues at other auto dealerships what DMS they use and their thoughts on it. Dig a bit by asking what they used previously and why they made the switch. You can probably learn a lot just by asking other employees about their experiences working with different DMS systems when employed by other auto dealerships.
- Understand the Transition – Change takes time, and transitioning to a new DMS is no different. You need to consider the time impact and cost of a transition. In some cases, changing your DMS sounds good, but the investment required to change isn’t worth the effort.
- Weigh the ROI – Ultimately your decision needs to come down to the ROI (Return On Investment) whether you’re just starting out with a DMS or transitioning to a new DMS. [Learn more about the Hidden Costs when Switching DMS.]
- Training – Once you select your DMS, you need to put forth the effort to train your team. Otherwise, your investment will be all for naught.
Selecting a Dealer Management System is one of the biggest decisions for an auto dealership, so do not take it lightly. I suggest working with a good IT firm that is familiar with different systems and one that can help you select and transition to a new DMS.