Business software in the Internet age

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LightspeedNXT users will have the choice this fall to ditch their servers. The software maker plans to sell an NXT system that runs on individual computers and uses a remote server hosted by ADP.

Already on the market are Web-based systems whose makers also host communal servers. Expect other big software changes in the next five years as dealers demand a seamless integration between their Web stores and physical stores — and demand seamless customer follow-up via e-mail, texting and social media.

Also driving change? People’s expectation that information be readily available on the Internet. Some dealer systems now allow customers to tap into them to view order history and other info. C-Systems even lets people check stocking levels and submit orders.

Here’s a quick look at the software market and these changes, some of which are not universally praised. Not everyone, for example, thinks Web-based systems are viable. You’ll also meet a former Microsoft executive who’s created an online DMS that’s updated daily with the information metric OEMs send to dealers, often via FAX. Who knows? Perhaps as online systems evolve, suppliers and dealers will begin to exchange digital data more freely.

Market Overview

As dealers adapt to a smaller market with fewer employees, many are learning more about their software. “We’re starting to see the dealers using the systems more,” confirms Laurn Rice, vice president of ADP Lightspeed. “They want more training. They need to multitask and understand what’s going on in their store in more detail.”

Dealers who aren’t learning may be wasting man-hours. “Some dealers that have been with us for five years don’t know about all of our new functions because they’re not reading the release notes and looking online,” Rice says, adding that few NXT users, for example, take advantage of a relatively new e-mail campaign feature. “It saves a lot of time,” he says.

As part of its Databack service, ADP Lightspeed has long collected data from a sampling of its dealers (nearly 700 now participate) with which it creates geographical averages. Starting last fall, dealers could choose to receive these benchmarks within their systems in real time. Previously, they could only get monthly reports.

“OEMs also are starting to request more information about their dealers and what’s happening in the field,” Rice says. “I think you’re going to see the OEMs starting to want more information from their dealer base so they can make better decisions about what to do with their inventory and production.”

ADP Lightspeed serves nearly 3,000 stores and is the market leader among franchised dealers. But several other DMS makers also serve these dealers as well as the vast majority of repair shops and aftermarket stores having industry-specific software. A couple of these providers told Dealernews that since the downturn, they’ve been able to convert a good number of Lightspeed users to their less-expensive systems. Rice, on the other hand, says that for the past 15 years, no more than 10 dealers have defected during any given year.

Of course, some dealers don’t defect. They go broke. “Afterward, the former parts guy and service guy open shops. Lightspeed loses a customer, and Commander gains two,” explains Steve Barker, national sales manager of MIC Systems, maker of the Commander and Brainstorm systems.

At Dealer Expo, two business software companies from the marine and RV industries were testing the waters: BiT Dealership Software Inc. and BreezeGo. (For more on them and all the software makers at the show, go to www.dealernews.com/2010BusinessServices.) Given the growing competition and a down economy, now is a great time to negotiate terms with your provider.

Rice says a lot of dealers also are opting for fewer users and fewer price books, even while ADP Lightspeed continues to sign up new customers at about the same rate it loses them due to closures.

Many software makers still support an old version of their software that doesn’t run on Windows. About 15 percent of Lightspeed dealers, Rice says, still use the Unix version. Persuading these dealers to upgrade is a favorite pastime among software sales reps. Which may partly explain Lightspeed’s plan to offer an NXT version not requiring an in-house server. Rice says ongoing fees will be about the same, but the upstart expense will be much lower. Not only that, but there are inherent benefits to an outsourced server, the same benefits being touted by a new crop of Web-based system vendors.

Web-Based Systems: More Than a Buzzword?

In a way, ADP Lightspeed and other software makers already offer online systems. Some dealers, especially those with multiple stores, have accessed their applications and data remotely over a network. That is to say, in-store monitors display the DMS while a server somewhere else runs it. Microsoft’s version of such a system is called Terminal Services.

Jim Phelan is founder of c-Systems, which serves 1,500 dealers (about 400 in powersports), not including the stores inherited after its recent purchase of DMS maker Softpower. C-Systems provides Terminal Services to a scant percentage of its dealer base. Phelan admits that in the past the service has had limitations related mostly to hardware connectivity. “I think that’s still a little problematic,” he says, “but those problems are going away. Microsoft and every one else is working them out.”

Last summer, 25-year-old software maker Comptron began offering an inexpensive DMS that uses remote access, though in this case the system is Unix-based.

As mentioned, ADP Lightspeed is taking a different approach. NXT will be installed on each individual computer, accessing the remote server only for data.

Nizex (pronounced NIZE-x) Inc. is a relatively new company marketing a fully Web-based DMS and CRM system called Lizzy. The program runs entirely in the browser. Using technologies commonly referred to as “Ajax,” the company developed its system so that each browser page is interactive, meaning that portions of the page can function without the entire page being refreshed. Invoice totals, for example, can be recalculated with less data exchange.

The same people behind Nizex run SofTek Software Intl., which has promoted a system called The Business Assistant for many years. They will phase out both the older system and company as customers convert to Lizzy. Another fully Web-based system, MomentumDMS, takes yet another approach. It uses Silverlight (Microsoft’s version of Flash) to install the software engine on to each PC’s local memory before every session. This way, the PC is doing most of the work, only accessing the remote server for data. Former Microsoft executive Curtis Conner developed the system while owning two multiline dealerships a few years ago. He now is full-time owner of Ziios (pronounced zee-ose) Inc.

MomentumDMS is divided into three areas for vehicle sales, P&A and service. Accounting is handled through integration with one of three major accounting systems, including QuickBooks. Ziios uploads to its system not only the daily OEM communications, like retail rebates, but also standardized vehicle information and even government regulations for each state (California’s tire fees, for example). MomentumDMS also forces employees to follow best practices. The system, for instance, can tell employees whether an out-the-door price violates preset rules, taking into account taxes, fees, flooring costs and incentives. To learn more about MomentumDMS, go to www.dealernews.com/Ziios. The system has already received one noteworthy recognition: ADP Lightspeed’s Laurn Rice. “He’s got a great little product,” he says, “and I’m glad to see the competition. I’ve told him that.”

All the online system makers stress the benefits of an outsourced server: one less hardware cost, and dealers no longer have to update their systems, secure them, or back them up, all things dealers typically don’t do well anyway, Rice says. All the software makers ensure us their servers are housed in accredited facilities with impeccable policies.

A few other software providers are skeptical. MIC Systems’ Barker says the Internet is still too slow for online systems, though he said even his company may consider the platform in a year or two when the Internet is better. Ideal Computer Systems’ Jeff Haefner says reliability is a greater concern. If the Internet goes down, so does the system. The companies offering online systems say their dealers must invest in an excellent Internet connection with a static IP. They also say that multiple backups include a dial-up connection. Nizex and Ziios even claim that because their systems require the passing of so little data, even a cellular modem will keep them running.

Even so, Haefner reminds dealers that the system itself trumps its platform. “I see so many people jumping on the bandwagon about some new technology, and they’re throwing out features that are proven to make them money,” he says. “Forget about the fancy technology and take a look at the features and return on investment.”

Ironically, one of Ideal’s most exciting new features — besides a new F&I module and experts who teach dealers how to use it — is something the company is referring to as a mobile dashboard. Dealers can log on to their systems remotely using a smart phone or other device to check their “key performance indicators.” Imagine a dealer vacationing in the Caribbean being able to put his or her mind at ease, says Haefner, who adds that remote access makes perfect sense for such a nonessential feature.

Nonessential but cool. At least two other DMS makers are taking such connectivity a step further. They allow customers to log on to their systems.

Inviting Customers In

Big websites like Amazon.com have spoiled people. Whenever they want to view their order history or shipping status, they just log on. About three years ago, c-Systems introduced such a system in the form of Customer Connect. “I’d much rather go online and check on something than have to get on the phone and talk to someone,” says c-Systems’ Phelan. “We’re trying to stress that in our development: making it easier for customers to do business with you and less employee-intensive.”

Dealers place a link on their home pages going to a site run by c-Systems, where customers log on to view their recent purchases and invoices, or check on the status of a unit in for repair and the estimated time of completion. They also can browse serialized inventory and place orders. If they’ve ordered parts, they can get an estimated time of arrival — even if the supplier is drop-shipping. C-Systems plans to eventually offer UPS and FedEx tracking numbers.

The e-commerce portion of Customer Connect is relatively new. “When a customer queries a part, we look in a dealer’s inventory first,” Phelan says. “If it’s not there, we look in the manufacturer’s price book and represent it as a number that we can order for them.”

Like most management systems (see sidebar), c-Systems also works with dealers to provide two-way integration with their Web stores.

Nizex’s online system also allows customers to check service tickets and view purchase history. In addition, they can open up tickets that prompt someone to give them a call.

So systems like Customer Connect are yet another example of how dealers are becoming digitally connected with customers. Expect a similar evolution among dealers and suppliers. As more data opens up via the Internet, manufacturers and dealers may finally take a cue from the auto industry. Freely sharing data — hopefully standardized data — could give everyone a clearer view of the market.

This story originally appeared in the Dealernews May 2010 issue.