DMS providers turn to service in the 'cloud'

In less than two years, hundreds of dealers have discovered the joy of cloud computing: a dealer management system that accesses data over the Internet from a remote server.

Indeed, cloud computing has transferred the burden of server updates from the retailers to the providers. The time and energy saved is perhaps comparable to 25 years ago when dealers switched from microfiche to electronic parts catalogs.

ADP Lightspeed launched its Hosted Solution in the fall of 2010. Already subscribing to it are about 600 of the firm’s 2,600 powersports dealers, up from about 240 last summer.

“Virtually every new dealer that we sign up now is going with the Hosted Solution,” says Gregory Smith, ADP Lightspeed’s vice president and general manager. “Any time now that dealers have an issue with their server or are contemplating making any kind of change, they’re talking to us about hosting.”

What do the other software firms think? Dealernews spoke with a few about not only cloud computing, but also integrated CRM systems, mobile technology, and the prospect of OEMs and dealers sharing data more freely.

Two DMS providers started offering cloud-based systems months before ADP Lightspeed. One is NizeX (formerly SofTek Software), which recently announced several enhancements to its Lizzy system.

The other early-entrant is Ziios, a system developed by Curtis Conner, a former Microsoft executive who once owned two dealerships. The fledgling Ziios got a big boost of credibility in the summer of 2010 when Dominion Enterprises added it to its stable of major brands: Cycle Trader, PowerSports Network and Traffic Log Pro. Dominion claims that more than 150 dealers now use the system.

Ziios and PSN recently announced the industry’s first two-way sharing of data in real time between a DMS and a dealer website. Ziios is in the process of integrating with all the Dominion properties.

Not everyone believes that dealers should ditch their servers just yet. C-Systems — the second-largest DMS provider, with 400 powersports dealers and 1,600 dealers in other industries — doesn’t offer a cloud-based system. According to marketing director Joe Miller, most dealers polled by the firm “do not want to entrust their valuable data to a third party.”

Miller adds that “Web-based or cloud models really only make sense when the user has minimal usage or demands. All but the smallest dealers soon find they overwhelm the resources of Web-based systems.”

Even so, he concedes a hosted solution “may be a viable option for even us in the future.” He already recommends that dealers use a new feature that automatically backs up the firm’s Infinity DMS about every 15 minutes using a remote server.

When NextStep Computer & Software polled its dealers on the possibility of a cloud-based version, nobody liked the idea. “If the users tell us they’re not going to use that, why should we pursue it?” NextStep’s Jay Hubelbank says.

Adam Systems, on the other hand, is beta-testing a cloud application for its Ability software.

When Conner first began marketing Ziios in early 2010, he emphasized not only cloud computing, but the daily digitalization of OEM data such as incentives, rebates, holdbacks, etc., along with standardized vehicle specs. The company even uploads state regulations and taxes.

Ziios enters most of this data manually, but Conner is optimistic that the OEMs will begin feeding more information to software makers. “We are currently working with OEMs to integrate with their portals to make it more efficient for dealers to order and track parts and inventory, as well as manage warranties, incentives and other aspects of the OEM/dealership relationship,” Conner says. “The next big thing is to make the data available in real time.”

In response to the Great Recession, most manufacturers began allowing dealers to order vehicles more frequently. That meant more forecasting, which in turn meant that the manufacturers needed to collect retail sales data more extensively, more often.

“Our OEM business has really grown,” says Smith of ADP Lightspeed. “Virtually every powersports OEM is now subscribing to some kind of data service from us. The most popular is our Major Unit Report.”

Smith says the data sharing is mostly one-way, from dealers to OEMs. But greater cooperation may be in the offing. “There are a lot of opportunities for deeper integrations for simple things like the distribution of repair bulletins, service campaigns, and things like that,” he says.

And remember the Motorcycle Industry Council’s PSP Program? It created data standards to allow everybody’s computers to communicate together. The program was successful mainly in other industries, but there’s still hope for powersports. Miller of c-Systems says his firm continues to use the standard for purchase order transmissions.

Bruce Weaver of Adam Systems, whose 1,000 dealers are mostly automotive, says that the auto industry’s own data standard, STAR, also took several years to implement. “Based on what we’re hearing, there are going to be more requirements from the powersports OEMs for data,” he says. “I’m guessing that will track similarly to what the automotive OEMs require: warranty data, registration data, parts orders, parts returns, that type of thing.”

Of course, the OEMs aren’t the only ones with a renewed interest in data. Dealers themselves are taking a closer look at their operations and customers. And this has led to growing interest in another electronic product: customer relationship management (CRM) systems.

In April 2011, ADP Lightspeed purchased one of the industry’s most popular CRM providers with which it had already integrated: V-SEPT. The result was Lightspeed Customer Experience Management, now being used by about 450 dealers who can access the system via both their computers and mobile devices.

Lightspeed CEM is a standalone product, but much of its value derives from its integration with the DMS. One of the latest upgrades is Omni, which allows dealers with multiple locations to collect customer databases into one location for tracking leads and marketing.

Miller says c-Systems continues to improve not only its CRM system, but also Customer Connect, a feature that allows customers — through a button on the dealer’s website — to log on directly to the DMS to view their order and service histories, and even to shop. C-Systems also is planning to introduce a browser-dependent mobile solution later this year in which dealers can access some DMS functions via tablets and smartphones.

As mentioned, Ziios is integrating with another popular CRM system: sister property Traffic Log Pro.

In the years ahead, expect more software improvements connecting dealers and customers, including the likely “automation between the DMS and various social media for purposes of advertising specials or posting coupons,” predicts Miller.

But just because software firms add features and reporting capabilities doesn’t mean dealers will use them. A depressing truism remains: According to the providers, dealers typically use less than half of a system’s features and shortcuts. Which is why education is another big trend in the market. C-Systems is busy adding how-to videos to complement the detailed descriptions within Infinity’s help function.

ADP Lightspeed will be coming out this fall with what the company says is a greatly improved help function called Service Connect (see sidebar). The firm also wants to help dealers make better use of its Databack product in which about 1,300 share their data for aggregate reports. About 550 Databack subscribers receive the departmentalized benchmarks on a regular basis. At press time, ADP Lightspeed was looking to hire a Databack consultant to teach dealers how to use the data.

“Our goal with Databack is not just to present a bunch of facts,” says Smith, “but to show how dealers can use the data to drive their businesses to improve.”

Two major ADP Lightspeed upgrades reportedly will be available in October:

Full Customer View: Today when Lightspeed users want to look up a customer’s information, they must go to each individual module for sales, service, etc. With Full Customer View, users will be able to see on one screen all of a customer’s interactions with the dealership.

Service Connect: Lightspeed’s new help function will be context-based, meaning that when users click “help” the system will sense what the user is trying to do and automatically present the relevant tutorials and FAQs. If users are still confused, they can click a button to begin a live chat session with a Lightspeed consultant who knows where the users are in the system. If that still doesn’t do the trick, users can click to make a phone call.

Already available for Lightspeed users are the new gift cards and easy printing services (see main story for major new services).

Gift cards: These are now offered through ADP Lightspeed’s integration with its credit card processor. ADP Lightspeed also added full encryption for data traveling from the swiping machine to the processor.

Easier printing: The firm has completely revamped how it handles printing, making it easier for dealers to install their own printers.

This story originally appeared in the Dealernews July 2012 issue.