Ziios: Can a former Microsoft exec revolutionize the DMS market?

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The following is a companion article to a broader look at the DMS market in the May issue.

CURTIS CONNER — a 50-year-old former Microsoft executive who recently owned two multiline dealerships — has created a dealer management system with which you don’t maintain a server or installed software. You don’t have to update or back up anything. Conner’s company does it all for you via a remote server and an entirely Web-based system using the latest technology.

And Conner says that’s just half of what makes his system, MomentumDMS, great. The other half is all the data it provides. His company, California-based Ziios (pronounced zee-ose), has taken on the huge task of digitalizing, on a daily basis, all the information the metric OEMs send their dealers: incentives, rebates, holdbacks, etc. The company also provides standardized descriptions of recent vehicles. So with a few clicks of a mouse, salespeople can see all the relevant data for each showroom unit, along with real profitability.

In addition, MomentumDMS comes populated with state regulations and taxes, and all the documentation needed to close deals. Employees can be taught proper in-store procedures, Conner says, through rules-based computing.

Sound exciting? We thought so. To learn more about the system and its maker, we spoke with both Conner and a dealer who’s beta-testing the system. A few other DMS providers told us they’re skeptical of the system, claiming the Internet is still too slow and unreliable for anything Web-based. But the vice president of the market leader, ADP Lightspeed, recognizes the value. “He’s got a great little product,” Laurn Rice says, “and I’m glad to see the competition.” This fall, ADP Lightspeed itself will offer an NXT system that runs on individual computers and uses a remote server.

DISCOVERING A NEED
Not many people think of a dealership as a way to retire. But that’s what Conner, a lifelong enthusiast, had in mind in 2004 when he partnered with a multiline dealer in the Sacramento area. He had been working for Microsoft for more than a decade as a telecommunications executive. Soon he quit his job, bought out his partner, even bought another dealership down the road.

Conner used LightspeedNXT to manage his stores (which he’s since sold to focus on Ziios). “The market-leading DMS in the industry was stuck in the early ’90s,” he recently stated in a press release. “It was as though the Internet had never been invented. It didn’t do the things I knew could be done from all my years at Microsoft that could really help my dealership. … I knew I could do better.”

Conner’s first try was traditional software using an in-house server. “A better mousetrap like everybody else had,” he says. He then created a system that ran entirely in an Internet browser, using a secured third-party server. He presented this system at Dealer Expo 2009. Soon after, though, he judged it as being too slow.

Today’s MomentumDMS is Conner’s third attempt. Launched at this year’s show, 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.

Conner claims the system is fast, and at least one dealer agrees. Lance Cornell is president of Experience Powersports in Moses lake, Wash. For the past few months, he has been beta-tesing MomentumDMS while concurrently running Lightspeed Unix. He says the initial software loading before each session takes less than a minute. Afterward, the system works “pretty rapidly.”

“I might examine it being a tiny bit slower,” says Cornell, comparing the system to Lightspeed. But the difference is not enough to be relevant during day-to-day operations. “In that respect, I don’t see where it’s all that different,” he says.

Cornell used the system at an off-site event with laptop computers and a cellular modem. Even then, it “was still very quick,” he says. He loved having remote access to his entire DMS. Employees were able to conduct business as usual. For example, they could look up the prices of discounted items that had lost their labels.

A cellular modem can also serve as backup in case a store’s regular Internet connection fails. A dial-up modem can act likewise. But any dealer considering MomentumDMS, Conner says, will first want to invest in a fast, reliable connection with a static IP address.

HOURS AND HOURS OF LABOR — SAVED
MomentumDMS is divided into three areas: vehicle sales, P&A and service. For accounting, dealers choose an integration with one of three major accounting systems: QuickBooks, Intacct or NetSuite. “It’s enough work just trying to do a point-of-sale dealer management system,” Conner says. “There’s no way in the world that I can be the best in the world at accounting. That doesn’t mean we’re not doing accounting. We still write records, and we fully synch back and forth.”

Experience Powersports uses QuickBooks instead of Lightspeed’s accounting module, with employees rekeying data. So Cornell loves the full integration. He also loves that MomentumDMS is automatically updated and backed up. With his current system, employees spend “hours and hours and hours” with each new round of price books.

Cornell also updates his system every night. “But we have technical problems where the tape says it can’t hold data anymore,” he says. “So we’ll put a tape in at night and hit the key. The next day, we come in and it tells us it didn’t process. This happens about once every 10 days.”

Year-end reports are a similar nightmare. “I hate being here on Dec. 31 running year-end every year,” Cornell says. “I can’t even go anywhere. I see Ziios as a prime example of moving in a direction where it should always be real-time. We shouldn’t have to mess around with cleaning this file or that file.”

He references a famous scene from the movie Office Space. “I’m sure there’s lots of folks like me that would love to come in one day and just beat a piece of equipment with a hammer because they’re just so tired of having to deal with it every day.” (Continued on page 2.)

Automatic updates and backups are natural benefits of MomentumDMS’ being Web-based. But Ziios has gone a step further by adding daily OEM data such as incentives and rebates, tied to precise unit descriptions including colors and trim levels, also entered by Ziios. The company does this cost-effectively through a Thailand-based company also owned by Conner. In fact, he is internationalizing his system from the get-go. “There’s more motorcycle dealerships in Thailand than there are in all of the United States,” he notes.

Ziios receives its data from OEMs and dealers. It tracks all the major suppliers except for Harley-Davidson. Conner believes that the free flow of standardized data, with MomentumDMS as the conduit, is in everyone’s best interest. “In the long haul,” he says, “Ziios will help not only the dealerships, but the OEM channel. Right now information is in silos, buried in the dealerships. Everything in this industry is based off of warranty registration and floor checks.”

Conner envisions OEMs monitoring the actual inventory on dealers’ shelves, allowing them to plan production or judge promotions. “They could have greater insight into the dealerships, and the dealerships could have greater insights into the OEMs,” he says.

Other DMS makers tell us that they’re intrigued by Ziios’ willingness to manipulate data, but that they would never try it themselves. They’d be afraid of making mistakes, they say. Conner responds by noting that dealers can always use the invoice to confirm rebates, holdbacks, etc., after a customer decides to buy.

Experience Powersports’ Cornell hasn’t ever noticed a mistake, and he says that it wouldn’t be a big deal if he did. “I don’t expect anybody to be a hundred percent,” he says. The benefits outweigh an occasional blunder, he says. Automatic access to info on each showroom unit is just too valuable. “I like that I can look at the thing and say, ‘OK, I have this much incentive, I have this much into it, this is when I got it. I know my aging on it. I know when programs are going to expire. Otherwise, I’m going from memory.”

As far as data integrity goes, Conner was more concerned about tax calculations. “That was my concern always,” he says. “But there are taxing authorities that have insurance already on them, so we bought the data from one of them.”

MomentumDMS also automates legal fees. California’s tire fees, for example. “Every time you sell a tire, you’ve got to put a tire fee on it,” Conner says. “That logic has to be put into some kid you’re paying minimum wage on the counter, who comes and goes. So in three months, when the Tire Fee Gods from California come, you get these huge fines. With Ziios, that’s just one less thing the owner has to deal with.”

Battery core charges and chemical fees are other examples. “These are things that the dealers are going to get hit more and more with,” Conner says.

For each vehicle sold, MomentumDMS prints out prepopulated state and local forms. Major-unit invoices have lines for P&A and service charges, so there’s only one invoice. The system also automates deal finalization. “It knows, for example, to deduct from the parts invoice the amount that’s going to be on the incentive for the major unit,” Conner says. “It knows how much to put into accounts receivable for HSBC automatically.”

Note that all Ziios’ preloaded data and automated processes are optional, and dealers can override them. Dealers can also set system-enforced rules governing major-unit profitability. They can set margin objective rules by brand, model and time frame. Salespeople instantly know when an out-the-door price (inclusive of taxes, fees, flooring costs and incentives) violates the rules. It’s just another way Ziios manages work flow, Conner says.

SO HOW MUCH DOES ALL THIS COST?
Ziios charges by user, by month, with no contract. Managerial user licenses cost more than regular ones. “In general,” Conner says, “our pricing is comparative to the main monthly maintenance, on average, of our competitors. The main competitors I look at are Lightspeed and c-Systems.”

Again, there are no upfront hardware or software fees. A sign-up charge varies from $500 to $5,000, depending on the type of conversion.

Conner compares Ziios to electricity: You pay for only what you use. “One of our users is a mom-and-pop. He sells parts and accessories, and he’s getting the system for about 200 bucks a month. He gets all the power as if he were a large dealer network. And if he grows by two people, he gets charged a little bit extra that month. The next month, he may get charged a little bit less.”

Speaking of dealer networks, Conner believes his system will appeal especially to dealers owning multiple stores. MomentumDMS can tie together all stores under one organization. So dealers can pick and choose which stores to include in a financial rollup report.

Customer contact information resides at the organizational level, so the info is entered only once and shared.

The system can link together similar models. Salespeople, for example, could click a button to see all full-sized sportbikes throughout the dealer network, making it easier for them to cross-sell or upsell.

To learn more about Ziios, click here to download a PDF of the brochure it was distributing at Indy. You can also visit www.ziios.com or call 877-944-6766.

Conner says no other dealer system reduces back-office labor as much as his. He remembers running his own dealerships, which brought in between $6 million and $8 million. “To support that level of sales,” he says, “I needed three people in the back office. That’s just ridiculous. The only reason I’m doing what I’m doing now is that I really felt bad for the dealers, and I figured I could make a difference.”