Do you Really need a DMS?

When I speak to dealers, I often get asked why a dealership must have an expensive DMS like R+R or ADP.  I am quick to respond that are other lower cost options like DealerTrack, DPC, DealerStar or DDS.  But what a dealer really wants to know is, “I know other companies that run their businesses with Quickbook, SAP, or Microsft-GP; why can’t I use one of these to manage my dealership?”  The answer to this question is in the last words; “manage my dealership.”  There are hundreds of accounting packages available that can keep your books or even help you run your business, but a DMS – Dealership Management System does just that – it helps you manage your dealership.  How is a DMS different than a standard accounting package or ERP?  During the next few issues, I’ll discuss many of the items that set a DMS apart and how you can determine if these are features you must have.  I’ll also define what is part of a core DMS and what we consider as an Add-on item.  To explain this further, let’s start with Service Appointment Scheduling as an example.  I consider this item both a core DMS feature and an Add-on item.  Appointment Scheduling has two elements; the ability for the customer to schedule a service appointment online and then transmit that appointment to your personnel and your DMS.  This portion is an Add-on item because it does not “manage your dealership.”  It is similar to many portions of your CRM software that helps you make more money by selling more vehicles and increasing service and parts sales.  The other element of Appointment Scheduling shows you how many appointments you have tomorrow by each advisor and technician.  This does help you manage your business because if you don’t have enough service appointments to keep everyone busy tomorrow, then you can make management decisions like sending used vehicles through the shop for reconditioning, getting new vehicle PDIs completed, or calling customers and making appointments.  You might ask, “How many of these items are missing from a standard ERP program and which ones help me manage a dealership?”   If I had to guess, I’d say hundreds.  In fact, it is the amount of these items that separate the various DMS systems into Tier 1, Tier 2, and Tier 3.  Let’s start out with something simple but a huge difference between standard accounting and ERP software and a DMS; Schedules and Control numbers.  A DMS uses a complicated method of subsidiary ledgers called “schedules.”  Most standard accounting packages have just two types; accounts receivable (people who owe us money) and payable (people we owe.)  They might also have an inventory and fixed assets ledger.  Because most of the amounts owed and due involve around a car deal, repair order, or parts ticket these schedules must be “controlled” by various fields like RO#, Stock#, CustID, etc.  They must also have different behaviors like clearing when the balance is zero (detail forward,) or clearing when the reference matches (open item.)  The DMS system must know when to require a control number from the user or when to automatically get the control number based on setups.  You might think that a schedule is merely a complicated report of accounting detail, but one of the failed conversions of a standard ERP, Microsoft Dynamics, required that schedules could only run at night – the demand on the database was too great during the day to run these complicated reports.  This might not make a difference to you, but for another dealership that depends on “schedules on the fly” during the day – it would be a deal breaker in considering that DMS or trying to use a standard ERP.  For some dealers they need Add-on Appointment Scheduling because their tech savvy customers are demanding the ability to make online appointments.  For others, they might only need it to manage their business and want it as part of their core DMS to maximize shop productivity.

As I mentioned in the first part of this article, there are many DMS systems to select from and you might wonder if it is time for you to start saving money by moving down to a Tier 2 or Tier 3 system like DDS, DPC, or AutoSoft – or if you already tried that and are missing too many valuable DMS features; move back up to a Tier 1 system like ADP, R+R or DealerStar.  At the 18th Digital Dealer Conference in Tampa, April 21- 23, I’ll be giving a workshop called “Changing DMS Systems – Five Things to Consider before You Change Systems.”  Please attend my session and find out if your dealership should get a lower-priced DMS, return to a more traditional DMS like ADP or R+R, or consider a newer DMS that might have the features you need at a price that could save you money.

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