6 Things to Consider When Buying a DMS
Investing in a dealer management system (DMS) can be both an exciting and stressful time for a dealership. People generally envision a long-term benefit, but once they get into evaluating, buying and implementing a DMS, they can lose sight of the goal. After installing thousands of DMS’s, we’ve found six things to consider to make the process easier:
1. Have a clear vision of problems to solve
Before you begin, consider which problems you hope to solve by implementing a DMS. Do you have a murky understanding of your financial health? Is it unclear which departments are producing positive results and which ones are costing you money? Does your current system cause more work than it saves? Answer these questions with specifics. How is your current system causing you excess work? Where are your biggest challenges? What would solving them mean to you and your team?
2. Empower the team and get buy-in
Employees often fight change. It’s a fact. While a stubborn employee could negatively impact the roll out of a new DMS, there are ways to stack the odds in your favor. First, as appropriate, involve key employees in evaluating a potential DMS. This allows them to get a vision of how their daily routines could improve. It also lets them voice their concerns. Second, give them ownership in the project. Some employees fight change because they feel like changes are outside of their control, but if you empower key employees during the implementation process, they will recognize their importance in the transition and will work to minimize disruptions. Third, make it fun. Run contests like “the first person to complete online training gets a free lunch.” Change is stressful, but a little fun reminds everyone that there are positives to change.
3. A successful implementation involves partnering
You know the unique needs of your dealership and team members better than anyone. Because of this, the ultimate success of DMS implementation rests on the shoulders of your business and employees. However, your DMS implementation team has helped many other dealerships through this process. Work to partner your expertise of your specific business needs with their general industry knowledge.
4. Training is crucial
Over and over again, training proves to be the most critical step of implementation. You’re an expert at your business, but it took training and experience to get there. Would you let a new tech work on a complex engine if they said “I’ll bang on it a few times and figure it out along the way?” No. So why would a complex DMS be any different? Prioritize training for yourself and your employees to ensure a successful transition.
5. Understand the Total Cost of Ownership
When considering a DMS, it’s easy to look at just the pricing on a proposal. But buying a system solely on price can cause a lot of additional unplanned expenses and frustration to the store and employees. Hidden costs can include inaccurate data, stability issues, unproductive employee time and, potentially, another DMS change after a short period of time. While these costs can be imprecise when considered in advance, they will eventually be real expenses that contribute to the total cost of ownership.
6. Long-term ROI
Price can be the short-term focus. But what is the long-term return on investment that a dealer management system can offer your store? Overall, your DMS should save you time and money while improving productivity and profits. The software system should free up time so that your employees can focus on profitable tasks. You should have tools that will help grow unit sales, increase F&I penetration rates, and promote better closing ratios or margins. Once you have a vision on how your monthly numbers will improve, forecast that out 5, 10 or 15 years. Then you’ll see the true impact of a quality dealer management system. Switching DMS’s can seem like a daunting task, but with the right forethought and a little help, your new system can be paying dividends for years to come.