What to Look for When Choosing a New Dealer Management System: A DMS Checklist
Lisa Cho
| 13 January 2021

What to Look for When Choosing a New Dealer Management System: A DMS Checklist

Why not a DMS?
What is a Dealer Management System (or DMS), and what does it do for your business? Simply put, a DMS is the central hub of your dealership that integrates all the functional areas like Sales, Accounting, Service, and Inventory together in one system. The right DMS should provide insight into how your business is performing in real time, unlock efficiencies in your day-to-day processes, and turn data into profitable growth.

If you were to talk to the management at most independent or small automotive dealerships, a majority would tell you they know what a DMS is. Some may already have one in place. And even those who currently don’t have one can still understand the potential benefits a DMS could bring their dealership.

So, why don’t they have one? And, if they currently do have a DMS, how do they know they have the right one? What does it take to help dispel the age-old myths and ease the concerns about diving into the DMS pool?

Over the years, we’ve heard many reasons why independent and small dealers don’t have a DMS. Most of the time it comes down to these reasons:

  1. “We use a variety of off-the-shelf software products that accomplish what we need.”
  2. “Functionally, it does much more than we need. It’s too complex and hard to learn.”
  3. “We’re not comfortable with or ready for the technology needed.”
  4. “A DMS is for larger dealerships. They’re too expensive and hard to justify for a smaller dealership.”

So how do dealers without a DMS manage their business? One thing is for sure — they’re not operating as effectively as they could be.

Employees at independent and small auto dealerships are often required to wear many hats. Without a DMS, a dealership may opt to use a combination of off-the-shelf software solutions from multiple vendors. In this scenario the programs don’t always play well together, which creates problems. When the programs don’t integrate or talk to each other, it results in an inefficient workflow that makes it virtually impossible to get the reporting and data you need to run your business. Users are also forced to learn multiple software interfaces, and, in many cases, required to enter the same data in several locations. Not only does this create inaccurate data entry problems, it’s also an extremely inefficient process. When your employees have multiple responsibilities, every minute wasted is critical.

And let’s not forget, not only are you managing a staff and your business, you’re also managing relationships with multiple vendors. It can get cumbersome — especially if you have to call various support lines to get a fix that spans beyond one software program or workflow.

Choosing the right DMS
Selecting the right DMS for your dealership should be based on a variety of factors. It’s very important to approach this decision with an open mind. Talk to your peers to see what they’re doing and if they’re happy with their solution and vendor. Do your homework — don’t just settle for the first option that comes along at a price “you can’t beat.” And most importantly, clear your head of all the negative perceptions and misconceptions about owning a DMS. As you’ll find out, many of them just aren’t true.

DMS Checklist:

  1. An all-in-one solution with everything you need on one platform
    Look for a single solution that eliminates the headaches associated with using a collection of products from multiple vendors. Having a single solution makes it easier for employees to cross-train when needed. This is especially helpful for smaller dealerships where head count is at a premium. The biggest benefit of having an all-in-one solution is that it allows you to manage all functional areas of the business with one solution from Sales to Service and everything in between. This ensures that data will flow seamlessly from one functional area of the business to another, allowing for the accurate and timely reporting you need to make informed business decisions.
  2. A flexible solution that’s tailored to your business
    One of the biggest DMS misconceptions is that they’re only for the big dealers with multiple locations. The truth is, DMSs come in all shapes and sizes and there’s definitely one out there for you whether you have one location or 50. You may not need all of the bells and whistles that come with a system designed for larger dealerships with multiple locations, but a trustworthy supplier should be able to easily navigate you through the selection process and tailor a solution specific to your dealership’s needs. You should also be able to work with your DMS provider to scale your system as your business needs dictate.
  3. Intuitive workflows with a modern, consistent screen interface
    The primary advantage of having a DMS with intuitive workflows is that it’s much easier to learn and use. This allows employees to get up to speed faster and be more productive sooner. Having consistent screens throughout the system with the same tasks and buttons in the same location on every screen is one example of how an intuitive design can simplify the learning process.

    If a system is easier to learn, you can hire the best employees for the job and not be limited by their previous DMS experience. This is a real benefit when dealerships require employees to wear multiple hats and is especially important for an industry where turnover tends to be higher.
  4. Cloud-based solutions
    Working in the cloud is quickly becoming the norm. While it’s no secret that cloud-based platforms are shaping the future for businesses of all sizes, it may surprise you that small businesses make up the biggest group of early adopters.

    Cloud-based architecture allows you to continue running your business, even outside of the showroom or office. All you need is an internet-powered device such as your smartphone, tablet and/or laptop. This also means that you aren’t subject to the “Mac vs PC” debate that many systems are limited by.

    Additional benefits of cloud-based systems include eliminating the problems of in-house servers and IT systems overload and the costs associated with them. It simplifies and streamlines the process of deploying system updates. It also reduces lag time to recall data so you can pull reports and retrieve data in real time.
  5. Security
    As we rely more on working remotely and transferring data outside the walls of your dealership, we must also rely more heavily on data security. A good DMS, especially one running on a cloud platform, offers the best way to protect critical information for small businesses. When it comes to data security, cloud-based solutions built on industry-leading platforms such as AWS (Amazon Web Service) use 256-bit encryption — one of the most secure encryption methods available today.

    Disaster recovery is another aspect of security that needs to be considered. It’s impossible to predict when and where outside influences like natural disasters, power outages, an economic downturn, or a health crisis may lead to downtime for your business. Downtime, no matter how short, can have a negative impact on your bottom line and your reputation. Cloud-based architectures provide quick data recovery for all kinds of emergency situations, and also allows for safe off-premises data back-up that can be accessed by any internet-connected device.
  6. Archival/printing options
    Today’s DMS solutions should provide options when it comes to ancillary tasks such as archival and printer compatibility. Relying solely on in-house hardware to safely store your valuable data could be a very risky and potentially costly gamble. From power outages and viruses to malicious cyberattacks and even stolen laptops, your dealership’s critical data can be irretrievably lost if you don’t have the proper storage, backup, and recovery plans in place. Some systems can autosave all your work throughout the day, which makes this process much easier and removes human error.

    Speaking of saving, the ability to safely archive documents, and have those documents easily and remotely accessible is a must-have for any DMS. A good archival solution should increase productivity by downloading, faxing, printing, and emailing electronic documents in real time.

    The latest DMS solutions can now use laser printers throughout the dealership to quietly and quickly produce perfectly aligned forms. Just imagine how peaceful your dealership can be without those loud impact printers! And think of how happy management will be with the money you could save by reducing the use of expensive Impact Forms and having to reprint them due to misalignment. It should be noted however that there are still several states that require impact forms.

Making sure your DMS offers the right functionality and provides greater efficiency and productivity for your business is only the first part. In part 2 of our blog series on selecting the right DMS, we’ll discuss how picking the right vendor may be just as important.

Read Part 2: Choosing the Right Vendor

Lisa Cho

Lisa Cho is the Product Marketing Manager for CDK Drive Flex. She is responsible for the research, launch, and marketing activities to maximize usage and improve overall business processes and ROI for automotive dealerships. She began her career with CDK Global as a member of the Inside Sales organization, where she focused on creating efficiencies in Fixed Operations and Back Office applications.

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