What is a Dealer Management System in 2023 ? (a history lesson!)

Written by Simon Verona

Introduction

Dealer Management System is a phrase that is used extensively within Car, Van, Motorhome and Caravan dealerships.

But, what is a Dealer Management System ?  and what is it not ?

As a supplier of Dealer Management Systems, with our Navigator DMS, we are probably in a good position to answer this question!

A good place to start is a history lesson.   Maybe following the journey my father (and now retired business partner) went through in the 70s and 80s in the dealership he ran.

1970s

1975 - at this point, computers didn't really exist.  The highest piece of electronic tech in the office would be a calculator.

In those days, paper was king, invoices, job cards, sales orders were hand written on pre-printed cards.  Stock was kept in ledger books or in big specialist files for parts stock.  Accounting was in Ledger books. T-Card boards ruled for visuals! 

This was all highly admin intensive, with information being manually moved around the dealership via paper record being handed from person to person and information moving from invoice -> accounts via someone physically copy-hand writing the information.

It is hard to imagine this age now, but that's how life in a dealership was.  

The dealership needed very strict processes for paper flow, record keeping and manual auditing and reconciliation to ensure that none was lost.   

Looking at this now, with the benefit of applying modern technology, then it is easy to see where the big wins could be made.

Stock Control was a key item - particularly in parts, where parts stock would have been much much larger due to orders and deliveries being 2 weeks apart (no next day ordering in those days for stock!).

Invoicing was another item that could easily be computerised

and Accounting.

Storage was expensive in those days, so customer record databases weren't such a thing.


In the late seventies, many dealerships would have implemented Parts Stock Control and Invoicing systems, and separate Accounting Systems. These weren't always integrated, so in many ways the computer software literally mirrored the existing paper process - but in computer form.  So the parts stock record cards would be replaced with a computerised Parts Stock Control System.  Manual hand-written invoices would be replaced by computer generated ones.  

Accounting would often by done by manually copy-typing the invoice details from a computerised carbon-copy of an invoice (yes, invoices were generated on multipart dot-matrix printers - for the millennials it's time to google!)

Over the next few years, these systems improved.   Workshop Invoicing was added, along with basic Vehicle Invoicing (though Sales Orders were generally manually written into the noughties!)

As they improved, the individual modules would have been integrated so invoicing would link with accounts without re-keying for example.  Parts would link to workshop invoicing so parts could effectively be booked to a job. 

1980s

This was still not "Dealer Management" though it was the start of a system.  Computerised "paper" would still flow around the dealership so for example an internal  Vehicle Preparation invoice would still be printed and manually handed to the Sales Department, even though the cost had automatically been added to the stand in value for the stock vehicle.

The first real Dealer Management Systems appeared in the early 80s.  These took these integrated data processing systems and added workflows, management reporting and business controls.

So, for example, The Sales Team might be able to generate a Computerised request for Preparation Work from within the Vehicle Sales System which appeared in the workshop.  

At this time, Customer Databases started to pop up.   Many systems actually had separate Customer databases for Sales and Aftersales and details still needed manually keying into both!  Customer data started to be collated, organised and reported on.

Some examples of systems suppliers in those days are names that are long gone (or have evolved), systems such as Kerridge, Kalamazoo, Modems (disclosure: Modems was my family company in the 80s)

During the 80s the feature-set of these systems increased and most would encompass the following core features


  • Parts and vehicle stock control
  • Workshop job management
  • Invoicing for vehicles, workshop and parts
  • Accounting
  • Customer database a rudimentary marketing


Generally car dealerships would only have a single computer system in their dealership - their DMS. This wasn't pc based, no mouse, no graphics - simply green screens connected to an expensive computer server whirring away in the back of the Accounts Department.

The advent of the PC in the second half of the 80s brought new opportunities.

The growth of specialist applications commenced.

Over the next few years a number of PC based applications were used in the dealership - ranging from :-

  • OEM Systems such as Parts & Vehicle Ordered, Parts Catalogues, Technical Workshop Systems etc
  • Finance Systems (remember the Pendle Optimiser!)
  • Showroom Systems - early CRM systems


These ironically added specific focused functionality but also lost some of the integrated workflow that the original DMS systems gained by creating the requirement to manually move information and create processes to do so.    ie Adding additional manual tasks that were outside of the system.

In the following years, DMS systems integrated some of these solutions via data sharing between these systems.

1990s

Tim Berners-Lee invented the world wide Web back in 1989 and through the 90s technology, driven by the Internet changed how dealers worked massively.

Advertisers such as Autotrader went online. Finance companies produced Web based applications for finance quotation and application along with a host of other Internet based systems and processes - including the dealers own Web site..

DMS systems have continued to evolve, embracing these and providing not only data integration but also clean integration of these third party "expert" systems into the work flow.

So, a DMS may today be able to provide a hand-off from its  sales order processing system directly to a third party Finance Application system seamlessly and without the user believing they have left their DMS.

Internet technology has enabled lots of other things. Vehicle adverts can be automatically posted onto Web sites and third party advertisers. Telephone systems can cleanly integrate so when the phone rings, the DMS jumps to life and tells you who is calling.

Payment solutions from credit card machines to ecommerce can be fully integrated.

Today

The DMS is now the spine of the dealership forming the backbone of dealer processes and the central source of truth for all dealer data but yet able to fully integrate third party applications, services and data seamlessly.

This is still developing. The advent of mobile applications and customer facing Web applications means that the customer can directly consume and enter data into the DMS without a member of the dealer team interacting.

So a customer can receive an email from the dealership on his phone with his service invoice, requesting him to pay. He can click, enter his credit card details and the invoice will be paid with the payment automatically posted into the DMS.

That service invoice can be at the end of a chain which stated with the dealer sending an email advising the customer that his car is due a service. The customer clicked a button on the email and booked himself in - creating and appointment in his DMS.

This is not the future. This is reality. Today.

The customer is self-serving, gaining extra satisfaction, gaining extra loyalty and trust with the dealer and becoming an extension of the dealership administration team.

The ultimate win-win

The future ?

The DMS continues to progress, develop and change as dealerships and technology change.

So, to answer the original question - what is a DMS?

Today, it is a system that

  • stores all core Dealer and Customer Data,
  • creating workflows,
  • does all invoicing
  • and all accounting
  • marketing
  • links third party systems and services into the workflows, moving data as needed
  • provides links direct to the internet
  • involves the customer directly in dealership workflow.

The future looks bright for DMS.

It's why we build Navigator!




What is a Dealer Management System in 2023 ? (a history lesson!)

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