How To Squeeze More Value from Your DMS With Wayne Youngs – Executive Consultant, Dixon Hughes Moderated by Mike Bowers – Executive Editor, DealersEdge Wayne Youngs is an Executive Consultant with Dixon Hughes PLLC. Wayne specializes in the automotive industry and has been assisting car dealers with process improvements, data processing cost recovery, and contract negotiations for the past 23 years. In addition for the past three years, he has also been helping Dealers become Gramn-Leach Bliley compliant by doing in-depth GLB risk assessments that help dealers meet these new identity security procedures. He is familiar with billing practices and contracts of major DMS ADP, Reynolds & Reynolds ,Arkona and UCS. Prior to joining Dixon Hughes 4 years ago, he spent 3 years with his own dealership consulting firm and 16 years with ADP the last 14 years as their Director of Sales in the Southwest. Dealer Services Group 2009: the Year of “Survival” Mentality Computer Chaos - What Dealers Need to Know April 30, 2009 Wayne Youngs, Executive Consultant Dixon Hughes Dealer Services Group • • • • • Current Industry Overview Dealer Computer Systems Vendor Review Protecting & Using Your Most Valuable Asset IT Outsourcing (MSP’s) 2009 – Shocker Year • # of dealerships sank 4.2% in 2008 • Auto Sales at 26 year low Source: Feb 22nd autoblog Dealer Survival • • • • • • Re-engage in the Dealership Lead by example Monitor solutions Communicate Maintain positive attitude Be more hands-on Survival Tips • Review past success areas • Maintain & increase “absorption rate” of the dealership • Think “out of the box” • Review all expense areas • Review DMS / software applications • Identify change in processes Survival Tips • • • • Review & evaluate all business practices Review all management roles for consolidation Focus with profitability tests Clean existing database for better targeted marketing programs DMS Computer Systems Expectations & Demands for Purchase Process • • • • • • • • Longer selling cycles Pricing pressures – competition Incumbents more aggressive Shorter term contracts Tougher addendum protections – demand More creative on positioning deals – flexibility needed Better discovery – listen to dealership needs More cost justification to add products & change vendors Changing Computer Systems • Know the $ cost to change • Identify needed 3rd party associations – costs involved for some DMS providers • Contracts –Terms & Conditions (know when to sign) • Vendor responsibility & ownership • Review monthly computer bills • Review application & audit equipment • Consolidation of IT services (MSP) What Vendors Consultants Are Seeing Consistent all deals Increased Activity How Consultants Rate Vendors • • • • • Current Products Installs Company Flexibility Sales Force Terms & Conditions • • • • • Demos Service & Support Company Viability DMS Pricing Billing – Full Disclosure Current Products Criteria: • Perception of leading edge software – windows look, touch & feel, diverse products for dealership needs. • Addresses all the basic dealership needs Demos Criteria: • Preparation for the demo, following agenda, people on-site, good listeners onsite or via web-cast, answer client questions, perceived ease of use, right people to address dealership needs. Installs Criteria: • Best communication with sales force on install, lead installer, goes the extra mile for success, listens to client’s needs, “can do” attitude and makes the client feel comfortable. Service & Support Criteria: • Phone answered quickly, questions answered timely, minimum hold time, follow-up when promised, professional caring approach Company Flexibility Criteria: • Ease in doing business, out of the box thinking, creative ideas to get the deal, market-share focus for long term customer (revenue generator). Company Viability Criteria: • Commitment to improvements, addresses weak area with solutions, hitting committed timeline for products and under promise and over deliver. Sales Force Criteria: • Ability to address competitors systems as well as their own, probing & discovery questions, focus on dealership sensitive profit areas vs. applications, professional approach and understands dealership needs and current financial strains. DMS Pricing (Deals) Criteria: • Flexible to address needs of each deal, understands some dealers front load sensitive-other monthly sensitive-ability to move gross where it needs to be to attain deal and creative thinking, no predetermined % pricing Terms & Conditions Criteria: • Understands every deal has different needs, no cookie cutter approach, creative to address application short-falls and client fears and needs. Billing – Full Disclosure Criteria: • Ease of understanding – it is what is represented, addressing credits and over-billings, builds client’s trust. Protect Most Valuable Assets • Database – Clean it – Maintain it through processes – Market to it • Capture e-mail addresses - department benefits? • People Training – Build into contract at time of deal – Improve utilization – Negotiate pre-determined costs What is an MSP? • Manager over the IT resources – Hardware, software, telecom, data networks, technology contract reviews • Protects and responds to security threats – Installation & monitoring of security and firewall • Acts as productivity officer – – – – Monitoring internet usage by employees E-mail SPAM filtering Central help center / tech dispatch Maintain VOIP phone systems Finding the Right MSP • Selection of right MSP – Local providers - small geographic reach • Industry experience – Both dealer industry & dealership technology – DMS and manufacturers • Virtual call center or actual service desk? – Are you calling another country or your contracted vendor? • Economic stability of provider – They are getting under your covers, they better be in business tomorrow! MSP Benefits • Consistent security at dealership and employee level • Control unnecessary added capital expenditures • Equipment / software fit with industry AND dealership • IT vendor consolidation • DMS and MSP partnership - validate vendor cost expenditures • Consistent software updates How a MSP Saves $$ • • • • Increased employee productivity Trouble tickets are handled timely & efficiently Vendor contracts are managed and reviewed Decreased IT overhead Cost savings vary by dealership size but overall value is consistent regardless of dealer size Dealer Services Group • 135+ Dedicated Dealer Services Professionals • 20+ Members Fully Dedicated to Dealer Services • 50+ Years Serving Dealers • 1 Dedicated Dealer Risk Services Group About the Dixon Hughes Dealer Services Group The Dealer Services Group of Dixon Hughes, one of the nation’s top 20 accounting firms, has over 135 dedicated professionals working exclusively with some of the largest dealerships across the country. Providing our clients with industry thought leaders in our Assurance, Tax and Risk Service Groups, we consult on best practices to help maximize efficiencies, decrease costs and understand risk management. Dealerships need an independent CPA firm to provide an objective view to take their business to the next level. At Dixon Hughes, we deliver on both sides of the service equation. A fact you might find a plus. www.dixon-hughes.com/dsg Dealer Services Group THANK YOU Wayne A. Youngs Executive Consultant- Dixon Hughes P.O. Box 3853 Midland , Texas 79702 wyoungs@dixon-hughes.com For more information (877) DLR – CPAS dsg@dixon-hughes.com www.dixon-hughes.com/dsg