Everything Seems Obvious in Hindsight!
Chris Kohart has over 30 years of direct management experience in the heavy construction equipment distribution industry and more than a decade in the technology sector directly supporting equipment dealers globally. Chris is Principal of C.A. Kohart & Associates, a management and marketing consulting firm dedicated to equipment dealerships, private equity investment firms working within the industry, as well as OEM’s and industry solutions providers. He brings substantial knowledge in all aspects of dealer management, product support, sales, financial planning, cost control, operations, customer retention, and the technology that best fits their needs. Chris possesses a unique ability to translate conceptual models into specific processes and growth strategies, increasing operations excellence. Tonight, he shares some of his thoughts on technology in “Everything Seems Obvious in Hindsight!”
The thirty-plus years in dealership management roles and twelve years in the IT world supporting dealers globally has provided me with an understanding of how dealership management views the “digital transformation” revolution. No matter the location or the size of the dealership, the concerns are always very similar: our dealership management platform is not ideal, but we know how it works (or we think we do), and we don’t have the time (or money) to make a change; we’ve asked our customers what they want, and the resounding reply is that we need to be leading with current technology to manage their fleet and their business successfully.
How do we get the dealership to the point where we’re giving our customers (they are our business partners) what they need while removing some of the constraints placed on our business by the current business system? How do we accomplish this without breaking the bank or severely limiting operations while the conversion takes place? It’s an extraordinarily complex and challenging process to undertake, but very necessary. Here are suggestions for basic first steps before making a decision:
- Ask your business partners:
- Do you use our online tools now? If not, why not?
- How do we improve our current digital offerings to you?
- What can we add to our digital presence to better serve you?
- Audit your current business system:
- Are you using your existing software to its capacity?
- What functions that are available in your solution are you not using and why?
- Can we find a way to utilize/optimize the functions we are not using? Why not?
- What are other software programs used within your dealership today? Why are these functions not being completed within your business system?
- Does your current solution incorporate integrations with?
- OEM’s: (e.g., whole goods and parts ordering, warranty claim and reconciliation, telematics, standard repair hours, machine intelligence)
- Your financial institution, credit card processing, sales tax management, purchasing solutions such as Ariba
- Map out and identify every single software package deployed within your dealership.
- “One-offs” that may only be used by one or two individuals.
- Understand why these are being deployed separately instead of completing the process within your business solution. The higher the number, the greater the chance you are either on the wrong solution, or your people do not fully understand how to utilize your current solution.
- Are your internal reporting capabilities able to meet current requirements?
- How many reports run automatically every month? How many are necessary?
- Are your people able to quickly generate ad-hoc reports?
- What reports are mission-critical for the growth and success of the business?
- How do we deliver them?
- Review your three and five-year business plans: will your current software support the organizational and market changes you plan to accomplish?
If the results to the above points are all positive, and you’re using few, if any, “one-offs,” you are in good shape. However, if the results indicate your current business system is lacking, you should begin preparing to either upgrade or replace it. Here are some thoughts on decision-making steps to take (in parallel):
- Upgrade or replacement:
- Does your current solution provider offer a more up-to-date version of the software you’re currently using? If so, that may be the most cost-effective solution to your problem.
- Begin understanding the solutions on the market that fit your dealership today and where you plan for your dealership to be in five years
- Cost of transformation (over five years)
- Pre-selection costs (all due diligence expenses)
- Software (including enhancements and support)
- Hardware (servers, upgraded laptops/desktops)
- IT services (either internal or contracted) to support the entire IT landscape
- Implementation services (everything from data migration to employee training to go-live and post-go-live support)
- Add 30% to the above as projects rarely are completed on time or within the original budget
- Effects on your customers, employees, and daily operations:
- What are the positive and negative effects of staying on your current solution vs. upgrade or replacement?
- How do we accentuate the positive and mitigate the negative?
- Net long-term benefits to the dealership
- What customer-facing improvements do you require? (Suggestion – for now, stick with the absolute “must-haves”)
- What operational efficiencies (ROI) will you gain (people, time, customer satisfaction)
- Dealership Processes:
- Identify and understand every process in all departments. This evolution will create the hierarchy for new solution requirements and provide you with a map to compare dealer management solutions accurately.
- Chances are, there are many different variations of each process in your dealership today. Your dealership needs to conform to one set of standard processes for every area of the business. Enforce the golden rule of the “standard process,” and your eventual upgrade/replacement will run smoother, and the operating efficiencies gained will be enormous. Your process maps can also become the basis for employee training and system reference, reducing training time and cost.
Replacing your dealer business system while operating your business is difficult but possible if the proper planning is done and expectations are set within your dealership and with your business partners. There are no universal or straightforward answers in making these decisions. If you decide to seek outside help, many qualified individuals can help guide you successfully through the process. There are plenty of ERP selection consultants; make sure the firm you engage has a track record of working with dealers your size and that they fully understand the industry.