A Dealership Management System (DMS) is the centerpiece of a dealer’s software suite. By aligning people, processes and information across dealership departments, the right DMS can facilitate efficiency, increase customer satisfaction, and improve the bottom line. Therefore finding the best-possible solution for a dealer’s distinctive needs can be crucial for succeeding in today’s rapidly changing economy.
Big DMS Vendors Dictate Price and Terms
When it comes to DMS vendor market share, little has changed since the early 2000s when Universal Computer Systems (UCS) acquired Reynolds and Reynolds (R&R) and dominated the DMS market. Today’s top two DMS providers Automatic Data Processing Dealer Services (ADP) and R&R capture around 80 percent of the DMS market, which can leave dealers with fewer viable options and less leverage when negotiating competitive rates and favorable addenda. Too often have we seen dealers being caught up in situations where DMS vendors capitalized on their bargaining position by overcharging for their technology solutions, applying questionable contract language, lacking system support, or claiming unreasonable buyouts just to mention a few.
DMS Market Uncertainty Complicates Vendor Selection
And yet, recent market activities like ADP’s Dealer Services spin-off, rumors that certain vendors may be up for sale, Dealertrack’s acquisition of Dealer.com, Autosoft’s repositioning initiative, or Dominion’s partnership with Microsoft indicate that the DMS landscape is about to change. We expect established Tier-1 DMS players to rethink their dealer approach and smaller DMS providers to become more attractive. As always, increased competition will lead to stronger differentiation between vendors and fuel innovation. But with all this flux in the market, how do dealers find the right DMS vendor? What DMS services should they sign up for? And how do dealers avoid overpayment and unfavorable terms?
Gillrie Institute DMS Consulting
Selecting a DMS can be a painful process. It is not about fighting fearlessly for the best price and terms, but following the right set of rules when playing in the DMS negotiations arena. We make the difference in the outcome of our client’s critical dealership technology initiatives. With our advice and tools our clients:
- Realize substantial savings on DMS purchasing decisions,
- Achieve maximum contract protection with the best terms,
- Improve system utilization with solutions that work, and
- Save a lot of time and wasted effort.
Here is a quick recap of what we do for clients: