DMS Consulting

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:

Together with our client’s key personnel we formulate a master plan based on the dealer’s latest technology bills and goals, the then current contractual obligations, and the dealer’s preferences. This determines the right vendor mix for the bidding process. We also assist with setting up vendor onsite visits and preparing our dealers for demos by providing them with guidelines and questions that are created to unveil potential red flags.
We make sure the configuration of all proposals includes everything the client needs to run his business. We don’t want the vendor coming back in a few months and selling us additional required items when our leverage is non-existent. We also confirm that there are no items included that we don’t need or want.
We track pricing of over 13,000 items from 300+ vendors, which enables us to tell dealers exactly what others pay for technology. By verifying vendor prices against our database we can ensure our clients get the best possible discounts. We also analyze and comment on all contracts to ensure that the best terms offered to anyone are being applied to our clients. We typically will recommend up to 30 changes before we let a client sign a vendor contract.
We assist our dealers in negotiations with all technology vendors and guide them in the evaluation and selection process by sharing our experiences with the various vendors. Because we have so many clients in the US and Canada, we can relate the relevant experiences that other dealers have had with a particular vendor that may be under consideration.
We stay with the client, at no additional charge, for the entire time he retains the system we help him acquire. During this period, we are available as a resource on technology and to answer any questions that may arise. We will audit monthly vendor billings against the agreed contract terms on a quarterly basis or as often as the client submits his bills. It is a rare instance that we do not find abuse or errors.
 

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