Do You Need ASP ASAP?

More dealers are using Internet-delivered applications to help run their dealerships.

These days it's rare to find a dealership that isn't using the Internet to conduct at least some aspect of their operation, often with the help of an application service provider (ASP).

An ASP can offer advantages that we'll look at in a moment. First, let's define ASP. It's often used, not always understood.

An ASP is essentially a company that offers Internet access to software that would otherwise have to be housed and maintained at a dealership.

It can provide dealerships significant information technology cost advantages because an ASP hosts, maintains and upgrades the equipment, ensures application and data security, provides data backup and storage for dealership e-business program applications, and delivers these applications across the Internet.

That means a dealership using an ASP only needs in-store PCs and Internet access to run its e-business program.

So why is using such a provider more advantageous than dealers hosting their own servers? Reasons include:

That's the short list. But a word of caution: Choose your ASP carefully. You're not just looking for a technology provider. You need a provider that understands the automotive business and is seriously committed to developing new technology..

Business needs and market conditions change and evolve continually. Any ASP that's worthy of your business should have a world-class enterprise infrastructure using best-of-breed technologies. They should have a demonstrated track record of application performance and reliability.

If your e-business program isn't helping you move forward, then it's actively holding you back.

As dealer management systems are rewritten to take advantage of open architecture and communication standards, dealers will benefit from having access to best-of-breed applications to run all aspects of their business.

These applications will merge, leverage and share data (data that today often resides in multiple data stores) and they'll provide dealers with richer, more accurate and more actionable information about customers and prospects.

I predict that in the future dealership business solutions will be based almost exclusively on the ASP model. It won't be an overnight transition, but the ASP model is clearly the way of the future.

The long-term cost savings, valuable data mining options, and program flexibility offered by the ASP model all represent clear competitive advantages for dealers. Let's face it, it doesn't matter how on the ball you are if your dealership's technology is a ball and chain.

John Holt is president and CEO of The Cobalt Group, a provider of e-business software and services to the automotive retail market.