It's time for dealers to get on board. That's the message the Standards for Technology in Automotive Retail (STAR) organization will preach at this month's National Automobile Dealers Association convention.
The one-year-old STAR committee was formed to develop common technology standards to help dealerships with the management, integration and exchange of data cost-effectively.
The idea for the STAR committee stems from a symposium of NADA's Information Technology (IT) committee after a comment from an attendee, says, H. Carter Myers III, NADA's new chairman and former IT committee chairman.
The committee merged with the Automotive Manufacturers Dealer Systems Group (AMDSG) in May, and is now comprised of 26 members — 17 OEMs, eight retail service providers and NADA.
The goal is to create a standardized network that will allow the various IT systems of the OEM, dealer and retail service providers to communicate with each other. Right now, dealers have multiple connections and hook-ups for the many manufacturer communications systems, DMS systems and CRM applications — and some dealers pay almost as much as $2,000 for each connection.
Myers explains, “It's very costly for the dealers and it hasn't done much to increase dealer productivity. We're still trying to determine just how to use the technology.”
It's confusing for many dealers who just want to focus on selling cars — and not worry about what XML actually is, or the difference between a LAN and a WAN. Yet, dealers realize it's an important subject. An EDS survey reveals the majority of dealers believe IT will be an important part of their business in the next three to five years.
Although NADA is a member and three dealers are on the steering committee, dealers have been mostly silent in the area of IT standards. One reason, says Chris Fisher, the communications chairman for STAR, is “dealers have some real heartburn when it comes to IT issues. Right now, they end up paying for everything. They're gun shy because of the expense.”
STAR members believe the Internet has reached a point where many of the standards can be built upon. “We think the momentum is right and want to capitalize on that,” says Fisher.
STAR is making progress. Standards for Local Area Networks (LAN), exchange standards between dealers and manufacturers, XML messaging standards, and Data Transfer specifications already have been developed.
In 2002, STAR will work on developing standards for parts ordering, service/warranty, and sales leads. This translates to education, improving dealer communication systems (DCS), establishing dealer infrastructure guidelines and using real time information exchange.
“We've strategically chosen areas like these that are critical to dealership operations,” explains Fisher.
STAR is making a presentation to dealers in New Orleans during the NADA convention emphasizing direct participation from 30 of the top dealership groups.
“We're laying out our vision to them and inviting them to participate in the process,” Fisher says. “We'll ask them to spend some time learning about STAR, study the issues and provide recommendations. The message to dealers is: ‘Get involved so you can impact what's being built for you.’”
There is movement toward common network standards on other fronts also. Last year, the Big Three domestic automakers published a document for their dealers called “Dealership Infrastructure: A Common Vision and Guideline for Building an Internet-Ready Dealership Network.” Also known as the Olympus document, it offers technical details for establishing network standards in the dealership.
STAR has been in discussions with the Big Three to adopt the document into a single strategy.
Says Fisher, “It's a great document. The Big Three has done some great work in putting it together. We'd rather not have two perceived sets of standards out there, though. It's important to have one voice for the OEMs, dealers and RSPs.”
Also, allowing STAR to adopt the document as part of its strategy would remove the perception some dealers have of having more things presented to them by the manufacturer.
Some OEMs, meanwhile, are active in trying to find the right IT solutions with their dealers.
Toyota Motor Sales USA has taken a big step with the launch of its Dealer Daily system.
General Motors also is working on an IT solution with its dealers that should be ready in about six months.
So, is the industry going to hit its goal of a single set of network standards? “I think it's a question of if, not when,” Fisher says. “But I think, realistically, it's going to be three to five years.”
Standards for Technology in Automotive Retail membership roster:
Retail Service Providers: ADP, Arkona, Auto/Mate, Inc., EDS Automotive Retail Group, PBS Financial Systems Inc., Reynolds & Reynolds, Sun Micro-systems, UCS.
Manufacturers: American Honda Motor Co., Inc.; American Isuzu Motors, Inc.; American Suzuki Motor Corp.; BMW of North America, Inc.; DaimlerChrysler; Ford Motor Company; General Motors Corp.; Jaguar Cars; Kia Motors America, Inc.; Mazda North American Operations; Mitsubishi Motor Sales of America, Inc.; Nissan North America, Inc.; Porsche Cars, North America, Inc.; Saab Cars USA; Toyota Motor Sales, USA; Volkswagen of America; Volvo Cars of North America.