Five years ago, information technology wasn’t a major issue in most F&I offices. The reason was simple: Most dealers didn’t use nearly as much technology as they do today.
The vast majority of first-generation technology solutions were stand-alone systems, all running as separate applications. It was not uncommon to have one set of stand-alone systems for sales, another within the F&I department and yet another for service. The stand-alone nature of these systems required data to be manually transferred. Duplicate data entry meant that processes that should have taken minutes took hours. Deals were delayed. Customers were annoyed. Opportunities to up-sell and profit were lost.
The Changing Landscape
Thankfully, the landscape has changed. The various partners that you now depend upon – manufacturers, lenders, vehicle protection providers, marketing and sales technology vendors – have migrated their products and services to Internet platforms.
Also referred to as ASPs or "application service providers," these new systems offer a consistent platform for conducting business which will give you the opportunity to create an integrated workflow between departments. This integration can produce significant improvements in CSI and profits on every deal.
One Dealer’s Struggle…and Success
Suburban Collection, a Michigan-based group of 42 franchises, decided in 2004 to make seamless, end-to-end workflow a strategic priority. Gary Allgeier, the group’s Financial Services Director, recalls how Suburban Collection began the task of streamlining its workflow:
Using a modern-day version of Frederick Taylor’s time-and-motion methodology, Allgeier found there were eight separate times in which the same information had to be entered manually to complete all paperwork for a typical deal. The process was laborious, time-consuming and highly redundant. It also offered multiple opportunities to make mistakes.
“No one benefited from the old process,” says Allgeier, who has labored with a handful of trusted vendors to reduce the complexity of the group’s technology systems, “We worked hard to reduce the cycle time and streamline our workflow, and now are at the point where we only have to enter data twice.”
“We’re hoping to continue streamlining so we only need to enter the data once.” With that said, Allgeier characterizes workflow as “our group’s biggest challenge and biggest opportunity.”
Initially, changes in the regulatory environment drove the group’s efforts. “It’s a complicated time for dealers,” Allgeier says. “We’re trying to expedite the process for our customers and satisfy the regulatory mandates.”
Suburban Collection correctly foresaw that if it could get its technology components working together, the sales and finance process would go faster. Not only have they reduced their data entry time, but they shortened the cycle time: “The customer is happy, we have more time to sell and we’re fully compliant with the regulations. It’s like winning the trifecta,” says Allgeier.
Do your systems help or hamper each deal? It may be time to revisit how well your systems integrate if two or more of these scenarios regularly happen in your dealership:
These are the red flags that should spur you to take action. The investment you make in using integrated systems can generate a big payoff, often immediately.
What’s at stake in your dealership? Consider Gary Allgeier’s situation again: “Before we made workflow a priority, we were spending so much time on paperwork that everyone was feeling frustrated – our employees and our customers. Today, the managers we pay to generate revenue are actually spending their time generating revenue – not entering data.”
Vol 3, Issue 10
Chinese carmaker Zotye Automobile has formed a U.S. sales and distribution company and has begun a search for dealers of a yet-to-be-named SUV.