|IN THIS ISSUE JUNE 2012|
George Russell, Currie Management Consultants
Do you think of your dealer business management software as technology? How about the software applications on your personal computers and other electronic devices?
The mission of this column is to stimulate your thinking about the use of technology to improve the operational performance and profitability of your dealership. This month we’ll discuss some simple but effective ways farm equipment dealers use the more advanced features of their software. Our underlying premise is a dealership cannot operate profitability without computer software, and the more advanced the software, the more benefits are possible. Like most businesses, farm equipment dealerships don’t fully utilize the features available.
“Not only are we finding that dealerships are not utilizing existing tools to increase profitability, we also find as they add new technology they’re not considering integration as one of the key deciding factors in technology acquisition. All technology essential to dealer operations should integrate seamlessly and allow for easy sharing of information,” says Jennie Davis, dealership technology specialist, Currie Management Consultants.
Here are some examples of business software you should consider using to better integrate your dealership operations. The first is the most important because of the need in most dealerships for a higher degree of integration of information.
All Dealership Departments: Profit Driver — Faster and More Efficient Communication
How Technology is Used: Facilitate rapid communication within the dealership
Results: Use of instant messaging capability built into standard business software gives everyone in the dealership with access to the software the ability to communicate with colleagues regarding specific customers, sales, work orders or parts.
There are several features built into standard business software and specific dealer business management programs. The most popular examples of standard business software are Microsoft Office including Outlook and Google.
Standard Apps: Many dealerships using MS Office or Outlook don’t use its Microsoft Communicator capability. Multi-store dealerships could see the biggest benefits as this tool allows personnel to stay in touch more effectively and more easily collaborate with coworkers. Of course, they could send emails, but the ability to see an instant message is often faster and more effective.
Google programs are used more and more in dealerships beyond just searching the Internet, using Gmail or for driving directions using Google Maps. Google applications now include document sharing by way of Google Docs and instant message. The capabilities of document sharing are that two more colleagues can see and modify the same information as the same time.
Dealer-Specific Apps: There are several examples of specific dealer business management programs that facilitate effective internal communications. While Currie Management Consultants nor Farm Equipment magazine do not endorse specific programs, one example that demonstrates this type of capability is Charter Software’s Aspen product.
Responding to the Technology for Profits column in the April/May 2012 issue of Farm Equipment (see “Smart Uses for Smart Phones in the Dealership”) Anne Salemo, president of Charter Software, offered some examples of smartphone integration of business management systems. She calls it an “interactive mobility” solution that allows users of Charter’s business management system to access important data from their smartphones or tablets.
In addition, the system allows users to create instant messages on the fly from most screens with the option for the message recipient to link to the relevant record (customer, part invoice, voucher, journal entry or unit) and immediately access the work at hand by double-clicking. The user can also assign tasks to an individual or a team and monitor their completion with due dates, etc.
Along with instant messaging between two or more co-workers, these programs often have other capabilities such as video conferencing to meet with coworkers or customers, sending out-of-office messages or placing conference calls.
How the Technology Drives Profits: Many dealerships, especially large and/or multiple-location operations, struggle with internal communication. Using technology like instant messaging will not solve the entire problem, but with its ease and speed of use, it can minimize delays and enhance overall communications.
Service Department: Profit Driver — Work in Process Less Than 15%
How Technology is Used: Produce regular reports that identify work orders requiring special attention.
Most dealer business management systems handle work orders by integrating the information from the shop about the status of work orders and from the parts department about the ordering and pricing of parts. With this essential information, the software can provide reports that help identify which work orders may require special attention to close and bill.
An example is a report that would show work orders that don’t have any service shop activity or parts department activity in the previous two days. This may be a special report but most systems available today can create it.
Results: This report is used by the service manager or accounting department to ask why there has been no activity, and to push for a resolution of any problem that may be holding up the closing of the job.
How the technology drives profits: If there is a disciplined follow-up to each inactive work order, then work in process (WIP) can be reduced. Of course, the lack of a disciplined follow-up is often the reason for a high level of WIP, so this report by itself will not solve the problem, but it will provide the visibility to work orders that require attention.
Parts Department: Profit Driver — Inventory Turnover and Improved Fill Rates
How Technology is Used: Show the fill rate for stocking parts
Results: Business software for managing parts contains information on which parts are considered stocking parts and the frequency those parts are ordered not on stock orders. With this information, a parts manager can focus on stocking parts activity and to calculate the turnover and fill rates for stocking parts.
How the Technology Drives Profits: By definition, stocking parts are held in stock so that the fill rate for these parts should be 100%. If so, then the cost of the part will be low and customer satisfaction high.
Many progressive dealerships already take advantage of these available and inexpensive technologies. For others, these examples represent added capabilities that can result in better performance and profitability.