How To Change DMS Without The Headache

I assisted over one thousand dealers in selecting dealership technology. Besides learning the ins and outs of DealerTech, I also studied how dealers can switch software providers more efficiently. In particular, how dealers can change Dealership Management Systems (DMS) without the headache. This article will introduce dealers to six building blocks for a successful DMS conversion. I will neither discuss the intricacies of negotiating for DealerTech nor if switching DMS was the right choice in the first place. 

1. Clear DMS Contractual Obligations:

Naturally, for dealers to be in-market for a new DMS, they need to send a DMS termination or a non-auto renewal letter to avoid the extension of their existing DMS contract. If dealers are not aware of their DMS contract end date, they should be sending a contractual obligations letter first. In some cases, dealers need to handle staggered DMS agreements with multiple contract end dates and not one. If dealers cancel DMS services before the official contract end date, dealers would have to pay a buyout. Always send non-auto renewal or termination letters via certified mail for a paper trail. Dealers should check for supplementary DMS-related services that may exist on separate contracts. For example, if the dealer had signed other contracts besides the DMS, then those agreements very likely require separate cancellations. Think of Automotive Customer Relationship Management (CRM) systems, email marketing services, website services, data management, or even phone systems. Review any existing agreements with former DMS Finance/Leasing companies or their affiliates to avoid any lease auto-renewals or buyouts.

2. Lead The Dealership Team & DMS Change:

Leadership is one of the most significant contributors to a successful DMS conversion. Moving an entire dealership to a new operating system requires buy-in from all stakeholders to avoid any resistance during the DMS implementation. Ideally, dealer executives earn the team approval – even if not formally – before signing the new DMS contract. Align People-Process-Information by reviewing all current dealership processes and team member roles. Switching DMS systems can be an excellent opportunity to redesign and optimize workflows in all departments. Training is as essential as the DMS itself. Without the proper introduction to the system’s keystrokes, workflow, and user interface, DMS conversions most often fail. Dealers should never make the mistake of cutting short on training because of potential costs. Also, they should make training mandatory for all DMS user groups in the dealership. 

3. Manage the DMS Project Efficiently:

Every DMS conversion project comes with a project manager from the DMS vendor. There is an upside to installing a similar role at the dealership to drive the DMS conversion and centralize the vendor communication. Dealers can expect the DMS vendors’ installation team to reach out with the project plan, timetable, and workbook. Dealers should request detailed contact information and share their main points of contact, including their dealership project lead. Once dealers receive the initial documentation from the new DMS provider, they should ask for detailed information about the training and installation schedule.

I can recommend setting up weekly or even daily meetings initially to check on the progress, the learnings, the responsibilities, and the estimated time of accomplishment. Dealers should always clarify the installation lead-time with the new DMS vendor. The typical runway to get on an install schedule with any DMS provider varies between 3-6 months. Besides the training and install schedules, it can be beneficial to run an actual logbook to document when the DMS trainers and installers are onsite in the dealership. Dealership groups have to decide if they prefer a phased DMS rollout or a simultaneous DMS switch.

4. Support The DMS Data Conversion & DMS Setup:

Dealers need to support the new DMS provider in the process of pulling the DMS data from the incumbent system. Before starting the DMS switch, dealers should identify the data fields that cannot be converted. Dealers should also check the data quality before the DMS data conversion to avoid a garbage-in/garbage-out scenario. Here they can decide if data cleansing or scrubbing is required. Besides converting master and transactional data from the existing DMS, many dealers also need to convert the DMS archive of image files. In some cases, there are third parties required to assist in this process. Provide all forms to the new DMS provider for programming. It is worth the thought of switching the dealership CRM before the DMS system to ease the transition and improve the data quality. Dealers can start document scanning with an outside vendor if they are not receiving this service through the new DMS company.

5. Provide the Right Dealership IT Infrastructure:

Some dealers are entrenched in a full-turnkey DMS IT platform, including server and print equipment, network gear, phone system, Internet and access services, and even network security applications. Very likely, dealers will have to replace all of these services, however, at lower costs. If dealers cannot repurpose equipment due to compatibility restrictions, they can try to resell gear, for example, like Impact printers to ACE Solutions at www.mydealerdirect.com. Dealers have to replace existing equipment if it does not meet the specifications of the new DMS vendor, or if it was rented or leased. In the same context, dealers will have to buy new equipment for new applications. For example, this applies to Service write-up tools with tablet PCs, color printers for the service lane, and wireless network gear. Dealers should always review their needs on Internet speed, and data security as well. Most modern dealership technology solutions are now deployed without onsite dealership servers.

6. Embrace DMS Performance Management:

After all, an effective DMS transition and performance management is essential to get off to a good start. Dealers should request someone from the new DMS provider at the dealership for the first payroll and month-end processing. Dealers should ask for the contact information of their success and account manager, and establish a review cycle to monitor the DMS utilization. Ideally, the new DMS vendor brings its onsite trainer team back after 3-6 months for follow-up training to reinforce the new processes. Dealers should keep an eye on their dealership staff performance and identify skill gaps to build a sufficient ongoing training schedule. Dealers should also follow up with all 3rd parties to monitor the new DMS integrations. 

For more tips on how to change DMS providers efficiently, download my 50-point inspection form with step-by-step instructions.