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6 Steps for Choosing the Right DMS System

Feb 24, 2015

Your dealership management software (DMS) system is critical to successfully running your business. It's the engine that helps you efficiently manage inventory, accounting, customer relationship management, sales, financing and back office functions. Thus, it's vital to choose the right one.

Wide-ranging DMS options

There are many DMS solutions from which to choose. These range from expensive high-end systems with dynamic and complex functionality to less robust and less costly ones that are adequate for many smaller dealerships. Here are six steps to help you choose the right product:

  1. Create a cross-functional team to evaluate and choose your system. This team should include you (and your fellow owners, if any), general manager, department managers, and controller or CFO. Getting input from these staff members and others will help you make a more informed decision while also helping ensure buy-in to your decision across different departments.

  2. Decide what kind of functionality your dealership requires. Which DMS functions are most important to your dealership? There's no sense buying an expensive DMS system with fancy functions your business will rarely, if ever, use.

    Work with your team to draft a requirements document that details the specific functionality each department in your dealership requires. One practical use would be the ability to download data from the system for analysis. And make sure to choose a DMS solution that includes the functions that will increase efficiency across your dealership.

  3. Determine what complementary services your dealership needs. Most DMS vendors offer a wide range of complementary services in addition to their core software — such as consulting, data analytics, office forms and supplies, and advanced training. Ask potential vendors about their complementary services and discuss with your team which ones might add value to your dealership by helping you operate more efficiently.

  4. Ask vendors about the DMS implementation process and the levels of training and support they provide. Choosing the right DMS solution is just the first step — you also need to make sure your system is implemented properly. Ask potential vendors detailed questions about how implementation will work at your dealership, including a projected timeline with key dates and operational responsibilities.

    Adequate training and support also are critical to a successful DMS implementation. Be sure to ask vendors what kinds of training and support programs they offer. For example, do they offer on-site training for your employees, or is training done via computer? And is technical support offered in person or via the phone, Internet or e-mail?

  5. Look at the total cost of DMS implementation, not only the software sticker price. There's much more to a DMS system than just software. Full implementation also typically includes hardware, maintenance, database configuration, training, and software and hardware support. Ask vendors for a total implementation price, and then make your decision based on the package that delivers the most value for your dealership.

  6. Get opinions from other dealers who're currently using the DMS system you're considering. What issues are they having with the system, and what do they like — and dislike — most about it?  Did their conversion to the new DMS system go smoothly?  What were some of the bumps in the road they experienced?

No "one-size-fits-all" approach

Every dealership is different, so there's no one-size-fits-all approach to choosing a DMS system. By following these steps, you'll boost your chances of selecting the right solution for your dealership — one that delivers the functionality and services you need, without all of the bells and whistles that you don't need and shouldn't pay for.

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Dawn Rosoff

Dawn Rosoff has extensive knowledge of accounting and technical reporting standards who works with professional service companies, manufacturers, distributors and automotive dealerships on accounting, management and tax-related issues.

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