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Integration? What's that and what do I do with it? What about my DMS?
- By Alex Snyder
Integration as defined on Dictionary.com: an act or instance of combining into an integral whole. Okay...that doesn't really help. How about Wikipedia? Awesome - they have an entry for "System Integration": is the bringing together of the component subsystems into one system and ensuring that the subsystem function together as a system. There's a lot more here.
That's the web-technical definition, but why the hell am I writing about it? Jeff and I get on the phone when one of us is taking a long drive because we have longer phone calls than most friggin' women do! Yesterday evening Jeff was on the road and we had a few things to discuss about DealerRefresh. After we got some house keeping out of the way, we started discussing the various things we've been tackling at work lately - no bosses - we're not sharing information (for those of you who don't know, Jeff and I actually have some competing stores). We were discussing the different problems we have in diagnosing inventory issues and somehow that led to the integration topic. After debating over who is currently dealing with more BS around getting systems to cooperate, I ended up volunteering to write this article (is that what happens when you deal with a ton of BS?). Anyway, that's how we got here.
I'm sure Jeff and I aren't the only people who have to pop aspirins on a daily basis because systems don't "integrate", but we are wondering why vendors toss the "integration" word around like it is a free Ferrari. Up until yesterday evening I believed integration to be something along the lines of Microsoft Windows and Microsoft Word where everything is virtually seamless and there are rarely conflictions. Not like Insert DMS Name here and Any Vendor Name here. After reading some definitions of the word "integration" I'm starting to realize that integration can simply mean that two systems work together. Technically our vendors do this through feeds and the word "integration" (at least I assume) is used because it sounds better in a sales pitch. So if you input your inventory into ADP and HomeNet pulls it out, sugar coats it, then sends it to the web you could actually call that an integration between ADP and HomeNet where ADP would be the subsystem of HomeNet in the situation where your goal is to get inventory on the web.
What to talk to your vendor about when they do throw out the word "Integration"?
If you've read this far, I'm sorry, I definitely put a lot of worthless junk together in 3 paragraphs that could have been said in 3 sentences, so let's get to something valuable:
Two things first:
- I am just someone who has always been on the dealership side of things - I am no expert on coding a data feed. I haven't read a book or attended any classes on it.
- Working out a data feed is extremely frustrating and doesn't happen just by pushing a button.
If a vendor tells you he integrates with so-and-so, your first question should be: How? Is it done by pushing CSV files to a FTP server that happens every couple of hours or do you have straight access to push data in real time to the other vendor's system? So the first question is How? and the second question is How often?
If you're talking to a vendor who says they can push/pull with your DMS (ADP, Arkona, Reynolds & Reynolds) then that sparks a few more questions on the How?
- Have you paid your DMS dues and have actual certification to push/pull directly with them? - most of the time this is going to be a No...I'll explain and criticize this in a later posting.
- Are you installing something on my network that accesses our DMS? Technically this would be a hack.
- If you're installing something on my network, then I need to know if you're exploiting a hole in my DMS that could be closed any day. That isn't a big deal to me, but what is your contingency plan if that hole is patched?
- If you're installing something on my network to access the network just like a regular user, then great! Unfortunately, in today's DMS world, this is the best way for a vendor to gain access if they haven't been through certification.
I'm sure at this point in the article, I have ticked off all the DMS companies...and I will address that in another article later.
Some new types of "integrations" have been happening in these recent years. Used car pricing tools have the ability to push the pricing of a vehicle to an inventory aggregator such as HomeNet, VINSolutions, your CRM or even your web site host. This type of data feed is done a little differently because it typically is done on a car by car basis instead of just sending a CSV file full of changes to a FTP server. This, to me, seems to be the cleanest and closest thing to what I would consider "integration". I have been watching this happen between vAuto and HomeNet for a while and it is almost real time with delays being as long as 30 minutes (no big deal). Soon I will be watching this same type of integration between another set of vendors and am very excited. I hope this data sharing between the more proactive vendors will lead to a new type of "integration" for the industry.
Sharing of dealership data is a must in this digital age. We either need our vendors to speak to one another or a single system that can do it all...and do it all well (so don't get anymore plans to try that again big DMS guy). I believe "integration" should be a "standard" option on all models, but it seems to only be coming with the faster and more luxurious European cars (Dealer.com, vAuto, iMagicLab). As the Big 3 (ADP, Arkona, and Rey Rey) keep trying to be the old guard they're just slowing the progress of the industry. I believe the day is coming where a DMS is just going to be a vault of information that nobody actually works out of, and other vendors will provide the user interface. This will all be done through data feeds...or "integration".
Please leave your comments and suggestions. Because I am far from an expert on data feeds and "integration" I will add your suggestions to this article.
In this article, I am making the assumption that your legal team has approved all your contracts and security clauses on sharing data.
The Biggest Deficiency in the Dealership
- Off Topic & Everything Else
- 4 Replies
Guest Posting by Dale Pollack
As of late, I’ve come to understand that the biggest deficiency in the dealership today is the lack of expertise in sourcing used vehicles. For years, dealerships have relied on a steady stream of trade-ins. Only a small percentage of dealers actually developed strong wholesale sourcing competencies. Sure, most dealerships knew how to send their used car manager to the auction now and then to pick up a few cars here and there, but that’s a far cry from having true wholesale proficiency.
I’m particularly struck by the lack of developed talent and process around the wholesale sourcing of used vehicles at some really large dealerships and enterprise groups. In fact, it is these dealerships that have the greatest deficiencies. Really large stores and enterprises historically needed wholesale sourcing competency the least because they had the most trade-ins.
I’m still not prepared to declare a “shortage” of used cars, because I believe that this term engenders the notion of a crises, and crises often evoke irrational responses. To be sure, there is not presently a shortage of used cars, but they are getting harder to find for reasonable prices. I think that it is incumbent on every dealership to assess its wholesale sourcing competency as we move through a year that will have a tightening supply of used vehicles.
The wholesale sourcing position does not need to be staffed by a full-time employee, as it can often be handled by a local wholesaler. Regardless, however, whether you use a wholesaler or full-time employee, there needs to be a lot of thought around how they are compensated and the criteria that they use to decide what to purchase and how much to pay.
I would strongly urge you to think about compensating such individuals not based on how many cars they buy, but rather on how quickly the cars they buy turn. This keeps your buyers focused on purchasing the right vehicles at the right price. Everyone should remember that it’s better to be light and right in inventory than long and wrong even in today’s used car wholesale marketplace.
About the Author: Dale Pollak's career in the automotive industry has spanned more than two decades. He is the author of Velocity
and founder of vAuto. Be sure to subscribe and read his blog DalePollack.com.
As of late, I’ve come to understand that the biggest deficiency in the dealership today is the lack of expertise in sourcing used vehicles. For years, dealerships have relied on a steady stream of trade-ins. Only a small percentage of dealers actually developed strong wholesale sourcing competencies. Sure, most dealerships knew how to send their used car manager to the auction now and then to pick up a few cars here and there, but that’s a far cry from having true wholesale proficiency.
I’m particularly struck by the lack of developed talent and process around the wholesale sourcing of used vehicles at some really large dealerships and enterprise groups. In fact, it is these dealerships that have the greatest deficiencies. Really large stores and enterprises historically needed wholesale sourcing competency the least because they had the most trade-ins.
I’m still not prepared to declare a “shortage” of used cars, because I believe that this term engenders the notion of a crises, and crises often evoke irrational responses. To be sure, there is not presently a shortage of used cars, but they are getting harder to find for reasonable prices. I think that it is incumbent on every dealership to assess its wholesale sourcing competency as we move through a year that will have a tightening supply of used vehicles.
The wholesale sourcing position does not need to be staffed by a full-time employee, as it can often be handled by a local wholesaler. Regardless, however, whether you use a wholesaler or full-time employee, there needs to be a lot of thought around how they are compensated and the criteria that they use to decide what to purchase and how much to pay.
I would strongly urge you to think about compensating such individuals not based on how many cars they buy, but rather on how quickly the cars they buy turn. This keeps your buyers focused on purchasing the right vehicles at the right price. Everyone should remember that it’s better to be light and right in inventory than long and wrong even in today’s used car wholesale marketplace.
About the Author: Dale Pollak's career in the automotive industry has spanned more than two decades. He is the author of Velocity
and founder of vAuto. Be sure to subscribe and read his blog DalePollack.com.