Leveraging Technology to Modernize your Dealership

(Originally published in the September 2017 issue of CED Magazine)

Equipment dealers in today’s world must find ways to stay competitive. Technology is advancing rapidly, and the most successful and profitable companies are harnessing modern technology to stay ahead of the competition. Off-Highway Research is projecting equipment sales in North America to rise 6% in 2017, and a further 9% by 2018. By 2020, sales of equipment are expected to reach $89.3 billion worldwide.  Are you confident in your dealerships ability to grow and adapt to ensure you’re maximizing your market share?

Modern technology has changed the way that companies do business. Everyone from small, single store operations to publicly held companies with thousands of employees are utilizing ERP (Enterprise Resource Planning) software to increase efficiency and profitability. An ERP can be seen as the next step in the evolution of dealer management systems. It seamlessly integrates every department in a single platform, and updates information in real time. These systems usually have features such as CRM, fully mobile applications, business analytics, RFID scanning, IoT, telematics and more integrated into the system.  The fastest growing companies are utilizing true cloud environments to perform activities from anywhere, anytime and on any device.  In the digital world we live in today, customers have more options than ever before. For equipment dealers, customer service and satisfaction is key to forming solid relationships that will keep your business profitable. Improved customer experiences can set your dealership apart, helping you to foster customer partnerships that will last decades. These strong customer relationships represent sustainable revenue.

Along with improving the customer experience, it is vital to minimize operating costs to stay profitable. In the equipment distribution industry, margins are slim. Dealers must increase efficiency to stay competitive. The best run companies have learned to harness technology to improve efficiency at every level of business, allowing them to do more with less. The foundation of this is the companies’ dealer management system. Unfortunately, many equipment dealers still use outdated Legacy business systems, or in some cases are even running their business on spreadsheets. These legacy systems do not allow flexibility, meaning they force you to run your business in ways that may not be conducive to efficiency or profitability. Most do not integrate with the newest technological advances. It is very difficult and time consuming to make improvements to these legacy systems, and there are very few programmers left who know legacy programming language such as COBOL.

To maximize efficiency it is vital that your ERP system has the capabilities to integrate every aspect of your business, including your Sales, Parts, Rentals, Service, Finance and Accounting. Along with seamless integration it is important to have robust reporting capabilities which give key decision makers visibility across your entire organization. Modern technology has allowed for more automation of processes, which reduce expenses, time, and the chance of human error. If implemented and utilized correctly, your dealer management system can facilitate improved efficiency and visibility, resulting in reduced operating costs at every level of business.

Improve Decision Making and Tighten Controls

Senior executives can anticipate challenges and ensure their business is positioned for success by utilizing all of the capabilities that modern technology has to offer.  The reporting capabilities of legacy solutions hinder the decision making abilities of management. In many cases, management has to request that reports be generated in order to see key business information, sometimes only getting these reports once or twice a month. In many cases different departments of a dealership are running on different software solutions, which just makes it more difficult for management to get the information that they need. A modern ERP system seamlessly integrates all departments and updates information in real-time. This provides your companies’ key decision makers with the information they need in real-time, allowing them be proactive in identifying potential problem areas or new business opportunities.

Data can only be a driver for business improvement if it is made available to the correct people in a timely manner. Information must also be in presented in a way that is useful for the end user. Some modern ERP systems have powerful reporting capabilities such as personalized dashboards which help dealerships turn data into action. Sophisticated solutions allow you to personalize dashboards by role or even by individual user to ensure that all relevant data points are easily available. Intuitive graphical dashboards can display critical information, and map & model the data in a structured format. Key decision makers will be able to see KPI’s (Key Performance Indicators) specific to their department. For example, a service manager would need to see data such as orders ready to invoice, WIP, Labor Efficiency, Productivity, and Warranty Claims. A CEO or President would need to be kept up to date on KPI’s across all departments. Selecting the right modern ERP solution allows you to personalize dashboards according to the user’s needs, ensuring you have all the information you need at your fingertips each time you log on to your computer or smart phone.

What gets measured can be improved. Your solution should allow you to compare overall business performance against your own historic performance and against your industry peers. Some solutions can utilize AED CODB (Cost of Doing Business) reports and other industry metrics which helps to quickly identify areas of potential improvement. Your system should also have the capability to alert you when you have reached specific thresholds. For example, when your Accounts Receivable numbers hit X amount of dollars, management needs to be alerted of this so that they can contact the finance department to see where the issue lies and take steps to resolve the problem.

A modern solution helps management to establish industry best practices across their entire enterprise. It is vital that the plans you make in the boardroom are actually executed on the shop floor. Some modern ERP systems with a focus on equipment dealers have developed a repository of Equipment Dealer Best Practices from years of experience working with dealers. These should be integrated into the core ERP system. Systems with these capabilities allow you to align your operations with your business strategies. A complete ERP solution empowers dealerships to better leverage the capabilities of the business system and support learning within the organization. Your system should also have the flexibility to tailor these processes to fit the specific needs of your dealership. Interactive flowcharts can be followed step-by-step, helping with training new employees, existing employees, or even temporary employees. The system should give a notification when any task is not completed correctly, or certain thresholds have been crossed. This virtually eliminates the chance of human error, saving your organization valuable time and money. This tool will also help to speed up implementation, lowering your Total Cost of Ownership. The utilization of a tool such as this guarantees that tasks throughout each department are done efficiently and correctly, reducing operational costs at every step.  This can also help with compliance certifications such as ISO, Six Sigma, SOX and more.

Empowering Employees in the Office and in the Field

Most equipment dealers report their service and parts departments as having the highest profit margins, yet these are some of the areas that can still benefit most from modern technology. Many dealerships are still using whiteboards to schedule technicians. Service managers report that their technicians spend hours and hours each week writing reports which cuts in to your billable tech time. Technologically advanced service departments have become virtually paperless, resulting in increased efficiency and service revenue.

A modern ERP solution can integrate with mobile Field Service software to enhance technician efficiency. Utilizing a modern ERP system, the service manager would create a work order and assign it to a technician. Some advanced ERP systems allow you to assign jobs to technicians based on skill level and proximity. They can also treat service trucks as warehouses, ensuring that you assign a technician that has the right parts and materials to complete the job. These capabilities greatly increase the First-Time Fix Ratio. The technician would receive a notification on their phone or computer, complete with customer information and the job description. Advanced solutions also have GPS integrations which provide directions to the job site.

If utilized correctly, the system should ensure that technicians have everything they need to complete the assignment when they arrive at the job site.  Some mobile field service solutions allow technicians to write service notes using voice to text capabilities, which reduces time filling out reports. This increases productivity and satisfaction, as technicians hate filling out reports. Technicians can take pictures and upload them directly to the work order. Once the job is complete technicians can get digital signatures from customers, reducing labor disputes and time to invoice. All of the notes, including pictures, that a technician takes from the field will be automatically updated into the ERP system. This drastically reduces the time technicians spend on reports and increases billable service tech time.

For your rental department, speed is essential. A modern ERP system provides seamless integration across departments, which helps you to get equipment in and out of the yard as fast as possible. As soon as a piece of equipment comes back in to the yard your system should allow you to scan the equipment using RFID scanning and immediately generate a service work order directly into the system. The service manager should notified of the work order via text or email so that he can assign it to a technician using the advanced scheduling capabilities of the system. Once that technician has completed the job the system will automatically update to show that the equipment is ready to rent again. This will update in real-time, allowing your sales staff to have an accurate view of the equipment available to rent. No more calling in to the yard just to see what equipment is available. This minimizes equipment downtime and maximizes rental revenue.

Your dealership management system should not be seen just as an IT cost, but as a revenue driving center for your business. An ideal solution should be built on modern, scalable technology which is flexible enough to meet the ever changing needs of equipment dealers. The best solutions are powerful and robust, yet intuitive and easy to understand and utilize. In technologically advanced and profitable dealerships, everyone from the CEO down to the service technicians utilize the power their ERP solutions to enhance productivity and make their lives easier. Modern technology shouldn’t be seen as a scary or arduous undertaking, but a necessary enhancement which increases the efficiency and satisfaction of your employees. Efficient and happy employees will usually result in improved customer service and relationships. A modern ERP system designed specifically for the equipment industry comes with a reduced risk and a lower total cost of ownership. In addition, the capabilities provided have been proven to represent a much higher return on investment.

Harnessing the Powers of IoT

IoT (Internet of Things) is already an integral part of the world today, and will only play a larger role in the years to come. Forward thinking companies are already utilizing IoT to get advanced predictive analytics from the IoT based software which is embedded in modern ERP systems. More and more equipment is being equipped with sensors, and some modern ERP solutions can be integrated with those sensors. Traditionally, maintenance and repair strategies have been built around a fixed-interval approach. With IoT integrated equipment, service and maintenance can be based on exhibited life factors, risk of failure, and statistical confidence. The system can analyze data input from technicians as well as data transmitted from wireless telematics systems. An examples of this would be fluid analysis including engine oil, hydraulic oil, transmission oil and coolant. Systems can continually monitor this data and send an alert when a machine is at risk of failure. This takes the guesswork out of the service department, reducing costs and equipment downtime and increasing customer satisfaction. This also helps in increasing service revenue.

These are just a few examples of ways that dealers can leverage modern technology to improve efficiency and performance. Many equipment dealerships have already started utilizing the capabilities of modern ERP solutions, although outdated legacy systems are still prevalent throughout the industry. The digital transformation of equipment dealerships is already well underway. If your system does not support these capabilities you are already falling behind the competition. The dealerships of the future are already here, and they are constantly striving to utilize technology in new ways to improve their operations. Failure to leverage technology to improve efficiency and the customer experience will leave some dealerships in the past.

 

By Geoff Pace and Henk de Man

 

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