毕博咨询报告－Driving Change in the dealer IT Enviorment.pdf

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1、White Paper: AUTOMOTIVE AND TRANSPORTATION DRIVINGCHANGE IN THE DEALERIT ENVIRONMENT WHITEPAPER1 IN THIS WHITE PAPER: 1. Executive Summary 2. Seamless Integration: Linking Vehicle Manufacturers with Dealer Communities 3. The Cost-Driven DSP Support Model Dealership Environment Dealership Installatio

2、n Ongoing Support Economic Model Pricing Models 4. Addressing the Challenges of DSPs: Six Strategies for Vehicle Manufacturers Strategy 1: Leverage the Internet Strategy 2: Drive the Change Strategy 3: Defi ne and Execute a Road Map Strategy 4: Drive Standards Strategy 5: Reengineer Dealer Communica

3、tion Systems Strategy 6: Focus on Revenue 5. Conclusion: Establishing a Clear Path of Value DRIVINGCHANGE IN THE DEALERIT ENVIRONMENT DRIVINGCHANGE IN THE DEALERIT ENVIRONMENT 2BEARINGPOINT Executive Summary In todays automotive industry, vehicle manufac- turers must continually identify new opportu

4、nities for efficiency improvement and cost takeout to maintain their competitive advantages. Currently, some manufacturers seek to extend the makeup of the enterprise so that they can share information and applications with dealers in real time as well as provide new products and services electronic

5、ally. By making innovative connections with dealers, they expect to achieve more accurate planning, faster responses to market shifts, signifi cant cost savings and increased sales. To realize these benefi ts, however, vehicle manufacturers fi rst need to develop strategies for addressing the challe

6、nges posed by the dealer service/systems providers (DSPs) that control todays dealer information technology (IT) environment. In the following discussion, we provide vehicle manufacturers with insights that they can leverage to begin addressing these challenges. We begin with an overview of the syst

7、ems that dealers use for everyday operations, describing both the need for integration and the market dynamics that make this integration difficult to achieve. Next, we discuss the important role played by DSPs in todays dealer IT environment and offer specifi c information about the DSP business mo

8、del. Finally, we outline potential strategies that vehicle manufacturers can use to collaborate with or work around DSPs in leveraging new technologies and building more productive relationships with automotive dealers. Seamless Integration: Linking Vehicle Manufacturers with Dealer Communities A fe

9、w well-established DSPs currently supply the majority of automotive dealers with turnkey IT systemsalong with the associated services and supportthat have become essential to effective day-to-day business operations. Known as dealer management systems, these systems enable the effi- cient performanc

10、e of back- and front-office tasks such as inventory management, sales and service management, fi nancing, accounting and human resources management. See Figure 1. In addition to purchasing dealer management systems, dealers must pay the cost of operating and maintaining dealer communication systems,

11、 which are the sophisticated applications that most vehicle manufacturers have already developed and deployed. These manufacturer-mandated systems support critical functions such as parts ordering and warranty claims processing and form an integral part of dealers day-to-day operations. INVENTORY MA

12、NAGEMENT SALES AND SERVICE FINANCING ACCOUNTING HUMAN RESOURCE MANAGEMENT FIGURE 1. COMPONENTS OF A DEALER MANAGEMENT SYSTEM DRIVINGCHANGE IN THE DEALERIT ENVIRONMENT WHITEPAPER3 Most vehicle manufacturers have developed, for specifi c situations, strategies for coping with this lack of integration.

13、 However, continuous, seamless integration between dealer management systems and dealer communication systems has yet to be achieved. This situation results in process inefficien- cies for dealers, DSPs and vehicle manufacturers alike and results in rising maintenance costs for dealers. It also leav

14、es vehicle manufacturers without real-time views into their sales channels. In addi- tion, dealers continue to struggle with the multiple entries required from dealer communication systems to dealer management systems. This chal- lenge is particularly troublesome for multi-brand dealers that must en

15、ter the same information three or four times to support the manufacturer, the dealer and, in some cases, the dealers parent business unit. Automated processes, rapid transactions and tight integration between dealer communication and management systems will be achieved only if manufacturers adapt to

16、 or create change within the preexisting IT systems currently being supplied by DSPs. However, reforming todays dealer IT environment is a signifi cant challenge. Although profit potential exists in the development of customized extended applications and increased collaboration with vehicle manufact

17、urers, DSPs believe that these advances could cannibalize exist- ing market share and open the door to greater manufacturer control and competition, thus under- mining the viability of the DSP business model. Nonetheless, there are several strategies, discussed later, that vehicle manufacturers can

18、pursue to address the challenges posed by DSPs. MANUFACTURER DEALER INFRASTRUCTURE BUSINESS APPLICATIONS AND SERVICES Dealer Communication Systems Dealer Management Systems FIGURE 2. INEFFICIENT BATCH METHOD OF DATA EXCHANGE As a result of all these components, dealers incur substantial costs in ope

19、rating these systems. For example, dealer communication and management systems each require expensive in-dealer hardware to power the various functions. The IT cost to manage both systems can average approximately 0.6 percent of revenues for a typical dealer group or add approximately $100 per vehic

20、le. From the perspective of vehicle manufacturers, however, the greatest challenge posed by DSPs is that an integration capability is not being built into the dealer management systems they provide. Because DSPs retain and attract dealer clients chiefl y through cost-driven strategies that fail to r

21、eward innovation, they have little incentive to create a common data model across applications and order-management systems. As a result, external integration between dealer management and communication systems has become virtually impossible to achieve at a low cost. This situation, in turn, preven

22、ts vehicle manufacturers from realizing the full benefi ts of more effectively collaborating, exchanging information and sharing applications with their dealer communities. See Figure 2. The unique reporting and integration require- ments of each vehicle manufacturer franchise with which the dealer

23、is affiliated. Any multi-franchise business locations and reporting structures. Hosting as part of system architectures that can vary widely in age, capacity and load. Integration between each of the dealers own business units/locations. Potentially numerous integration points with vehicle manufactu

24、rer and third-party applications. Dealership Installation The introduction of new software and solutions usually requires that DSP fi eld-support staff visit the dealership to perform the installation. The installation can involve new hardware and a unique custom configuration required by the dealer

25、s IT architecture as well as testing of the new product for compatibility and performance. In addition, varying amounts of training and instruction may be required. Also, due to the heavy demands of the dealer retail environment, new products often must be installed after business hours. All of thes

26、e variables serve to drive up support costs. Ongoing Support The mission-criticality of automotive dealer IT means that DSPs must offer highly available support services. The ratio of support resources to customers is much lower, however, than would be the case with software support companies servin

27、g other industriesa situation that results in higher costs for both DSPs and their customers. The major DSPs have each introduced ASP-based solutions, but these solutions have not been widely adopted, DRIVINGCHANGE IN THE DEALERIT ENVIRONMENT 4BEARINGPOINT External integration between dealer manage-

28、 ment and communication systems has become virtually impossible to achieve at a low cost. This situation, in turn, prevents vehicle manufacturers from realizing the full benefi ts of more effectively collaborating, exchanging information and sharing applications with their dealer communities. The Co

29、st-Driven DSP Support Model Unlike organizations in most other industries, auto- motive dealers rely on very small internal IT staffs to run their businesses. Dealers require a different level and type of support that generally exceeds IT support provided in other industries. This results in compara

30、tively high support costs, so dealers rely heavily on DSPs for their IT assistance. The majority of dealership IT support is centered on responding to user errors rather than to technical issues. Because dealer personnel typically are not savvy computer users, they often require a level of support h

31、igher than that required even by average computer users. Dealership Environment The demanding nature of the automotive retail environment requires rock-solid performance from supporting IT systems. If these mission-critical systems fail, every department of the dealership can be frozen in a profi t-

32、draining lockdown. Despite the relatively limited options available to dealers choosing a dealer management system, each dealers IT implementation will be unique. For example, the dealers IT system must be compatible with: largely because they fail to signifi cantly lower user-error support demands.

33、 As in any modern IT support organization, there are multiple layers of support in dealer systems, ranging from user manuals and online documenta- tion to phone staff and fi eld staff. Increasingly, the major line of support for a dealer management system comprises remote, phone-based support profes

34、sionals who can dial in to the dealers system to diagnose and sometimes remotely fi x software and confi guration problems. Again, the majority of these calls typically concern user errors as opposed to technical ones. One of the major trends driving the convergence of dealer communication and manag

35、ement systems is the use of Web-based applications to help reduce these on-site service fees. To this end, dealer-driven portals can remove expensive server hardware in the dealership. The dealer needs minimal hardware, such as personal PCs and a high-speed Internet connection, and all software can

36、be centrally hosted and supported, which can greatly simplify mainte- nance and upgrade processes. Economic Model Given the shrinking population of the current base of 22,000 new-car dealers in the United States, the opportunity to spread out support costs is dimin- ishing. Assuming that dealers mai

37、nly purchase additional applications from their DSPs, and factoring out smaller dealers, the expected market for a very successful dealer IT product is only about 5,000 unitsa relatively small customer base across which to share research/development and support costs. Given the lengthy sales cycles

38、for most products, DSPs often do not project returns until three to fi ve years after introduction. DSPs allocate support resources based on the requirements they project for each product as it is introduced/upgraded. When support resources are stretched thin, customer satisfaction typically drops p

39、recipitously. To keep customers happy, DSPs may need to allocate large support resources to new products, thus driving early customer acceptance and satisfaction. As the product matures, support resources can ebb with demand to the point of diminishing returns (i.e., when additional resource investm

40、ent would generate only minimal customer- satisfaction returns). Of course, due to the multi- tasking responsibilities of the support organization, this shift can be more of an accounting formality than an actual resource allocation; however, large support campaigns, such as new-product introduc- ti

41、ons, must be clearly tracked and accounted for. The price point for support is based on the projected utilization of the support resource. A profi t margin is built into the price, and expenses are factored into the business model of each DSP product set. As a rule, effective product strategy means

42、keeping support costs to a minimum. The need for low support costs, however, can result in increased research and development resources being expended, which can drive up overall product costs. For example, extensive testing of unique dealer management system confi gurations will drive up DRIVINGCHA

43、NGE IN THE DEALERIT ENVIRONMENT WHITEPAPER5 Dealer-driven portals can remove expensive server hardware in the dealership. The dealer needs minimal hardware, such as personal PCs and a high-speed Internet connection, and all software can be centrally hosted and supported, which can greatly simplify m

44、aintenance and upgrade processes. DRIVINGCHANGE IN THE DEALERIT ENVIRONMENT 6BEARINGPOINT Pricing Models Pricing models are fairly consistent across DSPs, with fees divided between hardware and software. DSPs typically include fees in the following categories: One-time, up-front fees. Monthly softwa

45、re licensing fees (often catego- rized as “support fees” in other IT models). Monthly support fees. Some products also include transaction-based pricing. In addition, there are other classes of fees tied to hardware and the number of users and locations. While the use of monthly software licensing f

46、ees represents a break with IT industry norms, these fees do include, among other things, the research and development costs that result from the need to regu- larly update systems to meet vehicle manufacturer- specifi ed reporting requirements. Figure 3 shows two examples of DSP product pricing str

47、uctures. FIGURE 3. EXAMPLES OF DSP PRODUCT PRICING STRUCTURES UP-FRONTMONTHLYSOFTWARETOTALSUPPORT-SUPPORT AND COSTSSOFTWARE SUPPORTANNUALSPECIFICLICENSING LICENSING(PER LOCATION)COSTPERCENTAGEPERCENTAGE Accounting$2,500$200$35$5,3207.89%53% (General Ledger) Parts Inventory$1,875$150$26$3,9907.89%53%

48、 the research and development costs of the new product but ultimately lower support costs. The challenge for DSPs is to correctly project the point of diminishing returns. Although support can constitute a manageable revenue center for DSPs, support-intensive prod- ucts tend to create dissatisfi ed

49、dealer customers. Consequently, a critical question for DSPs is this: How much are dealers willing to pay to avoid support-intensive products? The apparent answer, however, usually is “not enough to cover the even- tual cost of support.” This situation, in turn, motivates DSPs to price support fees and software licensing separately. Because dealers understand that software updates are needed to keep their systems compatible with vehicle manufacturer requirements, they perceive value in paying for software licensing, while seeing the need for support as a failure o