The Automotive industry finds itself today faced with serious challenges. Competition in the marketplace has never been tougher. There are new products coming to market every month. The price of gas, and the debate around alternative fuels has added complexity to an already complex landscape. Brand loyalty is at an all time low. To top it off, all this is happening in an uncertain economic climate. It has never been more important to run an efficient business than it is today.
One critical resource we need to optimize is information technology. Like most manufacturers, you and your dealers have made significant technology investments in the past. A business strategy that makes sense in uncertain economic times like these is concentrating on getting the most value from investments you and your dealers have already made, by focusing your efforts on savings through increased efficiency. It also means optimizing your current investment in IT. The organization we know today as Standards for Technology in Automotive Retail (STAR) was incorporated in 2001, but actually it began much earlier when a group of automotive manufacturers got together to discuss how they could collaborate to reduce the cost of Information Technology for their dealers.
STAR has worked diligently over the past seven years to develop standards for technology in the automotive industry designed to help dealers and manufacturers accomplish just this goal. Here's how you, as a OEM, can benefit from this work.
A common mechanism for exchanging data with your dealers:
One main area of focus for STAR has been helping manufacturers and dealers establish a standard way of exchanging business transaction data (parts orders, warranty claims, retail deliveries, etc.) between themselves, with systems vendors, and occasionally even customers.
In the past each OEM required their dealers to have a proprietary or custom solution to transfer this data that was expensive, slow, and less secure. Multi-franchise dealers often had several different methods to perform this data transfer, which doubled and even tripled the cost, without improving the quality or performance of data transfer.
The introduction of the Internet as a secure means to transfer business information, together with steep price reductions in the cost of broadband Internet service from national carriers created the perfect opportunity to optimize the cost of data communications for dealers, manufacturers and vendors alike. All that was needed to make this happen were standards governing the use of this new resource. This is where STAR has made significant contributions on the industry's behalf. By developing open standards and guidelines for the use of this resource, and encouraging all automotive manufacturers and retail systems providers (RSPs) to adopt these standards STAR has helped dealers and manufacturers to realize the some significant benefits. They include:
Provides a robust, secure method of exchanging key operational business information. This will improve the accuracy and efficiency of processing routine business transactions (parts orders, warranty claims, etc.) for both dealers and manufacturers.
Provide an efficient and reliable way for the OEM to receive the operational planning information they need (parts movement and capacity, service capacity, etc.) to accurately plan the growth in dealer networks, parts distribution centers, and the like.
The standards provide the OEM with a common, known web development environment in every dealership that uses the same technologies used by the OEM in their corporate systems. This results in better utilization of finite IT development resources.
The dealer IT infrastructure uses the same technology used by the OEM in their corporate systems. This allows the OEM to leverage the knowledge and skill of their internal IT staff to assist dealers in planning or expanding their IT infrastructure.
Corporate volume discounts for IT hardware and software negotiated by the OEM from their vendors could be provided to dealers to save them money in establishing the needed infrastructure.
The simplified, common technical environment at the dealership will result in reduced support costs for both dealers and OEMs. Anticipates emerging technologies and will enable them. This will create new opportunities for improved customer service and profit at reduced start up cost. Establishes a strong and reliable communication channel for the dealer to their customers.
Fully automate business transactions:
A key area for significant and recurring savings for dealer and manufacturer alike is automating the transfer of business information from the dealer's Dealer Management System (DMS) to the OEM and back again.
This is where the promise of automation can truly be fulfilled. In order for the dealer or the manufacturer to run their business effectively they require information from the other party. In too many cases today, this information is being collected and provided manually by your staff. Or worse, it is coming from one computer, the dealer's DMS system, and is being "re-keyed" into the OEM's systems. This is not only a poor use of your people's time, it exposes the dealer to "re-keying" errors, which take time and manpower to correct, and may embarrass the dealer to their customer.
The same is true when the OEM sends business transaction data from their computers to the dealer. Without automated interfaces, the dealer's staff will have to enter, post, or process this information manually, when their DMS system is better equipped to handle this task. The OEM and Dealer System Provider (DSP) members of STAR have worked diligently to develop standard data formats for the most common business transactions exchanged between dealers and OEMs. The DSPs have developed the required software to build these transactions from data within the DMS system and the OEMs have developed the software to process them at their end. So these business transactions are processed without human intervention. This was the promise of automation, to simplify and improve our lives. By using the common data interchange standards OEMs and dealers can expect to realize the following benefits:
Business transactions are handled computer to computer, without manual intervention in most cases. The resulting manpower savings can be put to better use within the dealership, either saving cost elsewhere, or generating profit for their business. (note: studies have shown this time savings can range from 10 to 15 hours per week for a small dealer, to 40 to 50 hours per week for a large dealer)
In some cases the automated interfaces replace manual processes and the "mailing" of documents from the OEM to dealers, which saves manpower and mailing cost for the OEM.
Since the standards are already in place for many key business transactions, the development time to realize them is reduced, saving money for the OEM and dealer. As the standards are the product of the requirements of all OEMs that participate in their development, they provide the OEM with knowledge of the ideas and processes that other OEMs are using in their business. It provides the basis for knowledge-sharing.
Provides the ability for "real-time" transaction processing. This translates into faster service from the OEM, or vendor, helping the dealer deliver better service to their customer. It also gives both the dealer and OEM a more current snapshot of information which can be important to decision-making in many situations.
The STAR "validation" environment allows the OEMs to test and certify the interfaces before they are deployed to the field. This reduces the risk of errors in the field.
Open Standards provide freedom of choice:
One final, unanticipated benefit that dealers and OEMs can expect from acceptance and use of these standards in their business is more freedom of choice when choosing retail system providers.
Since most of the major retail system providers subscribe to STAR standards, dealers can more easily migrate from one provider to another, knowing that the dealer infrastructure for the most part will remain intact and not require additional investment, and that the data interfaces provided by the OEM will be available on other retail provider systems as well. So the dealer will not lose the benefits of this automation by changing vendors, if that decision is in the best interest of their dealership.
It has always been true that an open and competitive marketplace is best for all parties concerned. The dealer will have freedom of choice when considering systems and the vendors will have a common platform on which to build their systems. They can then compete in the market based on who has the best system, for the best value.
What you can do:
From this overview, I hope you'll agree that the work of STAR is benefiting dealers and OEMs alike. If you want to support this work, there are some things you can do to help. Make a commitment to support the STAR Infrastructure and data exchange standards. Join STAR and get involved in the development of new standards that will get still more value from the IT investment you and your dealers have made.
Make sure that the retail systems providers you work with, and in fact all of the IT vendors used by you and your dealers, support and embrace STAR standards in their products. This sends a clear signal to your dealers and vendors that you want to capitalize on efficiency by using these standards During challenging economic times like these, we must do whatever is possible to get the most benefit from the investments we have already made before setting off in search of new profit opportunities.
A significant benefit of STAR membership for you to consider:
One additional benefit of STAR membership to you, as an OEM, is the ability to meet and network with a broad range of IT professionals from complimentary and competing companies.
Through your direct contact with DSP and RSP IT professionals you can be apprised of their plans and challenges. This will afford you ample opportunity to include this "business intelligence" into your dealer systems development plans.
You will also have access to technical professionals from other OEMs and even competitor companies. Since the spirit of STAR meetings and work groups is sharing of technology ideas, these exchanges of information can prove extremely valuable in identifying and avoiding problems experienced by other OEMs and competitors working on similar projects. This can easily save your company many times the cost of STAR membership.