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. It has never been more important for dealers to run their business efficiently than it is today.
This difficulty of course carries over to the suppliers of goods and services to automotive dealers, namely the retail system providers (RSPs). The RSPs today are asked to find ways to help their customers leverage their investment in technology to achieve great efficiency.
At the same time, the RSPs must find ways to improve their efficiency in a technical environment that is growing more complex, to maintain their profitability. 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 retail systems provider can assist and benefit from this work.
A common, standard IT infrastructure:
One main area of focus for STAR is helping dealers establish a common, standard way of exchanging business transaction data (parts orders, warranty claims, retail deliveries, Internet sales leads, etc.) with their manufacturers, vendors, and even customers.
In the past dealers were required by OEM and vendors to have a proprietary or custom solution to transfer this data that was expensive, slower, 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 dealer, 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 dealer's behalf. By developing open standards and guidelines for the use of this resource, and encouraging all automotive manufacturers to adopt these standards STAR has helped RSPs to realize the following benefits:
Reduced the diversity and complexity of the IT environment of dealer systems. This has reduced the technologies that the RSPs have had to support in years past, and simplified the development and testing of new systems as there are fewer technologies to consider and certify.
The robust, broadband internet connectivity to dealers is a cheaper means of establishing secure connectivity between the RSP and their customers, and makes superior remote-support technologies cost-effective for the first time. This reduces RSP support cost by minimizing the need for expensive on-site support resources in many cases.
Reduced cost of selling into new accounts, as often times much of the infrastructure needed is already in place. This can be an important factor for many dealers as it helps overcome the cost to change to a new RSP. Additionally, the standard operating environment can also reduce the risk of conversion from old system to new.
Standardized data exchange between dealer and OEM:
Dealers are looking for improvement in operating efficiency through their investment in information technology. They can realize substantial improvements in efficiency and accuracy through automating the information exchange between the dealer and their OEM.
However, there are benefits to be gained by the retail systems providers in using the STAR data interchange formats. They include:
Optimizing the use of your precious, finite development resources. It takes fewer resources to implement an interface for an OEM when you are starting out with the basic STAR framework. And while each OEM has their specific needs for the interface, this has been foreseen and accommodated in the STAR interface designs. Spending less time to deliver the industry standard interface, means your development staff have more time to enhance your product, thereby strengthening your value proposition, or working on the OEM development backlog, which is profitable work for the RSP.
Reducing support requirements. Using the STAR standard format rather than 20 proprietary formats to accomplish the same data transfer must result in a savings of not only the developer's time, but the RSP's support resources as well, which directly translated into time and dollar savings for the RSP.
Opens up new sales opportunities. By having a product in the market that supports the industry standard interfaces, you remove a barrier to purchase by dealers needing those very interfaces. It also helps your product offer an attractive value proposition to the dealer. It then becomes a solution designed to optimize their investment in IT and produce manpower efficiency and savings.
Your active involvement in STAR and the enhancement of existing and creation of new standards provide your company with the opportunity to craft the standard so that it complements the best features of your product, setting it apart from the competition. The better your system's integration with the DMS and OEM systems, the more attractive and the better value it will appear to dealers.
What you can do:
If you agree that the work of STAR is benefiting not only dealers but RSPs as well, and you want to support this work, there are some things that you can do to help. Make a commitment like some forward thinking RSPs have done to standardize all development interfaces on STAR standards, where they exist.
Where they do not exist, become part of the solution. Join STAR and help create the interfaces in an industry standard from the beginning.
Additionally, tell the OEM and DSP partners that you understand and value strong and deep computer to computer integration through STAR standard interfaces. If the OEM has not developed all these interfaces for the dealer's franchise, ask them to make the commitment to develop them.
During challenging economic times like these, dealers need to do whatever is possible to get the most benefit from the investments they have already made before setting off in search of new profit opportunities. You as an RSP are one important component in helping dealers get more efficiency from their technology investments.
A significant benefit of STAR membership for you to consider:
One additional benefit of STAR membership to you, as a retail systems provider, is the ability to meet and network with a broad range of IT professionals from complimentary and competing companies.
Through your direct contact with OEM IT professionals you can be apprised of their plans and challenges. This will afford you ample opportunity to include this "business intelligence" into your product development plans.
You will also have access to technical professionals from 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 competitors working on similar projects. This can easily save your company many times the cost of STAR membership.