Is it Time to Evaluate Your DMS? Ask These 10 Questions


Should I stay or should I go?

Every three to five years, you should sit down and evaluate your DMS. Based on this evaluation, you will either decide to stick with your provider, or you will start laying down the building blocks to make a necessary change.

After all, depending on the size of your business, it can take three years to get all the pieces in place to switch to a new system. Whether or not to switch systems is not an easy decision to make. That’s why you should come to your meetings with DMS providers equipped with these key questions to help you determine if your current provider is the best fit, or if it may be time to upgrade.

1. Is your DMS provider in it for the long haul?

You want your business system provider to be stable and reliable. But in a market where consolidation keeps changing the landscape, that isn’t always a guarantee.

With today’s tendency to bring in venture capitalist money, investment, money, publicly traded companies, and the growing size and footprint required by a DMS dealer to serve their customers, is the DMS provider just somebody’s investment or is it their commitment?

2. Have they got a proven track record in our industry, and do they know what it takes?

In order for your DMS to support your business in the now and in the future, it needs to balance two things: a stable, legacy system that you can rely on, and new innovative solutions that will support your dealership’s success in a changing market.

When assessing your current provider, no doubt you find yourself returning to the question: what have they done for me lately?

It’s a fair question.

Do they have something new to offer you in the last year? Or are they selling the same product that they’ve had for 10 years?

If they’re not adding anything new, it’s probably because their goal is not to be in it for the long haul and in that case, they’re just relying on their track record. But if they’ve got a proven track record with a system that works, plus a steady release of new products, they are demonstrating a long-term commitment to their customers.

3. Do they have support that understands equipment dealers and speaks your language?

Your DMS provider should understand the ups and downs of your business and the intricacies of what you have to do.

There are a few facets to this:

First, you need a provider who understands what goes into running a dealership. Not only that, but they should understand what it takes to run a dealership at whatever stage your business finds itself. Are you a single-point dealer or do you have ten locations? Your DMS provider should know how to support your operations.

Second, you should be able to talk on the phone or face-to-face with someone at the company. This person should understand your questions and communication should flow easily.

4. Is your provider focused on your bottom line and your success or their share price and their quarterly profit report to shareholders?

Of course, any company needs to answer to its shareholders. But that shouldn’t be what drives their every dealing with you. Ideally, your DMS provider should have the capital to invest in the support people and big enough servers to support scaling businesses. But beyond that, your provider’s focus should be on supporting the success of your dealership.

5. Is your DMS provider large enough to manage the capital investment required to stay current in our industry and successfully launch the new products you need?

Do they have enough capital to be able to continue the investment in an up or down cycle? Are they responding to changes in the market with solutions to help your dealership meet them? Are they talking to you and your peers to get insight into what you need to solve any challenges you’re facing?

You shouldn’t be worrying about the stability of your DMS provider.

6. Are they small enough to be completely dedicated to our industry?

There’s a sweet spot when it comes to the size of a business you’re dealing with. Are they big enough to be able to invest in newer technologies and have the personnel and products that you need, yet small enough to be nimble?

Choosing a provider that employs real dealership industry talent will help ensure that you work with people who care about the welfare of your business.

7. Does your supplier have the pedigree and experience in our industry to partner with you for the long term?

Do you want to have to explain to your DMS provider how a dealership works? Of course not.

That’s why you should seek reassurance that the people working for your provider have actually stepped foot in a dealership. Do they know what a combine or a cotton picker looks like?

You can save your team a lot of future headaches by making sure your DMS provider speaks dealer. Because if they do, that will be reflected in the products and solutions they provide.

Are they focused on the products that are going to benefit you and provide you with what you need to run your business effectively now and in the future?

8. Does the system earn its keep without penalizing your cash flow?

Every change you make in your business has got to come down to this: is it increasing gross sales, increasing margin, or decreasing expenses? That means every investment you make in your DMS products should have a measurable, positive impact on your business.

Are they making things for the sake of making things, or are they making things that make you money?
So what does it make you more money or make you more efficient and therefore make you more money?

9. Is your DMS provider truly a partner?

Not just in business, but in all things related to your business. A true partnership isn’t in the name—it’s in its spirit, fairness, equity, and consideration. There should be mutual trust in your best interests.

Does your partner put constraints on what you can or can’t say about them? A partner won’t tell you that you can’t have an opinion. Do they try to control the narrative, or do they let their relationships speak for themselves?

10. Can you afford to “wait and see” how things play out?

Every three to five years, you should evaluate your dealership’s business management system. That doesn’t mean just taking 20 minutes to reflect. You need to take a good hard look at how your system is working for your business. You need to pull users, and manufacturers, and look at interfaces. You need to ask, are we maximizing or optimizing these tools?

Then, based on that, you need to make a decision: do you see sufficient benefit with your current system to wait it out? Or do you decide to invest in a new system?

The problem is, “wait and see” isn’t a plan at all. It’s a hope that you come out the other side. In a market with so many ups and downs, you may find yourself in a downturn, unable to wait any longer.