Why is GM really getting into the DMS business?

[saturn01]

Quorum is GM certified on all integration points and approved for RIM

[JKcars]

OK, what is really going on here? We run a GM store, a Honda store, and several Saturn stores. Ever since NADA my dealer and I have been trying to figure out what all these annoucements from GM mean. At NADA we met with Reynolds and they showed us their new system. In essence it is exactly what we already have running in our Honda store - ERA. We really saw nothing new. In addition, they told us that the Saturn stores, the Chevy store and Honda could not operate on the same system (that's a real helpful approach). We had a bid from Reynolds for the Chevy store prior to NADA, following NADA they gave us a quote on this Idms and it was significantly more expensive then what we already had in hand. When we asked why, we were told because GM had negotiated the price and it was fixed, but we could buy the same thing without GM involved and it would be less. This is crazy! I am telling you, I wish GM would learn from Honda and others that they need to let us run our business and they need to focus more on running theirs. You would think that when they lose $10 billion someone would look around and say to themselves, why are we wasting money negotiating higher prices for our dealers when we could be focused on making better product?

Now my dealer is hearing at the Saturn Business Conference that we have to switch our Saturn stores. The system we have in Saturn works very well today and doesn't cost much. When we asked about the cost, we were told the new system will be slightly less then what we are paying today (in the range of a few hundred dollars per month), and the install fees will be $50-$60K. That is $120K for our stores to replace a system that works well in a time when we are trying to save every penny. They had the gall to tell us that over time it will cost less. How does that math work? I have to pay $120K and change systems which has a cost to my people, and productivity and they say it will cost less? This is what we are starting to refer to as GM fuzzy math. What gives? When we asked what more this will do, the answer is vague, something about CRM, etc. We already have CRM through Saturns suggested company - Cobalt. When will these corporate people learn that they are not retail experts! I don't try to do their job so why do they try and do ours?

We are trying to get all of our stores onto a single system. We could do that today but the EDS group doesn't do Honda very well so we have left that store off. Why doesn't Saturn just let me choose what system to use and then I can run my operations the way I want to?

[nccarsman]

I see that saturn01 seems to know alot about IDMS. GM RIM is not the last program where GM will integrate dealer data, right? I am sure that other programs in Sales and Service will be coming.

Since R&R and ADP are both on board with RIM, will IDMS change this in the future? I just can't see how ADP can't stay current when they have half of the dealers on their system.

[saturn01]

The IDMS price for Saturn does include an upfront cost that you can lease, the lease cost plus the monthly cost is slightly less than the total cost a Saturn store pays today, your Saturn Field representative can show examples of this.

The IDMS bid you got could be more than your current cost, IDMS includes almost all R&R packages and other cost not normally in the quote such as monthly LTG, Parts Master, GM integration WINS, Rapid, RIM,FACTS,
But on a comparison with all the same applications, services and costs included IDMS is less.

If you did not want all the items included in IDMS than buying direct for the IDMS vendor is available.

[saturn01]

Non IDMS vendors can continue to participate in GM's DMS interface certification program. GM will continue to publish integration specifications to the DMS vendors. The non IDMS DMS vendors choose when or if they will build the interface.

[JKcars]

Someone will have to do this math with me. $50-$60K upfront leased across 60 months (with no interest applied) is $1000 per month. So is my Saturn system going to be at least $1000 less per month? I believe we only pay about $2000 a month currently for the software (and it includes all the stuff we need like time guides, parts updates, service guides, factory integration, etc). This doesn't even consider what happens when my people who have used a system for 15 years have to learn a new one - can someone say chaos for 6-months. There is a cost to this as well it is just hard to put a dollar figure on it. I really am not against change, but I learned long ago there better be some pretty significant upside and so far, no one can tell me how this change will help me do business any better than today.

Lastly, my Saturn system does not do things the same way as my GM store. We have alot less people running Saturn especially in parts and service. Will this new system give me everything I have today plus something else or are we going to have to run the stores like a typical GM franchise? I probably know what the answer is as Saturn is less like Saturn these days and more like Chevy by the moment, and that's sad.

[saturn01]

Your current Saturn system cost include a monthly fees on your open account and a per vehicle charge on every invoice, together this makes up the total cost of the existing system.

With the exception of Parts, Saturn will be converging to new GM systems, sales in April '06 and Service in '07.

[JKcars]

Saturn01, will there no longer be a per vehicle charge for the new system? What can we expect from an out-of-pocket fee per month versus what what we 'pay' today? Will any of the upfront fees be paid by the vehicle fund or is that a direct charge to each retail location?

Will the new system contain all of the integration we have today or are we going to be moving to something more like the other GM Divisions?

Are there any dealers out there that have purchased the IDMS? Can anyone from GM tell us how many have bought it? How many does GM need for this thing to be successful?

[This message has been edited by JKcars (edited 04-10-2006).]

[saturn01]

The Saturn RIT is work through the vehicle fund questions, with or without the fund the new system is on average less money, your Saturn field rep can should you this.

Saturn with the exception of Parts will be moving to new versions of the systems GM dealers have, on April 15 Saturn will move to VOMS and OrderWorkbench. Next year Saturn will move to new service systems.

Yes a number of dealers have purchased IDMS, there is no number required for success, IDMS is an option for GM dealers and promotes competition in the DMS market place.

[JKcars]

Received more information this week from both GM and Saturn. Here are the key attributes they are pointing out about the new system....

Sales...will get a CRM package from Reynolds (being that we already use Saturn's suggested Cobalt I guess this is a switch we will have to make, by the way, the Cobalt stuff is very detailed and works really well, has taken us about a year to perfect but I guess that is not their concern).

F&I...will be able to present multiple finance and lease options with Desking (have had this functionality since our stores opened over 10+ years ago).

Fixed Operations...can greet customers at vehicle with Mobile Service Advisor (have seen application before, it is nice, but have to purchase tablet PC's seperately and put in a wireless network - being that our advisors stand in the service lane/drive, we have never seen this as a big plus/need). I am sure the tablets and wireless are not factored into their lower cost.

Parts...accurate information about parts pricing with Factory Parts Masters (WOW, that is new...I think we have had this feature since the beginning of time with computers).

Business Office...Centralized Accounting, Accounts Payable, Accounts Receivable (have it already with EDS).

Employee Effectiveness - onsite and online training (have it already).

This is what concerns me...people are acting like we are going to get something really new and exciting. If these are the key things that GM is going to tell me about the system, do they think we don't have these today?

The notice also says instead of purchasing additional tools and applications from multiple third-party vendors, IDMS provides all of the solutions to run the dealership. We met with Reynolds at NADA and they showed us a list of their approved third-party vendors. We have dozens that are not on their list. Reynolds told us we could switch to their approved or they would look at a seperate fee to provide integration. Either way, we will pay more or have to switch those providers and processes in addition to the DMS...this is going to be really painful, and for what?

They also say they didn't buy vaporware. Well I would hope not. Looks to me like we are replacing one system for another with little tangible benefits of helping us to significantly sell more units or service or parts. And by the way, EDS does a pretty good job in total. If this is all about paying less that may be a plus, but the numbers are still not adding up in that area, and no one seems to calculate the cost of changing. I attended a workshop at NADA once with Sandy Jerome and she said the cost to change is equal to the 3% of the total Gross Profit for the store for each month that the 'hell continues', and she said the average hell is 6-months. In addition, she said to expect to pay in overtime fees the cost of the entire accounting department (less the Controllers salary). We factor this in everytime we evaluate switching systems. I hope the people at GM are as well.

[This message has been edited by JKcars (edited 04-11-2006).]