For many years, Bill Feinstein, president of Planet Honda in New Jersey, has fought for his dealership to make better use of its data. Feinstein understood the potential to leverage financial, operational, and transactional information to improve dealership performance.
He quickly realized, however, that better data collection and analysis would require upgrades to the dealership’s technology, specifically the need to transition from a closed, site-premised DMS platform to an open, cloud-based system.
Similar to Planet Honda, many dealerships have started to realize the importance of leveraging dealership data to their advantage. As the auto industry continues its shift to accommodate new technologies and customer behaviors, dealerships’ data should be used to increase operational efficiency, improve profitability, and increase customer retention.
Cloud-based technologies have made it easier than ever before for dealerships to collect, access, and analyze their data. And, best of all, early adopters of those technologies are finding that they provide significant competitive advantages.
Simply put, if dealerships aren’t already using cloud-based technology, they are incurring costs and maintenance headaches that could be avoided. In order to understand the impact and benefits of cloud-based technology, here are definitions of the technology that came before:
- On-premise server: More than 20 years ago, you had only one choice: hosting your data onsite at your dealership, with your own server. Some dealerships still use this model, making them responsible for protecting and maintaining their data and physical hardware.
- Hosted server: Many dealers found onsite servers such a hassle that the industry moved to hosting servers in third-party data centers. This model only eliminated some maintenance problems, leaving dealers to manage growth, hardware, and access issues on their own.
Times have certainly changed. Fast-forward to today’s technology landscape, where private cloud-based solutions offer maintenance-free, hassle-free, and low-cost options for dealerships to host and access their data.
For example, the use of a DMS that operates on a private cloud with built-in data security through accredited data centers, and that employs industry-best practices, can lead to major benefits including security, ease of maintenance, and accessibility.
- Security: Hosting your data in the cloud alleviates the stresses of physical and cyber security, data backups, and business continuity. If you host your data onsite, your data is susceptible to a number of threats, such as hackers and natural disasters, which places the burden of security on the dealership.
- Ease of maintenance: In the past, maintaining your data meant maintaining your server. You had to buy new hardware, patch the system, and maintain the components yourself. Through a cloud model, you have a maintenance-free option. In the cloud, your growth is scalable, which means as your business grows, your hardware grows with you, without the burden of additional purchases. Patches and data updates are handled for you at the data center, so you’re never inconvenienced with a pending update or security threat. You can focus on running your business, not your hardware, when you operate from the cloud.
- Accessibility: We live in a world where information is instant, so why shouldn’t your data be available whenever you need it? With cloud hosting, your data is accessible via the internet, so you can access your data anytime, anywhere.
Modern technology solutions allow you to customize user rights, so you can control when, where, and by whom your data is accessed.
Cloud-based DMS technologies are empowering dealerships by giving them control of their data and enabling them to work with the third-party vendors that they choose, in addition to protecting their data from physical threats and other security vulnerabilities. Open DMS platforms were built to be flexible, dynamic, and secure.
These exciting innovations have the power to transform the automotive industry. They provide sustainable advantages to dealerships willing to abandon old methods and move their dealerships up to the cloud.
Kai Nielsen is director of strategy and business operations, dealer management solutions (DMS), for Dealertrack, a Cox Automotive brand. Nielson is responsible for the development, management, and execution of the company’s business strategy and planning process for its DMS offerings. He also heads up Dealertrack DMS’s Customer Advisory Council.
Latest posts by Kai Nielsen
- Cloud-Based Systems Empower and Protect Your Dealership - December 2, 2016