3 Ways You're Gambling Away Dealership Profits With Old Technology

Sticking with the same DMS while hoping for a different result is like gambling away your dealership’s profits. A modern, cloud-based DMS platform should be enough to convince any dealership that staying the same is just not an option anymore.

You can probably picture it – smoky casino, bank of shiny slot machines, and, of course, the guy with a coin bucket bigger than his brain dropping quarter after quarter into the slot and pulling the lever. As the machine swallows up his money, he hopes that each pull will bring him closer to the cash prize. But the jackpot never comes. Instead, the many small disappointments combine to create a large and devastating loss.  

There’s a harsh lesson for your dealership in this story. And, guess what? You’re the guy with the coin bucket.

Then what’s the shiny slot machine, you ask? Your outdated DMS. New cloud-based dealer management systems are much better than older systems. But still, most dealerships stick with the same DMS technology, putting up with repeated disappointments, frustrations, and inefficiencies for long periods of time. Just like gambling, they hold out hope for a different, better outcome that never arrives. 

Sticking with your current DMS system is hurting you more than it would to make a switch.  

Those little frustrations add up across multiple years to become major losses in profit and productivity. Here’s three ways you’re costing your dealership by not using cloud-based DMS technology:

1. High operating costs

Cloud-based dealer management systems save dealerships a lot of money in operating costs. Unlike older site-premised platforms, cloud-based systems don’t force dealerships to purchase or maintain on-site servers or update local software installations. When you factor for storage, processing power, maintenance, administration, and other operating costs, many dealerships can eliminate up to $10,000 of overhead expense each month just by switching to a cloud-based provider. On top of these operational savings, most dealerships using cloud-based DMS platforms also pay much less in monthly software subscription fees. 

$10,000/month (operating costs) x 12 months = $120,000/year PER STORE

2. Security risks

DMS providers that have been around for a long time are exposing dealerships to unnecessary security risks. The local servers needed to run site-premised systems are vulnerable to physical breech, natural disaster, unauthorized tampering, and intentional destruction. As long as the personal information of customers is stored on site, it’s at risk of being lost or stolen. With cloud-based providers, that information is kept on more than one server and the server is stored off site, where it’s protected by the industry’s best cyber security professionals. And, the best cloud software companies follow strict security guidelines, including SSAE 16 requirements, put in place by the American Institute of Certified Public Accountants. 

3. Limited System and Data Access

Cloud-based DMS platforms give dealerships better access to their systems and their data. Because they can be securely accessed anywhere that you have an Internet connection, those systems are available anytime, day or night. And, because cloud-based platforms are connected through the web, all DMS data changes are reflected throughout the entire system in real time. Better access to the system and its data means that dealers and managers can monitor their businesses from anywhere, using real-time data to make better business decisions.

That kind of accessibility and convenience has already helped cloud-based technologies to revolutionize other industries. Just think—when was the last time you rented a video from an actual video store? Netflix and other cloud-based video streaming services have completely destroyed Blockbuster and other brick-and-mortar rental companies. With Netflix offering its 20 million subscribers the opportunity to stream movies from a growing selection of in-home devices, there just isn’t a market anymore for out-of-home video rental. As one writer has observed, “It was a battle between old technology and new technology, and it looks like new technology won out in the end.” Those same new technologies have arrived in the automotive industry, which is probably headed for the same kind of changes.

Take the gamble out of your dealership’s future

Sticking with the same DMS while hoping for a different result is like gambling away your dealership’s profits. Putting up with the inefficiencies of an old system while the industry is being transformed by new, cloud-based platforms is definitely not a winning formula. The benefits of a modern, cloud-based DMS platform—including lower costs, increased security, and improved access—should be enough to convince any dealership that staying the same is just not an option anymore. It’s time to end the disappointment and cash in on the coin.  

Are you ready to upgrade your DMS technology and contact a Dealertrack DMS representative? Call 888.514.6166 or click here.