新《商业计划-可行性报告》毕博咨询报告－Driving Change in the dealer IT Enviorment8

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1、White Paper:AUTOMOTIVE AND TRANSPORTATIONDRIVINGCHANGE IN THEDEALERIT ENVIRONMENTWHITEPAPER1IN THIS WHITE PAPER:1.Executive Summary2.Seamless Integration:Linking Vehicle Manufacturers with Dealer Communities3.The Cost-Driven DSP Support Model Dealership Environment Dealership Installation Ongoing Su

2、pport Economic Model Pricing Models4.Addressing the Challengesof DSPs:Six Strategies for Vehicle Manufacturers Strategy 1:Leverage the Internet Strategy 2:Drive the Change Strategy 3:Define and Execute a Road Map Strategy 4:Drive Standards Strategy 5:Reengineer DealerCommunication Systems Strategy 6

3、:Focus on Revenue5.Conclusion:Establishing a Clear Path of ValueDRIVINGCHANGE IN THEDEALERIT ENVIRONMENTDRIVINGCHANGE IN THEDEALERIT ENVIRONMENT2BEARINGPOINTExecutive SummaryIn todays automotive industry,vehicle manufac-turers must continually identify new opportunities for efficiency improvement an

4、d cost takeout tomaintain their competitive advantages.Currently,some manufacturers seek to extend the makeup ofthe enterprise so that they can share informationand applications with dealers in real time as well as provide new products and services electronically.By making innovative connections wit

5、h dealers,they expect to achieve more accurate planning,faster responses to market shifts,significant costsavings and increased sales.To realize these benefits,however,vehicle manufacturers first need to developstrategies for addressing the challenges posed by the dealer service/systems providers(DS

6、Ps)thatcontrol todays dealer information technology(IT)environment.In the following discussion,we provide vehiclemanufacturers with insights that they can leverageto begin addressing these challenges.We begin withan overview of the systems that dealers use foreveryday operations,describing both the

7、need forintegration and the market dynamics that make thisintegration difficult to achieve.Next,we discuss theimportant role played by DSPs in todays dealer IT environment and offer specific informationabout the DSP business model.Finally,we outlinepotential strategies that vehicle manufacturers can

8、use to collaborate with or work around DSPs inleveraging new technologies and building moreproductive relationships with automotive dealers.Seamless Integration:Linking Vehicle Manufacturers with Dealer CommunitiesA few well-established DSPs currently supply themajority of automotive dealers with tu

9、rnkey IT systemsalong with the associated services andsupportthat have become essential to effectiveday-to-day business operations.Known as dealermanagement systems,these systems enable the effi-cient performance of back-and front-office taskssuch as inventory management,sales and servicemanagement,

10、financing,accounting and humanresources management.See Figure 1.In addition to purchasing dealer management systems,dealers must pay the cost of operating and maintaining dealer communication systems,which are the sophisticated applications that mostvehicle manufacturers have already developed andde

11、ployed.These manufacturer-mandated systemssupport critical functions such as parts ordering andwarranty claims processing and form an integralpart of dealers day-to-day operations.INVENTORY MANAGEMENTSALES AND SERVICEFINANCINGACCOUNTINGHUMAN RESOURCE MANAGEMENTFIGURE 1.COMPONENTS OF A DEALER MANAGEM

12、ENT SYSTEMDRIVINGCHANGE IN THEDEALERIT ENVIRONMENTWHITEPAPER3Most vehicle manufacturers have developed,forspecific situations,strategies for coping with thislack of integration.However,continuous,seamlessintegration between dealer management systemsand dealer communication systems has yet to beachie

13、ved.This situation results in process inefficien-cies for dealers,DSPs and vehicle manufacturersalike and results in rising maintenance costs fordealers.It also leaves vehicle manufacturers withoutreal-time views into their sales channels.In addi-tion,dealers continue to struggle with the multipleen

14、tries required from dealer communication systems to dealer management systems.This chal-lenge is particularly troublesome for multi-branddealers that must enter the same information threeor four times to support the manufacturer,the dealerand,in some cases,the dealers parent business unit.Automated

15、processes,rapid transactions and tightintegration between dealer communication andmanagement systems will be achieved only if manufacturers adapt to or create change within the preexisting IT systems currently being suppliedby DSPs.However,reforming todays dealer ITenvironment is a significant chall

16、enge.Althoughprofit potential exists in the development of customized extended applications and increasedcollaboration with vehicle manufacturers,DSPsbelieve that these advances could cannibalize exist-ing market share and open the door to greater manufacturer control and competition,thus under-mini

17、ng the viability of the DSP business model.Nonetheless,there are several strategies,discussedlater,that vehicle manufacturers can pursue toaddress the challenges posed by DSPs.MANUFACTURERDEALER INFRASTRUCTUREBUSINESS APPLICATIONS AND SERVICESDealer CommunicationSystemsDealer Management SystemsFIGUR

18、E 2.INEFFICIENT BATCH METHOD OF DATA EXCHANGEAs a result of all these components,dealers incursubstantial costs in operating these systems.Forexample,dealer communication and managementsystems each require expensive in-dealer hardwareto power the various functions.The IT cost to manage both systems

19、can average approximately0.6 percent of revenues for a typical dealer group oradd approximately$100 per vehicle.From the perspective of vehicle manufacturers,however,the greatest challenge posed by DSPs isthat an integration capability is not being built intothe dealer management systems they provid

20、e.Because DSPs retain and attract dealer clientschiefly through cost-driven strategies that fail toreward innovation,they have little incentive to create a common data model across applicationsand order-management systems.As a result,external integration between dealer managementand communication sy

21、stems has become virtuallyimpossible to achieve at a low cost.This situation,inturn,prevents vehicle manufacturers from realizingthe full benefits of more effectively collaborating,exchanging information and sharing applicationswith their dealer communities.See Figure 2.The unique reporting and inte

22、gration require-ments of each vehicle manufacturer franchisewith which the dealer is affiliated.Any multi-franchise business locations andreporting structures.Hosting as part of system architectures that canvary widely in age,capacity and load.Integration between each of the dealers ownbusiness unit

23、s/locations.Potentially numerous integration points with vehicle manufacturer and third-partyapplications.Dealership InstallationThe introduction of new software and solutionsusually requires that DSP field-support staff visitthe dealership to perform the installation.Theinstallation can involve new

24、 hardware and a uniquecustom configuration required by the dealers IT architecture as well as testing of the new productfor compatibility and performance.In addition,varying amounts of training and instruction may be required.Also,due to the heavy demands of the dealer retail environment,new product

25、s oftenmust be installed after business hours.All of thesevariables serve to drive up support costs.Ongoing SupportThe mission-criticality of automotive dealer ITmeans that DSPs must offer highly available support services.The ratio of support resources tocustomers is much lower,however,than would b

26、ethe case with software support companies servingother industriesa situation that results in highercosts for both DSPs and their customers.The majorDSPs have each introduced ASP-based solutions,but these solutions have not been widely adopted,DRIVINGCHANGE IN THEDEALERIT ENVIRONMENT4BEARINGPOINTExte

27、rnal integration between dealer manage-ment and communication systems hasbecome virtually impossible to achieve at a low cost.This situation,in turn,preventsvehicle manufacturers from realizing thefull benefits of more effectively collaborating,exchanging information and sharing applications with th

28、eir dealer communities.The Cost-Driven DSP Support ModelUnlike organizations in most other industries,auto-motive dealers rely on very small internal IT staffsto run their businesses.Dealers require a differentlevel and type of support that generally exceeds ITsupport provided in other industries.Th

29、is results in comparatively high support costs,so dealers rely heavily on DSPs for their IT assistance.Themajority of dealership IT support is centered onresponding to user errors rather than to technicalissues.Because dealer personnel typically are notsavvy computer users,they often require a level

30、 ofsupport higher than that required even by averagecomputer users.Dealership EnvironmentThe demanding nature of the automotive retailenvironment requires rock-solid performance fromsupporting IT systems.If these mission-critical systems fail,every department of the dealership canbe frozen in a prof

31、it-draining lockdown.Despitethe relatively limited options available to dealerschoosing a dealer management system,each dealersIT implementation will be unique.For example,the dealers IT system must be compatible with:largely because they fail to significantly lower user-error support demands.As in

32、any modern IT support organization,thereare multiple layers of support in dealer systems,ranging from user manuals and online documenta-tion to phone staff and field staff.Increasingly,the major line of support for a dealer managementsystem comprises remote,phone-based supportprofessionals who can d

33、ial in to the dealers systemto diagnose and sometimes remotely fix softwareand configuration problems.Again,the majority ofthese calls typically concern user errors as opposedto technical ones.One of the major trends driving the convergence of dealer communication and management systemsis the use of

34、 Web-based applications to help reducethese on-site service fees.To this end,dealer-drivenportals can remove expensive server hardware in thedealership.The dealer needs minimal hardware,such as personal PCs and a high-speed Internetconnection,and all software can be centrally hostedand supported,whi

35、ch can greatly simplify mainte-nance and upgrade processes.Economic ModelGiven the shrinking population of the current baseof 22,000 new-car dealers in the United States,theopportunity to spread out support costs is dimin-ishing.Assuming that dealers mainly purchaseadditional applications from their

36、 DSPs,and factoring out smaller dealers,the expected marketfor a very successful dealer IT product is only about5,000 unitsa relatively small customer base acrosswhich to share research/development and supportcosts.Given the lengthy sales cycles for most products,DSPs often do not project returns un

37、tilthree to five years after introduction.DSPs allocate support resources based on therequirements they project for each product as it isintroduced/upgraded.When support resources arestretched thin,customer satisfaction typically dropsprecipitously.To keep customers happy,DSPs mayneed to allocate la

38、rge support resources to newproducts,thus driving early customer acceptanceand satisfaction.As the product matures,supportresources can ebb with demand to the point ofdiminishing returns(i.e.,when additional resourceinvestment would generate only minimal customer-satisfaction returns).Of course,due

39、to the multi-tasking responsibilities of the support organization,this shift can be more of an accounting formalitythan an actual resource allocation;however,largesupport campaigns,such as new-product introduc-tions,must be clearly tracked and accounted for.The price point for support is based on th

40、e projectedutilization of the support resource.A profit marginis built into the price,and expenses are factored intothe business model of each DSP product set.As a rule,effective product strategy means keepingsupport costs to a minimum.The need for low support costs,however,can result in increasedre

41、search and development resources being expended,which can drive up overall product costs.For example,extensive testing of unique dealer management system configurations will drive upDRIVINGCHANGE IN THEDEALERIT ENVIRONMENTWHITEPAPER5Dealer-driven portals can remove expensiveserver hardware in the de

42、alership.The dealerneeds minimal hardware,such as personalPCs and a high-speed Internet connection,and all software can be centrally hosted and supported,which can greatly simplifymaintenance and upgrade processes.DRIVINGCHANGE IN THEDEALERIT ENVIRONMENT6BEARINGPOINTPricing ModelsPricing models are

43、fairly consistent across DSPs,with fees divided between hardware and software.DSPs typically include fees in the following categories:One-time,up-front fees.Monthly software licensing fees(often catego-rized as“support fees”in other IT models).Monthly support fees.Some products also include transact

44、ion-based pricing.In addition,there are other classes of fees tied to hardware and the number of users andlocations.While the use of monthly software licensing feesrepresents a break with IT industry norms,these feesdo include,among other things,the research anddevelopment costs that result from the

45、 need to regu-larly update systems to meet vehicle manufacturer-specified reporting requirements.Figure 3 showstwo examples of DSP product pricing structures.FIGURE 3.EXAMPLES OF DSP PRODUCT PRICING STRUCTURESUP-FRONTMONTHLYSOFTWARETOTALSUPPORT-SUPPORT ANDCOSTSSOFTWARE SUPPORTANNUALSPECIFICLICENSING

46、LICENSING(PER LOCATION)COSTPERCENTAGEPERCENTAGEAccounting$2,500$200$35$5,3207.89%53%(General Ledger)Parts Inventory$1,875$150$26$3,9907.89%53%the research and development costs of the newproduct but ultimately lower support costs.Thechallenge for DSPs is to correctly project the pointof diminishing

47、returns.Although support can constitute a manageable revenue center for DSPs,support-intensive prod-ucts tend to create dissatisfied dealer customers.Consequently,a critical question for DSPs is this:How much are dealers willing to pay to avoid support-intensive products?The apparent answer,however,

48、usually is“not enough to cover the even-tual cost of support.”This situation,in turn,motivates DSPs to price support fees and softwarelicensing separately.Because dealers understand that software updatesare needed to keep their systems compatible withvehicle manufacturer requirements,they perceiveva

49、lue in paying for software licensing,while seeingthe need for support as a failure on the part of theDSP.Consequently,support fees tend to be low andlicensing fees tend to be high.It is logical to assumethat fees collected for software licensing oftenunderwrite actual support costsespecially at theb

50、eginning of a products life cycle,when supportexpenses are at their peak.DRIVINGCHANGE IN THEDEALERIT ENVIRONMENTWHITEPAPER7Because other costs are small when compared withsoftware licensing fees,the true cost of support canbe estimated only when the licensing and supportfees are aggregated and look

51、ed at as a percentage ofthe total cost.Of course,until an entirely new soft-ware upgrade and the associated up-front fees arerequired,the future dealer cost exclusively comprisessupport and licensing.Addressing the Challenges of DSPs:Six Strategies for Vehicle ManufacturersHow can vehicle manufactur

52、ers work with DSPs tosave money for their dealers and themselves?Whichapplications should manufacturers consider provid-ing directly to their dealer communities?Whichwill yield the highest return on investment?Whichare the easiest to implement?How can manufacturerproducts be launched to dealer commu

53、nities inconjunction with DSPs to help ensure productacceptance and adoption?The potential strategies,each with specific advan-tages and disadvantages,are outlined as follows:1.Leverage the Internet.2.Drive the change.3.Define and execute a road map.4.Drive standards.5.Reengineer dealer communicatio

54、n systems.6.Focus on revenue.Strategy 1:Leverage the InternetVehicle manufacturers need to deliver informationto dealers in the most cost-effective way,and this can efficiently be accomplished through thecreation of a dealer portal that effectively bypassesthe dealer management system.For instance,o

55、nemanufacturer currently allows its dealers to ordertheir own inventories online.The system trackssales trends day by day and dealer by dealer to help assembly plants determine what to build andto advise the marketing department on what to promote and where.By more tightly connecting dealers and man

56、ufac-turers,portals can help manufacturers design,develop,plan,purchase,manufacture,distributeand sell vehicles based on real-time input ratherthan on traditional build-to-forecast models.Portals support the entire sales processfrom making an offer,to finalizing the contract,to deliv-ering the vehic

57、le.They enable sales reps to configureand locate vehicles at the importer or wholesalersAssuming that dealers mainly purchase addi-tional applications from their DSPs,and factoring out smaller dealers,the expectedmarket for a very successful dealer IT productis only about 5,000 unitsa relatively sma

58、llcustomer base across which to share research/development and support costs.One vehicle manufacturer currently allowsits dealers to order their own inventoriesonline.The system tracks sales trends day byday and dealer by dealer to help assemblyplants determine what to build and to advisethe marketi

59、ng department on what to promote and where.site by deploying real-time data and powerful searchcriteria to find vehicles that match what a given customer wants.In addition,customer service managers can handlemaintenance and repair more efficiently by locatingand ordering spare parts using a Web-base

60、d catalog.Because the portal seamlessly integrates independentonline services,the manager can also order partsfrom third-party vendors.Strategy 2:Drive the ChangeVehicle manufacturers can drive change as long asthe value proposition is balanced among all partiesinvolved,as when the discontinuance of

61、 fiche andpaper catalogs created a new market for electronicparts catalogs.With respect to electronic parts catalogs,the value lay in significantly lower costs ofproduction,access to fresh information and theintegration of solutions.In this model,the benefitsare clear for all parties.In the case of

62、DSP support,one mechanism would be to mandate the lowestlevel of connectivity from dealer to manufacturer.Strategy 3:Define and Execute a Road MapMany DSPs have resisted incursions by vehiclemanufacturers into their market space.However,dealer-facing applications,“free”data and seamlessintegration c

63、ould help DSPs remain successful.Ifvehicle manufacturers could define and execute systems road maps and bring the DSPs along in theprocess,it would be much easier for DSPs to planfor the new systems and connectivity.The potentialdownside for DSPs,however,is that barriers tomarketplace entry could be

64、 lowered.From this perspective,platform complexity is a DSP ally interms of maintaining market share and profit margins.To bring new applications and services todealers,vehicle manufacturers will need to makefirm commitments to follow through with their initiatives.The failure to do so would be seen

65、 byDSPs as a trust violation.See Figure 4(page 9).Strategy 4:Drive StandardsMany vehicle manufacturers belong to the dealerstandards group(www.starstandard.org).This standards body has begun the process of establish-ing integration and connectivity standards for theautomotive retail space.This organ

66、ization will beneeded to help bring the dealers,DSPs and vehiclemanufacturers together for mutual benefit.DRIVINGCHANGE IN THEDEALERIT ENVIRONMENT8BEARINGPOINTPROSCONS Real-time information Would exclude the DSPs Benefit to both dealer Perceived loss of control and manufacturerby dealersPROSCONS Common computing Costs passed on platformto dealers Easier integration Single vehicle manufac-turer cannot drivePROSCONS Dependable view Could slow develop-of the futurement of applications/services Redu