F&I e-Commerce Revisited

In a previous article titled “Connecting Providers, Administrators, and Dealers: E-Commerce”, we profiled a small set of companies to gain insight into the then current state and potential future of F&I e-Commerce; the means to rate, contract, and remit aftermarket products electronically. Each had a different approach and business model but all focused on the same goal: the acceptance and proliferation of e-Contracting in the marketplace. At the time, we had questioned whether service providers would actually be willing to pay a fee for electronic contract processing, and “how the industry could cross the chasm.” We checked in with Ristken Software Services, a company that is deploying e-contracting on a large scale, to get their take on some of the challenges and practical solutions facing the industry — and to address the current and future state of e-commerce.

What is Ristken’s Business Model? Is it subscription or transaction based?

Ristken is a technology services provider delivering end to end F&I E-Business solutions for service providers, OEM’s, and their respective dealerships. We utilize a transaction based model where service providers only incur a cost if a contract is sold. This type of payment model has gained traction in the market place as it helps to mutually align each party for success.

We leverage a highly flexible technology platform built on an independent architecture. This enables the delivery of services, and integrated solutions to meet specific needs of e-Commerce customers and their dealerships.

• One of the initial challenges that Service Providers will face is determining whether or not to tackle their e-Commerce initiative internally with their own IT department or to partner with an external technology company. From what we have seen, if done internally, the scale and complexities of building, deploying, and evolving a large-scale e-Commerce initiative can seriously strain the Service provider’s internal resources. This can cause them to lose focus on their core business, which is developing, selling and administering products. Finding an experienced and capable technology partner is often the solution. But this solution also has the inherent challenge of working within and around the Service Provider’s legacy systems and existing contract administrations systems. Therefore we feel it is essential for any outside technology provider to be experienced in working in and around these existing systems to ensure a smooth deployment and on-going evolution of the program.
• Another challenge is the desire for Service Providers to maintain a level of customization and control over their business processes, rates, and customer facing applications. Simple, one-size-fits-all solutions are not proving to be the norm. For example, customer driven work flow processes, customized front-end user interfaces, special branding and design, and specific methods of authentication are all realistic expectations for a Service Provide launching a major e-Commerce initiative. All of this adds another level of technical complexity to the project that must be accounted for up-front in the solution process.
• Regardless of the e-Commerce development direction, internal IT or external technology partner a, b, or c, any practical solution will face the challenge of maintaining, training and evolving the platform and processes in order to stay current and to ideally play ahead of the curve. Technology doesn’t stand still, nor should the efforts to continuously improve the platform.

In order for F&I e-Commerce to reach critical mass, we must understand the practical needs and challenges of the marketplace and work to provide the solutions that best address them. Our belief is that these solutions require much more than a pipeline connecting Providers and Dealers or a portal to push out rates. We believe that a successful e-Commerce initiative must include a complete solution, driven by sound strategy, supported by essential services, and kept relevant through innovation.

The Future

As more and more Service Providers come on board with e-Commerce, more questions are answered and more momentum is created in the marketplace. For example, are Service Providers willing to pay a per contract fee for processing contracts on a third party platform? The answer is yes. We see various models in the marketplace adopting this approach and on our platform alone we expect to process over a million contracts over the next year using this type of payment model.

Will dealerships embrace the changes necessary to adapt to e-Commerce processes? Based on our experiences, the answer is again, yes. Some major Service Providers have actually transitioned 100% of their contracts to electronic processing. The reality is dealership adoption has not proven to be a major issue, providing there is a sustained commitment from all sides.

Have we reached critical mass in the marketplace? No, we have not. But many forward thinking Service Providers with a commitment to the process have been able to reach critical mass within their world of dealerships; some in the thousands.

How many other industries are still using antiquated printers and handwritten log reports? And how many have not embraced at least some form of electronic Commerce? It’s time to move forward. We do accept the fact that there is confusion in the marketplace around F&I e-Commerce solutions and that getting started may at first seem a little daunting and potentially complicated. Our job as one of leaders in this segment is to help clear up the confusion and to make the seemingly complicated, simple and achievable. We believe the momentum will continue and more and more Service Provider’s, OEM’s and Dealerships will continue to embrace the fully electronic office, and the industry will be much stronger for it.