Connecting Providers, Administrators and Dealers: Administration Systems - Part 1 of 4

Over the next five months, P&A Magazine will be profiling companies within our industry that connect providers, administrators, and dealers. We will be discussing where we are today, what tomorrow looks like, and what it means for the players.

The reality of interconnectivity between a dealer's DMS system and those that provide goods and services to the dealership has been slow to evolve. When PC's began to replace the old "green screens" in dealerships around the turn of the century, the genesis of the current revolution began.

Surprisingly, it was not the dealers that demanded greater efficiencies and better processes, but rather software developers that saw the true value of the dealer's data and the potential for the efficiencies they could create, even when the dealer was slow to recognize this fact.

The software solutions and integration strategies becoming ubiquitous today in dealerships are not the result of truly unique or groundbreaking cutting-edge technologies. It is simply our industry catching up to the benefits enjoyed by other industries.

Part I: The Connected Industry

For the first installment of our multi-part series, P&A will be profiling two companies that are at the forefront of integrating providers and administrators with dealerships: F&I Administration Solutions (F&I Admin) and StoneEagle. We will be exploring the internal processes they support, how they connect to dealers and third parties, and what the future looks like as the adoption of integrated technology evolves in our industry.

Connecting Internal Processes

The reason why we need to start by looking at internal processes is because the end result, at some point in the near future, needs to be a totally paperless end-to-end transaction process. Eliminating single points of failure (errors) and tedium in the back offices throughout the work flow is critical.

Why? Incorrectly rate a contract and it costs someone either money, customer satisfaction, or a lost sale (and possibly all three). Dealers that slow-walk remittance hold up agent commissions and harm the agent's cash flow. The whole claims process, from origination, to payment, to inspections, to looking up parts costs, needs to be smoothly integrated, or again, it costs time and money. On the flip side, creating administration efficiencies for dealers and providers can save money, either through allowing volume growth without the need to hire, or by redeploying/reducing head count.

The good news is, innovators like F&I Admin and StoneEagle are diligently working towards that ideal paperless work flow, where efficiencies can be measured in cold hard cash for the participants.

Both F&I Admin and StoneEagle provide comprehensive end-to-end solutions supporting the administration of VSC, GAP, pre-paid maintenance, etch, tire and wheel, and other F&I products. Nothing other than a computer with internet access is required of their customers. Users benefit from extensive security, reliable data processing, and intuitive reporting.

F&I Admin's SCS Auto platform is a fully integrated, web-based solution consisting of modules that are specifically designed to support each F&I product. StoneEagle's SEcureARCH system boasts minimal maintenance and support costs and multiple hosting solutions. Both companies' products support claims processing and automated claims payment, interfaces for dealers and agents, integration to third party applications through web services (more on this later), and integration to the leading DMS providers.

Connecting Dealers and Third Parties

Connecting providers and administrators with dealers through the aforementioned integration is the key ingredient that makes the whole process work. Nothing is more critical to achieving the end-to-end paperless transaction process than integration across a myriad of disparate platforms. Let's explore the current state of integration as it exists today.

F&I Admin is currently connected to 19 different selling systems, all of whom are connected through the same standard interface. This means that any change in the admin system will immediately be reflected through the third party software. This way, rates and contracts are managed in the administration system ONLY, so no additional administration is necessary to support the next third-party selling system. The benefit? Agents can focus on selling product, not software, because, for the most part, a dealer is connected electronically no matter what system they are using.

Incorporating the dealership into the integration mix is F&I Admin's "DAP" dealer administration system. DAP is branded as the administrator's website and is where the dealer can get and save quotes, print contracts, get reports, do online remittance, and more. All of this is directly connected to the administration system so the administrator will never have to enter something again that the dealer has already entered.

Of course, DAP is integrated with the dealer's DMS. Double data entry at the dealership level is significantly reduced when the business manager does not have to re-enter information already contained in another system. Multi-level integration like this will allow more time for selling product by relieving the overburdened business managers from onerous clerical duties. Even more important, many of these duties are performed while the customer is taking delivery and everyone is pressed for time. Eliminating mistakes here and allowing the process to flow smoothly will make a more stress free and enjoyable experience for all.

StoneEagle provides a scalable web service called SEcureIntegration to F&I menu providers, bi-weekly payment providers, third party administrators, aftermarket product providers, OEMS, and additional approved third party service providers. SEcureIntegration enables a real-time bridge between these applications and the DMS to eliminate errors associated with duplicate data entry and speeds up processes within the F&I department.

Creating efficiencies by connecting to third party dealer systems is a common theme with both companies, and significant success has been achieved with Menus and DMS systems, but what about other connectivity options? There are also credit card processing solutions for claims, VIN decoding systems, and systems that provide parts identification and values, among others. These third party connections must be facilitated for our goal of an end-to-end solution to reach fruition. As you will see below, companies are already experiencing the benefits of integration from these areas too, and are saving money.

F&I Admin is connected to the Wright Express credit card processing system to streamline the claims payment process. Payments are initiated within the claim screen, a unique card number is generated by Wright Express, and a fax is sent to the dealer. The dealer then processes the credit card and Wright Express returns a file each night of the payments made. F&I Admin's system automatically reconciles the payments made within the system and each morning the provider only needs to follow up on exceptions, of which there are generally none.

F&I Admin expects to process over $50 million in claims through their system this year. Each of their VSC customers has redeployed on average two people because of the efficiencies this represents - clearly offering absolute and direct savings to its customers.

Further supporting the contracting and claims process, both F&I Admin and StoneEagle are connected to VIN decoding systems and parts identification and value data bases. One development still on the horizon is to get deeper data from the VIN decoding, allowing the provider to identify a vehicle more completely when in for a claim. If the VIN decoder can provide an even more sophisticated level of data to account for things like factory or aftermarket installed sunroofs, the claims process could be a lot sharper.

StoneEagle integrates with Warranty Inspection Services, Southwest Inspections, and Carr Appraisals. Integration to each of these providers allows SEcureARCH users to submit inspection requests, receive alerts when inspections have been completed, and receive links to completed reports all directly from within the SEcureARCH system.

If there is a theme among the "integrators" that will connect providers, administrators, and dealers as well as third parties, it is that some form of open architecture will be necessary. The interested parties need to start demanding that no limitations be placed on the ability to share, manipulate, and manage data. This will only be accomplished when there is a common "language" integrators and software developers can work from.

We are beginning to see the benefits of common platforms with open architecture. F&I Admin, as mentioned earlier, has created a common integration point to their SCS Auto that is easy for anyone to connect to and serves all systems equally for all data requirements within the dealers’ world. StoneEagle's SEcureARCH allows third party vendors to integrate with ARCH on their own schedule.

Looking towards that future, for F&I Admin it is facilitating the inspection ordering process and access to refurbished parts databases. Keeping the inspection ordering process, forms, data, and photographs all on one system will eliminate multiple data entry points and provide notification when the inspection is complete.

The ability to offer refurbished parts prices alongside OEM parts in one system will provide more efficiencies and cost savings to the claims process. Currently these processes are done on the phone or through individual websites that require significant data entry and time.

Another peek into the future is to provide real time data through mobile devices such as smart phones. Mobile apps, branded as the provider's applications, delivering real time data to all constituents in the F&I industry – providers, agents, customers, and dealers - would be a very powerful tool.

F&I Admin and StoneEagle offer one very important thing that most providers, dealers and agents may not even realize. These two companies are highly adaptable and listen to their customers. They understand that changing a dealer's process is not the best solution when asking users to take advantage of their technology. Their forte is providing turn-key solutions and customizing platforms to fit precisely the way the dealer and the provider does business.

There are processes that are still not connected to third party providers and with some that are connected, there is still so much more that can be done. For example, inspection companies, refurbished and OEM part providers, DMS providers and deeper VIN decoding could all be better integrated within the industry. This is where we as an industry need to encourage, persuade, cajole, and dare we say demand that the integrated work flow becomes a reality. Our future profits and survival in a super competitive environment leave little room for argument.

Our industry is racing ahead toward a truly integrated and connected environment where data is accessible and can be manipulated across multiple platforms with ease. This will free up our human resources to spend more time taking care of our customers, innovating, generating more cash flow, and ultimately increasing the profitability of our organizations.