A Question on DMS Integration - Open Dealer Exchange Responds
A Question on DMS Integration - Open Dealer Exchange Responds

We have often been asked by our readers to do an in-depth analysis on Dealer Management System (DMS) integration. We wanted to start out by asking Open Dealer Exchange how they view DMS integration. Below is their response. Next month we’re going to hear from the others in the industry, so stay tuned.

What type of DMS Integration is right for F&I Product Providers?

By: Ron Greer

For most F&I Product Providers and Administrators, the primary sales channel is an automotive dealer, this distributed network often presents unique challenges to conducting efficient business. The F&I process is one of the most sophisticated processes to accurately transmit data between an F&I product provider and the DMS. Federal, state and county regulations, add-on services, sales campaigns, credit processes and approvals all require the integration between the DMS and the provider to be up-to-date and accurate at all times during and after the sales process. For instance, even the most well thought out F&I product and integration strategies can inevitably hamper the dealer’s network, cause system compatibility issues, and potentially place the dealer and consumer at risk if the data is not properly transmitted in a timely manner, calculated properly, validated, secured and monitored.

Those that conduct business through an automotive dealer know there are a variety of software applications used in the dealership sales process. Many applications have a specific purpose such as CRM, Sales Process and Tools, Specialized Deal Desking and more, and when used as part of the entire F&I process, each application is a critical part of a successful sale. But because each of these applications is often from a different supplier, the movement of the data, the transmission frequency and the requirement of accurate data complicates the process and, if not done in cooperation with the DMS, can cause the data flow to become disjointed.

The DMS is the system of record for all transactions stored in the DMS and transmitted to an outside F&I service. The DMS is where the forms are usually printed, where vehicle inventory is converted to customer inventory, and where the deal is sent to the accounting software. The term “DMS Integration” means a variety of things and without a full understanding of it and why it is important to the overall sales process, roadblocks continue affecting the accuracy of the data and the successful transmission for data transactions. By understanding internal needs and available options, F&I Providers and Administrators can find the right solution for their businesses.

Solutions vary based on need and circumstance, and there are three major ways for Product Providers and Administrators to conduct business more efficiently with their dealer partners, which all require some type of data exchange or integration:

  • Data Interface between the DMS and other software or reporting solutions
  • Forms/Contract Printing Management used in the dealership
  • Transaction Integration between the Provider and the dealership

Data Interface

Moving data from the DMS to populate fields in a specialized software application has created buzz in recent years and is a requirement for the DMS to provide. Data Interface from the DMS to other software has been called by many different product names such as a Download, Certified Interface, Third Party Access, and Unsupported or “Hostile” Integration. Most major specialized software applications, such as CRM or Electronic Menus, need to make data flow between the two systems as streamlined as possible for the dealer. These specialized applications rely on accurate data to be passed from and updated to the DMS in a near real-time manner. The data needs to support the business processes defined by the application and supported by the DMS. F&I managers will not tolerate the extra work to re-key customer, vehicle and deal information, inaccurate payment and tax calculations, or bad data being transmitted into their specialized application. DMS software providers—including Automatic Data Processing (ADP), The Reynolds and Reynolds Company and other DMS providers—have developed programs to securely share data between software applications which helps to remove these obstacles.

DMS integration is becoming more and more complex due to the need for timely, reliable access to F&I data. Access to DMS data once a month, once a week or once a day does not meet the need for F&I type services. Real-time secure access is a requirement to ensure success. This type of integration has increased the risk to the dealer as well as the F&I software vendor for receiving accurate, safe and secure access if not directly received from the DMS provider. DMS providers like ADP and Reynolds and Reynolds have implemented comprehensive programs that support this type of access ensuring the dealer’s data is protected, system performance is reliable and the data transmission supports the DMS business rules.

Technical considerations for a smooth process are also significant and can only be provided successfully from the DMS provider. Mapping data to ensure that a field (such as customer name) is properly converted, state and county tax percentages are calculated correctly, rounding and payment calculations match those fields in the DMS as well as field lengths and formats between systems match all help avoid software support issues and awkward moments when data is mixed up in front of a customer during the sales process.

The entire process is complex, however, and extracting data from the DMS is just one aspect. There is also the entirely different and complicated matter of pushing data back to the DMS to complete the sales loop. This has to be done in cooperation with the DMS provider in order to assure the data of record in the DMS is accurate and secure. This data is used throughout the entire dealer’s network and therefore cannot be any risk.

The most reliable, secure and industry-supported method is a certified data interface with the DMS vendor. Programs such as Reynolds and Reynolds Certified Interface or ADP Third Party Access Program are available to certify partners who comply with the business rules and processes inherent within the DMS. These programs meet the business rules in the DMS, assuring the specific needs of the certified vendor.

A DMS approved application can also be used if the software provider has a specific need to receive a nightly “push” of data. The DMS has a “download” application that supports the dealer in moving data from the DMS to a dealer defined destination on their LAN. The data is then managed by the dealer and can be provided to any service or application provider.

In the last several years, non-certified access has been perceived as reliable, secure, low cost or even free. This type of access to the DMS requires due diligence. Because the success of accessing the DMS depends on a reliable stream of accurate data, these “hostile” integrators pose a potential risk. DMS vendors routinely change their applications and methods of access in order to support new automotive business rules and security requirements. Dealers expect these changes to be made. The “hostile” integrators have to react to these changes which may hinder the business by providing “unreliable data” and/or unexpected “breaks” in the data interface. Ask yourself, does the risk outweigh the security of a DMS certified interface?

Tip: If your dealers require a very specific business function that is only satisfied through a specialized software application, then consider leveraging a Certified Data Interface to assure safe, secure and accurate data.

Forms and Contract Printing Management

Forms and Contract Printing Management is a very common solution and a simple choice. Even today, most contracts are printed on forms stock in the dealership using what’s called an impact printer. Within the DMS there is a forms formatting program that places fixed data in defined line and column locations, as well as prompts the user for variable data that does not reside in the system. A Digital Forms Library replaces the old process whereby the Provider or Agent (forms owner) supplied a box of forms to the dealer. The dealer printed a deal, and sent it with five blank copies to their respective DMS Vendor to “program” the forms format. Multiply that process by all of the dealers a Provider does business with and the reliability of all necessary forms being updated diminishes significantly.

The technology advancement in utilizing a Digital Forms Library allows for a smoother transaction and according to Rod Allen, National Enterprise F&I Products Manager for ADP Dealer Services, there are definite benefits.

“Providers who participate in the ADP e-Forms Library indicate that they are proactive in using technology to assist dealers in improving the dealership F&I process,” Allen says.

ADP and Reynolds and Reynolds currently manage their respective libraries of digitized forms to streamline their dealer’s process. The company who owns the copyright and publishes the forms (forms owner) works directly with the DMS vendor to “push” updates to the dealer. In most cases, each dealership still requires customization, but the process is managed much more effectively upstream, reducing implementation time and increasing the chances of an accurate and timely dealer form.

Another feature of this forms library is the availability of advanced digital forms printing solutions. Dealers now have the option to have all of their F&I forms printed on laser printers, which enables a highly customizable consumer and dealer experience. This combination of software and services minimize dealer costs through paper efficiency including control over customizable page printing and printer routing. It also provides benefits such as electronic signature, deal jacket archival and the ability to email a very personalized electronic document folder to the consumer.

Connecting to the DMS Forms Library offers a single point of contact for F&I Administrators. Whether the dealer prints on traditional forms, or uses optional laser printing features, the process of maintaining accurate forms is centrally managed.

Tip: Participation in the DMS Forms Library improves the process and paves the way for future capabilities. This is usually available to Providers at no charge.

Transaction Integration

The industry has conceded that the DMS cannot be everything to everyone. It is a lot of work building and supporting a system to satisfy a diverse population of dealers. Factor in compliance to Regulatory, OEM, Lender and Provider processes and it is clear why a DMS might need to narrow the F&I Aftermarket Screen to a simple “input only” function.

It is in this arena where the game is changing and the market need was apparent. There is a third solution, commonly known as Transaction Integration, which is advancing the industry towards a seamless and secure data flow. The logic behind this integration is that the DMS could hold all functions and processes to fully complete a product sale in the F&I office, from correct ratings to e-Contracting.

Currently, F&I Managers in the dealership need to utilize various systems, portals or software tools to complete a sale. With Transaction Integration, the dealer can support full e-Contracting within the same workflow in the DMS. By using this service, a Provider can virtually eliminate the cost and overhead associated with hosting their own contracting portal.

Not only does the flow stay within one dealership software application, a Provider can also present only eligible products and coverage for a specific vehicle and customer under the conditions of the deal. This allows for an accurate point of sale experience based on specific VIN and driving conditions. A DMS that has enabled Transaction Integration can present accurate and instant product ratings, customized forms printing, electronic signatures, and deal data transfers – all within a single workflow.

In a perfect world, every dealership would use the same software applications in the same way. Today’s reality, however, is that even two F&I Managers that share a printer might utilize different software applications, differently. And as long as they both quote correct rates for eligible products that are printed on the correct contract and automatically register at the time of sale, it should be a non-issue for the Provider regarding what software solution they used. This is where the most significant benefit of Transaction Integration lies. No matter what software the dealer chooses to present F&I Products (e.g. menu, CRM, Desking), Transaction Integration can link to them all in order to complete and print the contract. Providers no longer need to incur large integration or system costs to develop custom integration to all of these systems – they can integrate to one and be done.

Tip: If the Provider is neutral on dealership software preference and only requires real-time integration to the consumer point of sale, then Transaction Integration is the emerging technology to consider.

DMS Integration is an issue that should be carefully considered by F&I Providers and Administrators, and depending on their unique needs, each option or combination of options outlined has its benefits. Regardless of which path is chosen, the end goal is to ensure a successful dealership experience that efficiently maintains the integrity of the data. As the field continues to broaden, Providers and Administrators should carefully evaluate their own needs and feel confident that there are technology tools at their fingertips to help strengthen and grow their business.