A Question on DMS Integration - The StoneEagle Group Responds

Our coverage of DMS integration continues with the following questions and answers from StoneEagle’s CEO Brent Allen. Brent shares an informative and candid perspective on this integral segment of the industry.

How do you describe your products to potential customers?

It’s difficult to apply a single description to our products. StoneEagle offers several products and they are quite diverse. Our Enterprise Admin Systems include a Credit Life system and SEcureARCH, our new Service Contract Admin system. SEcureARCH is a C#.Net all service oriented architecture that we believe is the future in administration systems. Our F&I sales and reporting application, SEcureMetrics, is one of the earliest reporting programs. It has been integrated to several DMS's for over a decade and is used by thousands of dealers in the US and Canada. SEcureSalesTool is our Service Drive Sales system and can be integrated to include appointments and RO pull. It will sell multiple products, handle credit card or financing, has fully integrated e-contracting capabilities and remits sold business back to the product administrator. SEcureTransmit has been available to dealers and agents as long as our reporting tools and includes a user interface for generating a remittance register to allow any sold F&I product to be transmitted back to the administrator electronically. At NADA this year, we will be introducing Service reporting. This product will allow the dealer and servicing agent to monitor and develop very impressive income opportunities in the service department.

Traditionally, one of our most recognized services has been integration. StoneEagle has been providing integration services longer than most DMS providers have offered certified interfaces, and it is an essential part of almost all products.

When asked to describe our products, we find it just as important to describe our customer service. For the last 25 years we have made it our goal to provide the best service in the industry. We believe that the product is only as good as our ability to support it.

In the 90’s, one of our earliest business partners asked us if we could help them with administration of a product which they had been pulling from the DMS electronically. We eventually acquired their programing staff and technology as a byproduct of that initiative. Shortly thereafter, another client asked if we could produce F&I penetration reports in a timely manner by pulling data directly from the DMS. We found that creating effective F&I reports required much more effort than simply pulling data. Almost all dealers configure some part of their DMS differently. Each dealer requires “hands on” configuration for reliable results. This “hands on” knowledge eventually led to requests for properly configured data sets for many other areas of the industry. Ultimately our understanding of the inner workings of the dealership and their processes became our strongest asset for offering “best in class” service.

Which DMS providers do you work with, and what is your official status with each?

Today we offer some level of integration to the following DMS providers:

* - Dealer or DMS provider must send data to StoneEagle ** - Not currently supported, will require additional time and development charges to integrate *** - May be possible but will require additional time and development charges ($) - Dealer may/will incur extra charges for setup, field switches or both

Considering the changes taking place in the industry today, this list is subject to change.

How do you push and pull data, and why would your solution be better than others?

Certainly we do consider the exact technology of how we push or pull data proprietary, but we do offer both functionalities to a limited number of DMS systems. Pushing data is a very tricky business. Very few companies will do it, and very few products take advantage of it. Improper pushing to the DMS can cause costly errors to the dealer. After a decade, StoneEagle has had no reported errors in our pushing process. We believe our success and longevity coupled with the innovative solutions we provide make us stand out above most other competitors.

There seems to be building controversy about DMS integration – How do you see the industry today, and where do you think it will be in the next five years?

In a previous question I pointed out that third party integration itself actually out dates the integration certification concept. Today, advancements in technology and security have caused a general movement among all DMS providers to create secure standard interface processes that require some sort of fee for access. From there, DMS providers of all sizes seem to be in one of two camps regarding integration to their systems. One camp sees product and service provider offerings as enhancements to their systems. They certainly don’t want to see an outside company cannibalize a product that they offer, but they also seem to understand that dealers will never see all services the same. These DMS providers can create reasonably priced integration tools that create a revenue stream but also stimulate the growth of technology from smaller more agile “niche product” companies. The second camp is much more guarded. They see any competing technology as a potential threat to their control of the dealer. These providers are typically difficult to deal with and offer cost prohibitive pricing for their integration tools.

The controversy today revolves around DMS providers moving to a “certified only” model where any other outside access is branded as dangerous and aggressively discouraged. Telling a dealer what he can or cannot do with his data is one issue, but forcing him to require certification is a much bigger issue for the dealer than the product providers themselves. Even a small dealer is doing business with as many as five outside product vendors. If all five are forced to certify their products and pay (for an example) $100 in fees, those fees are inevitably passed on to the dealer. At that point, the dealer is faced with not just one fee, but five fees for the same service now costing $500. The model needs to change. The dealer should be able to subscribe to the service and allow the vendors access to it. Product and service providers can compete on the merit of their systems, not the cost of their integration.

One way or the other, we think non-certified interfaces will eventually disappear over the next several years. The cost of supporting non-certified technology is going up, competition from other products is increasing, and service oriented system architecture is definitely becoming the accepted model. We just hope that DMS providers will open their systems in a way that is reasonably economical and creates a “best man wins” environment for product providers.

We don’t want to discount the issue of security. It is very important that dealers recognize the importance of their customers private information, and that it be safeguarded properly. There is a need in this industry to make sure that vendors are following all governmental and ethical rules concerning data. Proper service agreements and contractual obligations are essential. Having dealers, DMS providers and vendors work together to establish standards in this area would benefit all players without stifling business, but most importantly, it would protect the customer.

How do your current clients feel about the changes in integration?

Most of them simply feel blackmailed. They feel like they are being cornered into a position where they have to pay fees for services that have worked well for years and are now just being taken advantage of simply because the opportunity was there. Most are happy to pay for advances in technology that increase their ability to sell product. In this case, they feel like it’s simply another expense that must be passed on to the dealer who will then pass it on to the customer. Remember, we are not talking about one point of integration. We’re talking about five, 10, even 15 points of integration that can ultimately mean hundreds of dollars to the consumer.

How are you planning to re-invent your products and services to adapt for the future?

For StoneEagle, planning for the future is and always has been important. As a family owned business, we must rely on re-investing annual profits in R&D for future product and service planning. We have been preparing for the change in integration certification for a few years now. We have been re-developing old products and inventing new ones in order to capture other segments of the auto dealer market. We have certified our products with various DMS providers and are in the process of doing so with others. Re-focusing some of our efforts and resources from integration will mean terrific advances in our product offerings over the next few years.