View from the Top with Ron Greer, VP of Provider Services, PEN

In this issue the View From The Top takes us into the IT arena. As technology continues to move e-contracting forward, Ron Greer, Vice President of Provider Exchange Network shares an in-depth analysis of their company and solutions they offer.

Please briefly describe what PEN does.

For clarity, it is easier to begin by explaining what we aren’t. Provider Exchange Network [PEN] is not a dealer software provider; instead, we seamlessly enable electronic contracting for F&I products. PEN helps providers and administrators conduct e-commerce with their dealership partners by allowing them to interact directly within the dealer management system (DMS). Our patent pending interface sits within the DMS – it’s not a third-party dealer software – and allows providers to present and rate products, prepare contracts and deliver bookable contract data that can be electronically accepted into their systems. Providers can “integrate to one” and be done.

What is the relationship between PEN and Open Dealer Exchange? How do they work together?

Open Dealer Exchange, LLC is our parent company, founded in 2009 as a joint venture between ADP Dealer Services, Inc. and The Reynolds and Reynolds Company. PEN is a division of Open Dealer Exchange created specifically to manage the relationship between the dealer and the provider. PEN leverages shared services of the parent company such as high availability IT infrastructure and links to the Founders’ dealer systems. PEN has its own distinct branding and market strategy tailored to our audience -- providers and administrators. Open Dealer Exchange’s other division focuses on the relationship between lenders and their dealers.

What are the main benefits to a provider or administrator signing with PEN?

There are two main benefits for providers who use PEN: Increased efficiency and the ability to directly communicate with the majority of dealers in the U.S.

First, PEN offers a simplified and effective IT solution for a provider or administrator to communicate with their dealers. We offer flexible options for the provider by giving them a single integration connection that links to multiple dealer system software applications. The dealer experiences the benefits of e-contracting functions without having to purchase, learn or use specialized software.

Second, PEN works with any dealership software system that they use -- whether it’s a menu, desking, CRM or most importantly, the DMS. This simplified dealership user experience results in greater dealership acceptance of new sales cycle processes because they don’t have to change their behavior when booking a deal. And when released by ADP and Reynolds and Reynolds, PEN will offer the largest footprint of dealerships available for e-contracting in the U.S.

Do dealers sign up directly with PEN?

No, dealers do not sign up directly with us. Rather, PEN serves F&I product providers and dealer service providers [DSPs], which then gives dealers the ability to rate products, print contracts and register sold contracts, all within any PEN-enabled dealer system. PEN works like a universal connection to make multiple systems work through a single interface. For example, a dealer accesses many providers through their single system. This all happens behind the scenes and the dealer is supported by their DSP. Most dealers will never know PEN.

What are the main benefits for a dealer when their providers are connected to PEN?

Dealers will see benefits in three main areas when their providers are integrated with PEN.

First, they will immediately have an accurate presentation of available products and ratings without jumping to and from other systems. That means accurate ratings the first time specific to every deal they are managing.

Next, dealers can automatically prepare and print the contract on either plain paper or in certain applications, even electronic signature. PEN also eliminates the need for pre-printed forms or forms programming. The dealer or agent no longer has to manage stacks of paper forms or worry about which ones are accurate.

Lastly, PEN ensures automatic registration of all sold contracts so the dealer does not need to re-key the deal information. Deals are sent automatically to the provider without any extra effort from the dealer. This can help boost customer satisfaction by minimizing dealership errors throughout the process as well as ensure immediate contract registration.

Our understanding is that PEN will work directly within the Reynolds& Reynolds DMS and the ADP DMS but that it is not yet available with either. When will it be available with each DMS and which versions of each DMS will it support?

Reynolds and Reynolds is expecting to release soon in three product platforms—ERA, Power and F&I Menu. DocuPad will be released later. Release plans for Canada are to be determined.

ADP already supports over 3,000 dealers on its F&I Menu platform. Core DMS integration is being developed for the current DMS platform, Drive.

By delivering the functionality you describe into the DMS, is the intention of the DMS systems to replace the menu through the PEN connectivity? If not, when would the dealer use this as opposed to using a menu?

PEN does not replace any software function within the DMS. We simply enhance the usability of the DMS by integrating products real-time into the dealer preferred process. Today, the dealer or software provider needs to maintain offline tables of products and forms, but PEN integrates them real-time. This is the single most important part of what PEN does and the reason we were created.

Electronic menus are usually closely tied to F&I e-commerce. Presenting F&I products to a customer in a sales presentation remains an essential function of any dealership selling tool. PEN specifically supports the e-commerce functions, which can be performed within an electronic menu, desking, CRM, F&I desking, or even a Service Department application.

Basically, we partner with DSPs to handle the “heavy lifting” of provider integration which allows them [DSPs] to focus more energy on improving the overall dealership experience.

What sets PEN solutions apart from other similar technology in the marketplace?

PEN’s biggest differentiator is our patent-pending Application Programming Interface [API]. Through this we can integrate our customers into any dealership software, which is something no one else in the industry can do.

We provide a universal, managed connection to the industry that works within the dealer’s existing software. Think of us like a universal power adapter…a provider integrates to PEN and then our solution connects them to all the DSPs, menu companies and other dealer software providers in the market.

Unlike commercial e-commerce portals, PEN supports common functions without the dealer having to use multiple software applications to complete a sale. It’s much easier for the dealer and it also eliminates the need and cost to transfer data between software applications.

And unlike customized integration between a provider and a dealer system, PEN simplifies the IT efforts for the provider, and ultimately the dealer systems that partner with PEN. Our API allows for most F&I product changes to be implemented in PEN with no development on the dealer system, making provider changes much easier to manage.

What does the PEN product roadmap look like? Is there functionality planned beyond simply delivering connectivity to providers and administrators?

PEN is much more than just connectivity. As a forward looking technology leader, we drive a standard approach to e-commerce that unites software of all kinds – provider systems as well as dealer systems - behind a better experience for the dealer.

Our focus over the next few years is to solidify integration and utilization with leading providers and dealer systems. Our partnerships in place today potentially connect more than 80% of franchised dealerships in the U.S. to the majority of non-captive providers. Technology and utilization initiatives will be PEN’s focus in the immediate future as the industry continues to evolve and embrace better ways of doing things.

During the next couple years, PEN is also focusing on future product integration. We currently support capabilities like electronic (or digital) signature, but unfortunately, it is in limited use at the dealership. Other initiatives such as risk-rating of all product categories, not just service contracts, and support for online remittance and reconciliation to improve upon the existing paper based process are things PEN has on our radar. We also anticipate getting additional dealer system exposure of the PEN API to other selling opportunities in the dealership such as the service drive, Business Development Center or even in the cashier’s office. Future capability to support provider integration after the sale may also help providers increase efficiency in their administration.

What challenges on the provider side has PEN encountered and how have these challenges been overcome?

Whether the root cause is financial or simply a hesitation to change, some business challenges come from the provider’s varied acceptance of e-commerce in general. PEN helps providers incorporate e-commerce into their everyday business practices because most have an eventual goal of 100% e-contracting. Providers must accept there will be a transition period where a mix of paper and electronic processes are managed.

Some technology challenges hamper a provider’s ability to expose their products through web services. PEN has assisted several providers with overcoming these hurdles through direct IT consultation.

Where do you see e-contracting and e-commerce heading in 2012 and what new products or technology do you think will affect the creation of new solutions and improvement of those already in being used?

2012 will see e-contracting move from limited acceptance into real dealer participation and demand. It’s been trending that direction for some time now and those who have embraced it are seeing its rewards. What was once limited to participating menus and provider or commercial e-contracting portals will soon be made available to the PEN network, which has access to the leading DMS and menu systems representing more than 80% of franchised dealership sales. Dealers will become more aware that these services are available and will start expecting all of their products to be integrated into their systems.

Providers will continue to improve upon the technology they use to expose products. We will see more and more products become web rated due to the widening range of risk associated with products such as Tire and Wheel, GAP and Appearance Protection.

Providers will further migrate to their own forms building service. Rather than depending on the dealer system or even PEN to prepare a contract, leading providers are already exposing their forms web services to streamline deployment and reduce the chance of errors while printing contracts at the dealership.

Electronic contracting is no longer a great idea before its time, and the progress the industry continues to make is exciting because the technology is just waiting to become the “norm”. As PEN works with our customers, and they with their customers, to further demonstrate the benefits to those throughout the auto sales cycle, the efficiencies will increase.