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Part 1 - How To Choose the Best DMS For You – 2018 Edition


By Richard Hudson, Managing Partner, Ignite Consulting Partners


There seems to be a lot of chatter in the industry about switching DMS systems.  Have you thought about switching DMS systems?  Having worked with hundreds of businesses who converted to another DMS, I know there are a lot of questions that need to be asked.  Before you can begin to explore your options, you need to have a comprehensive plan.  Having work for multiple DMS providers over 8 years I was involved in hundreds of conversions.  Mostly I saw it from the support side.  I feel like it's a unique perspective because when conversions to a new DMS don't go well, support hears all the details. 

We also heard a lot of good things.  When collectors and other employees would call in and tell you how much better the software was in their old software because of all these additional features that automated a lot of the tasks that they were doing manually previously.  I was also fortunate enough to work directly with the implementation team on several of those conversions.  The ones that went well did so because of good planning and making the right decision.  The companies knew exactly what they were getting with the software because they done their due diligence before they even decided.

The goal of this article is not to tell you what to think but give you some of the many things you should be thinking about.  Ultimately, you are the one that is going to have to live with your decision.  I just want it to be the best one possible.

Make a Decision

There are many different reasons businesses switch their origination and servicing platforms.  Switching DMS systems is a costly process, both in terms of money and resources.  You need to be able to justify your decision to others within the company.  A lot of what I hear are minor complaints about certain aspects of the platform and don’t always rise to the level of deciding to switch.

1.   Scalability - One of the easiest decisions to make regarding whether to switch or not is when your existing platform is not able to accommodate your requirements due to growth.If the system is not able to handle the amount of data, number of transaction, number of users, etc. you really don’t have a choice but to move.

 2.  Functionality – Another easy decision to make if changes in the business require additional functionality.  Examples of this are adding new locations, adding an RFC, increasing number of employees, and therefore users.

3.  Cost - For some dealers, cost is an issue.  It’s not that you can’t pay the existing bill but you may not feel that you are getting what you pay form.  You may have been on your current system for many years.  The software market is constantly being improved and functionality added.

4.  Stability – Over the years, I have seen issues with stability and performance on varying platforms.  Most of the time, the issues are resolved quickly by providers.  However, if it becomes a frequent enough issue, it can hamper your operational efficiency.


Building a Technology Decision Matrix

Today, I am focusing on switching DMS systems but this kind of analysis should be used when deciding on any technology you are thinking of adopting.

So, what is a technology matrix?  - Also known as Grid Analysis, can simply be a spreadsheet separated by area or functionality and start listing everything that your current system does that you want the new system to do.  Next, add all the features or workflows you would like to see the new system do that you currently can’t.  Remember, if you are going to dedicate the resources to go through a change, the new system should at least be better than the old one.  Also keep in mind that building a list of options to compare is the most labor-intensive part of the analysis other than comparing the systems.

When should it be used?  When a list of options must be narrowed to one choice and when the decision must be made based on several criteria.

  1. Decision Matrix Analysis works by getting you to list your options as rows on a table, and the factors you need consider as columns.  You then score each option/factor combination, weight this score by the relative importance of the factor and add these scores up to give an overall score for each option.

  2. Include everyone in the company that uses the software in any way.  Brainstorm the evaluation criteria appropriate to the situation.  You can break the workload out by asking the different departments to come up with their own criteria first and then aggregate the lists.  The worst outcomes I have seen in switching DMS systems is when someone made the decision without involving everyone that uses the software.   When I say everyone, I mean everyone.  From collections to sales to accounting.  And not just the managers, you need to get the buy in from the people that are going to be using it on a day to day.

  3. Reach out to prospective vendors and schedule the demos.  Fill out the results for each company you are interested in and analyze the results.

  4. Trust your intuition – I have done this type of analysis with technology many times over the years and occasionally, the numbers will go against your intuition.  Something just doesn’t feel right about the outcome.  Usually, in those cases, it’s good to go back and analyze the weights you assigned to the requirements.  In your initial estimate, you may have undervalued or overvalued something that, in hindsight, should have been more or less.

  5. Once you’ve compiled your data, you should have some additional questions.  Prepare lists of additional questions you have or features you want to see and reach out to the prospective vendors.  It’s important that no stone is left unturned.  This is a huge commitment and I can’t state enough how important it is that you get it right.

Online Payment Systems

Do you have recurring payments?  Will those transfer?  Do you have credit card or ACH information?  Will that be able to be transferred?  Is the company PCI certified at the level and in the group that is appropriate to them?  Are there any fees associated with payments?  Do you have the ability to send SMS messages directly from the DMS?  Do they have an IVR option?

  1. Recurring Functionality – What is the full capability of the recurring payment feature?  Are you allowed to setup multiple payment methods on the same recurring schedule (split the payment)?  If there are multiple debtors on an account, would they be able to split the payment between them?  Another feature is the ability to schedule a recurring payment for more than regular payment amount.  Also, I would ask if you are able to schedule recurring payments on side notes that have been added to the account.

  2. Customer Facing - does the DMS have a customer-facing portal where they can service their own accounts?  This is really important and it's not just the ability for customers to take a payment.  It's also important that they can get information about their account such as account balance amount due next payment to pay off and Cetera.  I did a study with a customer a few years ago to find out just how much a single call Cost the company on average to take a payment from a customer.  He added up the salaries systems that payment call cost about $12.  This was the area of the software where they gained the most efficiencies as a business.  On top of just taking payment when you add in all the other times a customer asked you know what the payoff was or how fast do they are the cost increase significantly.

  3. Batch or Real Time – Some systems have the ability to charge the credit card real time, as it is taken while others rely on batch payment processing which means you getting the money could be delayed.  Customers don't like to wait for payments to be charged or applied to their account and dealers don't like to wait to get their money.

  4. SMS – First find out the cost and figure out what that would be based on your current volume or projected volume if you don’t currently have the functionality.  Also, do you have the ability to send free text SMS messages?  Is there a way to restrict this to pre-made templates? 

  5. IVR – Again, similar to SMS, you would need to know what costs are associated with this feature ahead of time.  With both the ivy are in the SMS those are two scenarios that I have seen dealers grossly underestimated the cost of them by switching to a new provider.

  6. Payment Fees – You need to ask if there are any fees associated with using the product.

  7. Limited to Specific Vendors

    1. SMS

    2. IVR

    3. Payment Processor/Gateways

  8. Remember, even if you pick the right DMS, if you are forced into using their preferred vendors you could find their service may not meet your expectation.  And it's not just your current provider.  What if you want to switch providers sometime down the road what do those constraints look like?  I see dealers enter into agreements with a new bank for a line of credit and we're able to transfer their credit card processing to that bank at significant savings on the amount they were getting charged only to find out that the system they switch to last year can only accommodate two providers.



Collections and Servicing

How do your systems queue accounts today?  What are you queuing options in the new system?   Can the queueing accommodate what you are doing today?  How do you track collectors’ performance and calculate compensation?  Can you get metrics in the same way in the new system?

  1. Define Your Workflow – First you have to define and document your workflow.   You may not realize it the number of workarounds and activities you are doing outside of your DMS due to missing functionality.  One thing to think about if you are going to make the switch is to take a deep look into why you are doing things the way you are.  Other systems may provide you the opportunities to improve your current processes.  I guess my point is don’t think the new system has to do it the same way as the old one if the newer system just has a better way.​

  2. Reporting and Compensation/Bonus Structures – Does the system have the ability to report in a way that can accommodate your current compensation policy?  Similar to the workflow, could you consider a better compensation policy due to additional features in the platforms you are looking at? 

  3. Letters –  letters are critical part of the collectors’ day today activity and the overall activity of your business.  So, I would ask if the letters in the system are Consolidated in a way that they can be accessed from all the modules for different modules have different letters?

  4. Email and SMS Integration – Collectors today communicate by more than just phone.  From a compliance perspective, I feel that any communication channel that a collector uses to reach customers’ needs to be automated in a way that notates the account with what was sent.  Far too often I've seen scenarios where text messages or emails have been sent buy collector to a customer and The Collector failed to copy and paste the message manually into the collections notes.  This can create a situation where the next person who touches the account is missing a key piece of information or communication between your company and that customer.  Secondly, you're also depending on a person to never make a mistake when we know that automating it through technology is a much more reliable long-term solution.

Reporting and Analytics

One of the best ways to determine if the reporting platform in a DMS will meet your needs is to ask how much work can be done in the system and how much will have to be done in an outside software like Excel.

1. Does the software have custom reports?  How easy is it to create reports?  Will docs be able to be transferred?  Will you have the ability to create them prior to the conversion so that they are ready on day one?  Do you have a plan and dedicated resources to ensure that?

2.  Can they be scheduled – Most DMS platforms have the ability to schedule reports to be created and either archived or distributed to the dealer automatically. 

3.  What formats – different people require different types of reports.  Make a list of the types of output each platform supports.  Examples include Excel, Word, HTML, comma separated values.  Can everyone in your organization get what they need?

4.  Email – Can the reports be emailed automatically?  Can they be sent to multiple users or just one?

5.  FTP – There are several vendor integrations that require a regular batch file (csv) be sent to an FTP site.  Does your system have the ability to do that automatically?

6.  Are reports stored automatically?  – Systems differ in this ability.  Some systems give you the ability to store the report automatically when it is run within the system while others you have to run and save locally?

7.  Can you customize the reports?  – Every dealer has different needs and I have not met many that couldn’t benefit from a platform that allows you to customize your reports.

8.  How easy is it to do customization and setups?  –Platforms that provide some sort of report customization options vary widely in their ease of use.  Since your business runs around your reporting data, it would be a good idea during the mock conversion period to really test out this feature and make sure that you can get the data you want, the way you want it.

9.  Do you have existing reports that will need to be moved?  Are you able to migrate them before the go live date?

10. Any Time Reporting – Almost all systems can run historical data on things like payments received or collector calls made on a day in the past.  But can it tell you how many cars were on the lot on the last day of 2017?  What about your receivable balance at the end of a reporting period?  Another one is delinquency on given day.  Without a report that you had run on that date, it can sometime be difficult to “back in” to those numbers.

Forms and Documents

Typically, when you need a form updated or created you need it now. Often it may be a form that's required for you to do business with another third party vendor or with another lender.


  1. Plain Paper Forms Available – Does the DMS have all of the forms that you use today?  Provide them with a list of all of your current documents to make sure they can accommodate you.

  2. Frequency of Updates – Normally, the DMS will work with multiple forms provider to ensure they receive notification when forms are updated.  Who is the point person for that at the company?  What does that communication process look like?

  3. State Forms – Does the DMS automatically update state forms as new ones become available or do they wait on the dealer to submit for programming?

  4. Number of Forms Allowed During Conversion – Is there a limit to the number of custom forms and documents that can be programmed during the conversion?  Is it enough that you can do business on day 1?

  5. Ability to Program Own Forms/Letters – Many DMS platforms allow you to program and make changes to your own forms and letters.  If it is provided, how easy is it to use?

  6. Lead Time for Custom Forms – Once you are a customer, what is the average lead time from request to deployment?

Technical Support

In my experience, good technical support is critical to your success.  Especially at first, you're going to need them! 

  1. Hours -.  What are the hours of support?  Do they work the weekends?  Do the hours overlap with the hours you do business?  Sometimes, employees have to work outside the normal business hours, such as at month end.  Does the provider have an emergency number you can call in that situation?

  2. Channels – What channels does the support team have to communicate with you?  Some good examples would be chat, email, and phone.   I’ve found over the years that some questions are best asked through different channels.  A good example is it password reset.  why would you want to wait on hold to get a person to reset a password when through chat you can communicate it very easily.  Emails are best when you can Define your problem very clearly and what you expect the resolution to be and if it's something that you don't need handled immediately.  Phone calls are usually best when you don't understand what's going on in the issues seems complex.  I would consider it a plus the provider had all three channels available.  Another plus for a support system to have is an online knowledge base of some kind where you can find answers to questions yourself.  Sometimes, if a question is simple, it’s much easier to look it up yourself than wait to speak with someone.

  3. Metrics – I used to give provide information to our sales team to share with prospective clients.  Some of the best metrics are average time answer for phone and chat.  By the time you need support, you are already having a problem.  Waiting for help just compounds that.

  4. Tenure - Ask the vendor questions about the support team itself.  Things I would want to know would be how long have they been supporting the product.  What's their background as well I mean do any of them have other experience in the automotive space?  Having worked with support teams for many years I find that experience in that area helps him understand the business of their customers which is often times as important if not more important than understand in the software they're supporting.  If you don't know what or why someone's trying to do in the software it's hard to really give them the best answer.

  5. Escalation Process – Sometimes the front-line support team members aren’t able to resolve the issue immediately and it needs to be escalated to a more senior member of the team or another department.  Ask them to explain this process.

  6. Customer Satisfaction – Does the company track customer satisfaction with its agents?  This shows that the company cares about getting feedback from its customers.

Stability and Reliability

When using a cloud hosted solution, one of the worst nightmares for a dealer is to have a complete or partial outage of their DMS system.  You are powerless to do anything.  It prevents payments, sales, and most of all makes it impossible to service your customers which can tarnish your hard-earned reputation.  Even performance issues can cause delays in your ability to take payments or complete sales in a timely fashion.

I want to add that NO hosted solutions are immune to outages.  It happens to the biggest, most sophisticated providers.  If you think about 2017, you had outages in systems at American Airlines, Facebook, and IBM.  There are an infinite number of ways that outages happen, not always the fault of your provider. 

  • Sometimes the provider has their data hosted by a third party such as IBM, Amazon, or Microsoft and they are having issues.

  • Sometimes, bad code is deployed that interferes with the normal operation of the software.  Every provider typically tests their software prior to deployment but sometimes you don’t see the issues until it’s production.

  • People are fallible.  Often, something as simple as a human error can impact an entire environment. 

My point is just that issues do happen to everyone and just because it’s happened isn’t necessarily an indictment of an entire provider.

  1. Uptime – Most providers will say that they have 99% or higher uptime.  Sounds pretty good, doesn’t it?  Think about this.  There are 8760 hours in a year.  1 percent of that is 87.6 hours.  Doesn’t sound so good when you look at it that way.  Ask the providers about their uptime metrics but also talk to other people using the platform that you know.

  2. Outages or Performance Issues – Ask the vendor the number of incidents they have had over the last 6 months and how it impacted their customers.

  3. Infrastructure – In a hosted environment it's important to understand what the backbone of the environment of the vendor looks like.  There can be several areas that you want to look at.  First does the vendor have geographical redundancy?  This may not be a priority for you necessarily but in the instance there is an issue with the particular Data Center it would definitely be a plus to have this option.  Over the years I've seen a lot of issues that geographical redundancy would have resolved.  I've seen an eight-hour outage caused by an electrician who cut the wrong power cable.  I've seen near outages caused because of a DDOS attack on a particular Data Center.  Another thing to consider is the data storage.  Does the provider have failover capabilities in the instance that the server where your data resides is having an issue?

  4. Response Plans - Last but definitely not least is a response plan that the provider has in place in the instance of an issue.  First question is do they have a written response plan 2.  Second question would be how our customers notified about the issues?  Do you have to call their support to find out what's going on or do they have a message board or email that goes out to their customer base explaining what's going on.  As I said before these things happen and it's not what happens that's the issue it's how the vendor response to it.  You also might want to ask if they have a root cause analysis plan in place.  You want to ensure that they don't just patch the issue and move on instead of acknowledging and correcting structural issues either with their internal policies or with their environment.


What types of security does the company have to safeguard your data? as we've seen in several high-profile data breaches lately no one is immune from the theft of data.  And let's be honest, DMs systems house thousands of tens of thousands even hundreds of thousands of records of personally identifiable information about your customers.  While 100% protection is never going to be a guarantee if the provider has the proper protocols in place you can go a long way to safeguard in that data period in almost all the public breaches that we've been hearing about it's always due to a vulnerability that could have been prevented.  There's several different areas about security that you should ask your provider.

  1. Infrastructure Regularly Updated - So regarding the updated infrastructure I'm really just talking about security patches and updates to servers that your data resides on.  But also ask is there is a Point person that's responsible for security.  Automatic updates Kinsale for lots of different reasons and leave systems exposed.

  2. Internal Employee Training – I don’t just mean the infrastructure but employees as well.  Employees are typically the weakest link in security.  Are employees trained regularly on security issues?  Are random phishing tests conducted? 

  3. Separation Policy - Do they have a formal written separation policy with regards to cutting off employee access?  Their IT should maintain a list of all employees and every system they have access to.  When an employee separates from the company, either voluntarily or involuntarily, who is responsible for disabling all access.

  4. Physical Security - What kind of security does the physical facility have?  Is there badge access to the building?  Where is the infrastructure housed?  What type of security is employed at that location? 

  5. Security Testing - Another good question would be to ask about their security testing processes.  In a good environment testing should be and ongoing process.

  6. Written Incident Response Plan - Does the company have an incident response plan for security breaches to contact and notify customers of the issue?  How often is that plan reviewed and updated?  How frequently do the employees responsible for the execution of the plan review the process to ensure they know what to do?


How a new provider handles the actual conversion to the new platform is one of the most important things to understand.  As part of the process, you need to understand the costs associated with the conversion once you have decided on a new provider.  Depending on the provider and the contract you signed with them, you may have to pay a fee to acquire it.  I’ve always been of the opinion that your data belongs to you but it often depends on what’s in your contract.  Mock conversions are critical to seeing how your data will actually look and feel in the new system.  It’s one thing to see a demonstration, and it’s another to your data in action.

  1. Training – Training is the most critical aspect of the conversion process.  Depending on the complexity of your business and how much you’re willing to pay, you may need onsite training.  In my experience, this is a no brainer.  Online training is great for simple operations in areas that are specific to individual job duties.  For more complex businesses, there is no comparison to having someone onsite during the first week you are on the new product.  Usually, a mix of both is the best option.  The additional cost is worth for several reasons.  First, there is the consideration of adoption by your employees.  If they struggle to use the software, they can be outright negative about the conversion which can lead to bad blood in a company.  Second, you can have inefficiencies in departments because of it which means potentially fewer dollars collected and a slowdown in the sales process.    Last, it can actually have an impact on customer service.  No customer wants the sales cycle to last an extra hour because their sales rep is trying to figure out the new software and the last thing a customer wants to hear on the phone is that there is a delay because you just switched to a new software.


There are literally hundreds of third parties out there in the automotive space and they provide important functionality that is often outside of the scope of a DMS.

Does the new system support all the integrations with your current vendors?  Is the integration the same, better, or worse?  Many companies have ‘integrations’ but some are much better than others.  Ensure that how it works is demonstrated to you.  I just say that because I've seen some good Integrations over the years on different platforms where it was easy to use and was a full integration.  I've also seen integrations that were clunky or only got the data over halfway there required workarounds Etc.  This is a key point at understand here is it's not that they have an integration it's them showing you how it works is very important to see the workflow and exactly what it's going to look like for your users before you get on the system.  Sometimes, a DMS provider only integrates with just a few vendors in a particular area.  Find out how many vendors they integrate with and what, if any, fees those vendors charge.  You would hate to have the functionality but locked in to a vendor that was cost prohibitive.   Additionally, you would not want to have to switch outside vendors if you are happy with what you have.

Vendor Due Diligence

One of the things we help our customers with here at ignite is vendor due diligence.  And by vendor due diligence I mean really taking a hard look at the company itself and its internal policies and procedures.  Typically, when we advise customers on how to approach due diligence you always start with the question of how important this relationship is going to be number one and number two what's my exposure.  And by exposure, I mean is this Vendor going to have access too sensitive information about either my business or my customers or what would be the impact on my business if there was an issue?  So, with a DMS system the answers is “Absolutely!”

1.  General Information - Good general questions to ask about the company or things like how many customers do they have and how long they been in business.  Are they looking forward with regards to development of their product?   What's their plan with their current software?  I mean do they have new software and what's their 3-2 in A Five-Year Plan.

2.  Contract -  You’ll be required to sign with the DMS provider should be who owns your data, space what's the responsibility for you as a dealer if a problem with the software potentially causes you regulatory issues?  Lots of companies out there that provide services in the cloud will negotiate on some of those positions where is some of them you're just going to have to live with but it never hurts to ask.

3.  Internal Training Program – How does internal training for their support department work?  Is it consistent?  Are new agents allowed to take questions from customers prior to completing their training?  How do they, as a company, determine if an employee is ready to speak with customers?  Do they take standardized tests?

4.  Data Privacy Considerations - Privacy considerations I bring up just because it's important to understand if they do due diligence with companies that they share data with.  Ask them what their privacy policy is.  Do they share any of your or your customer’s information with anyone you aren’t aware of?  Obviously, they have to share with vendors that you do business with to maintain normal operations and that's fine but it's good to ask if there any privacy concerns outside of that that you should know about.

5.  Complaint Handling - Regarding the complaint policy truly important to know if they have that and what that is.  Any good company should have a formal complaint policy and have someone responsible for overseeing the day-to-day operation of it.  Ask them what happens if I make a complaint happens to that who's responsible for it?  Is there someone at the company responsible for monthly or quarterly reporting to the owners or the board of directors regarding the types of complaints they're getting?  Good complaint management is at the heart of making a business better.

6.  Talk to Existing Customers - Talk to some of their existing customers who aren’t referred by the company themselves.

7.  Will you have a primary contact?  - One of the things I've heard over the years from dealers and finance companies is they really like having a single contact at the DMS provider that is assigned to them knows the software and knows their business.




Finally, finding a DMs provider is a long-term process it is critical to your success as a business.  You don't want this to be a short-term relationship because you didn't ask all the right questions up front.  Any provider that you reach out to should recognize and understand the reason you're asking all these questions.  If they want your business they'll be happy to accommodate you.  Based on your business needs, not every platform is right for every dealer and that’s ok. 

Due to the limit on time, I didn’t have the ability to go through everything you might need to think about.  However, if I can leave you with one point, it is that you need to treat any switch like a priority project for your company.  Since we sent out the email about this webinar, I have had several calls where I got pushed to say which system out there was the best.   While we can help a customer through the project of determining which is best for you, until we go through the discovery exercise, I would argue you really don’t know.


Which is why I will end with the thought below.

The right question is not “Which DMS is the best?”  It’s “Which DMS is best for you…”

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