Running a business is not easy. There are profitability and cashflow concerns to manage, personnel issues to address, customer satisfaction considerations to be aware of, and supply chain challenges to overcome. On top of these, entrepreneurs must deal with things over which they have no control, such as weather or global economic issues.

One key to ensuring business success, particularly for an ag equipment dealership, is effective processes. These must address everything from finding new customers, to actually selling them something, to accepting their payment, to delivering what they bought, to providing them service and parts, to reminding them of upcoming service intervals, to reporting on profitability to bankers and stakeholders. While there are almost as many ways of doing this as there are SKUs in a parts department, successful ag equipment dealers have chosen a particular approach: implementing a dealer management system (DMS).

Knocking Down Silos

A DMS is a software tool — most often cloud-based these days — deployed across the entire dealership and all of its locations. It is unique in that it is able to serve the specific needs of each key department and/or function in a dealership — such as procurement, inventory management, sales and marketing, service, parts and accounting — while uniting them under a single technological umbrella. 

Connecting these disparate groups is key because it allows them to communicate and work together rather than permitting each to function in its own figurative silo — a phenomenon that limits the dealership’s ability to effectively manage new and ongoing customer relationships.

“One of the biggest challenges dealers are facing is the siloing effect inside the dealership as they grow,” says Jason Hoult, president of DMS provider Anvil App Works, Minneapolis, Minn. “Sales does their thing, parts does their thing, and it’s really hard to see that combined picture and what is actually going on with my customer.”

In this way, a DMS can standardize processes across the organization, improving efficiency and ensuring everyone is “rowing in the same direction.” More importantly, though, it can uncover previously unknown information about the entire organization — such as sales trends, process inefficiencies and opportunities for new business — that leaders throughout the dealership can use to delight customers and propel the company forward.

Getting to that pot of gold at the end of the DMS rainbow, however, can be a significant challenge, as implementing a DMS temporarily disrupts virtually every aspect of a dealership’s business. If done poorly, it can cause more harm than good. For that reason, it’s critical that dealerships make the best decisions in evaluating and choosing a DMS. Doing so dramatically reduces the possibility of things going sideways during implementation and throughout the long term.

Recruiting the Right Team

Selecting the right DMS is not a one-person job. Instead, it requires care and deliberation from an entire team of cross-functional personnel working efficiently and effectively on behalf of the entire dealership organization.

Karla Mannhardt, business manager for Johnson Tractor, Eau Claire, Wis., was part of the team that in 2018 evaluated a new DMS for Value Implement, which Johnson Tractor acquired in July 2022. She says that when considering a new DMS, it’s crucial for the organization to assemble a team to evaluate DMS solutions — one that represents functions across the dealership. That’s because different job functions have different requirements and unique perspectives.

“If someone is looking to change systems, one person can’t know the entirety of what the business really needs out of a business system,” she says. “I think it’s incredibly important to bring the core team together that can really ask those pertinent questions. ‘OK, I hear it does this, but how do you handle that?’ And that might not be something that I would ask because it’s not in my daily work.”

Mannhardt says the team of which she was a part was relatively large because it represented a cross-section of the dealership. 

“We actually had a fairly substantial group because we had salespeople, we had parts people, we had our service desk, and we even had a service technician. We had our accounting people — we had somebody who specializes in AP (accounts payable) and someone who’s more in the general ledger in financials. We had a sales admin who has to actually be able to receive inventory and run the sales.”

When it comes to the dealership team working on the DMS selection, Shane Waldemar, general manager for Dealer Information Systems Corp., Bellingham, Wash., providers of the DIS dealer management system, is “a bigger fan of a larger group.”

He says the group should contain “the decision maker, owner or dealer principal,” explaining that those are essentially identical terms that dealerships use differently to identify its most senior leader. “The CFO or accounting manager absolutely is critical in this. They have to be present. The service manager has to be present, the parts manager has to be present, and if they have an IT infrastructure in place or team in place, their IT manager.”

While Waldemar emphasizes that these personnel are key members of the team, he recommends expanding the team even further.

“From there, I want to know, are there retirements coming, are there sons or daughters involved from the decision maker/owner/dealer principal standpoint? Then is there anybody else that the business would see as a key stakeholder? Do they have a third-party consultant or do they have a business operations person? Or sometimes they’ll have a sales manager that they’ll want to include.”

Mark Grimes, vice president of sales for Wright Implement, Owensboro, Ky., echoes Mannhardt and Waldemar’s advice. After participating in Wright Implement’s selection and implementation of Anvil App Works, he saw that the IT department offered another critical service: putting technical information into layperson’s terms. 

“When they [Anvil App Works] talked the lingo that a common person like me might not understand, they [the IT group] provided the translation,” Grimes says. He adds that when reviewing system capabilities and discussing pros and cons, the IT team was pivotal in being “able to tell me in terms I can understand.”

Know Why You’re Making a Change

Given the potential disruption the entire dealership will face while transitioning to a new DMS solution, it’s important to know why you want to do it in the first place. John Bolling, former sales veteran for CDK Global Heavy Equipment and now vice president of sales for e-Emphasys Technologies of Cary, N.C. following its merger with CDK (see sidebar below), says he helps dealerships understand why they want to implement a new DMS by asking them what business problems they would solve if they could just wave a magic wand and make those problems go away.

“And they’ll sit back in their chair — and I’ve had people sit there for 2 seconds, I’ve had people sit there for almost 5 minutes — and say, ‘You know, that’s a great question. These are the 3-5 or 4-6 things that I would really fix tomorrow if I could.’ I said, ‘That’s a great start.’ And what it did is got them to think about why are they doing this — what do they want to accomplish.”

Waldemar says he encourages DMS teams to do some introspection about their motives in adopting a new DMS. 

“First and foremost, they have to be honest with themselves. And by that I mean two things. One, why are you leaving what you’re on? What pain points do you currently encounter that are causing you so much heartache that you’re willing to spend the money and time that makes you want to leave? And I want that clearly defined from them. Number two is, what are you looking for in your new DMS provider? So what’s the one or two things that you have to have?”

A DMS to Delight Customers & Employees

One thing a DMS can help a dealership do is improve the customer experience. Bolling says he often asks dealers to “just think about what your customer’s been asking you for” when considering a DMS solution.

“It’s really about the customer experience,” he says. “I ask them that question today: what are your customers telling you that they need from you? And dealers sort of know, but they don’t think about it. They’re like, ‘Well, this guy told me he wished he could buy parts through a mobile app while he is going through the field planting. I wonder if the rest of my customers do that.’”

Thinking about the expectations you have for your employees as a result of the new DMS is also part of the thought process.

“It’s more common to think about your customers, but your employee expectations are just as important because they’re not tied to a desk anymore,” Hoult says. “They’re not hooked up to that computer monitor, and that’s the only thing that they do. They are out on the lot. They’re out in the truck. They’re out in the field. They’re out in the customer’s driveway. And can they access what they need to access when it’s there? So is it mobile-friendly or even a mobile-first type environment? Is it iPad- or tablet-capable? Do I have to be on a VPN to access it? Those types of things. Does the system work where I work?”

Get Everyone Else to Buy In

Change is difficult for most employees to embrace, particularly those who have become accustomed to a particular way of doing things. Jesse Straeter, CEO of New Holland Rochester, Rochester, Ind., recalled the difficulties his father and stepmother had adjusting after switching to a CDK dealer management system (called PFW at that time).

“I was in middle school at the time, but I was still around the dealership,” he says, “and I can remember pretty vividly my dad and then my stepmom Melinda, who was and is our head of accounting; she was just in tears over the whole transition because it was just such a difficult process to go through.”

Click to enlarge

 In the October 2018 Harvard Business Review article “Don’t Just Tell Employees Organizational Changes Are Coming — Explain Why,” author Morgan Galbraith cited a survey of more than 500,000 U.S. employees that indicated nearly a third of them didn’t understand the reasons why many of the changes they were experiencing at work were happening. Furthermore, Galbraith says organizational leaders are wrong to assume their employees intrinsically understand why changes are occurring. Instead, it’s vital to explain both the changes and why they are important to the organization.

“A lot of technology rollouts fail not because the dealer couldn’t do it — it was a change management thing,” Hoult says. “They were trying to change too fast. They didn’t plan on how to get from here to there. They just said, ‘Start doing it this way.’” Hoult adds that to be successful, dealers can’t immediately expect employees to use a new system they “don’t have the skillset, the memory, the understanding” to be able to use.

Getting employee buy-in means effectively communicating the benefits the DMS will bring, specifically helping each employee understand “what’s in it for me.” Wright Implement helped secure buy-in using this approach.

“We were opening four applications for a sales rep to do their job,” Grimes says. “And we were trying to get it to the point where they’d open one and do everything and be able to communicate and track the communication between multiple dealerships. Sometimes you sell equipment at different locations and not being there, you’ve gotta communicate things. Having a record for that and having that as a central point was the key to get some of those who weren’t really against the change but didn’t understand it. Everybody nodded their head when they said, ‘Yeah, I’d like to no longer log into this program or this program. I can do it all here.’ That made it work.”

Hoult says that apart from the DMS team, it’s necessary for an organization to have a champion to help foster acceptance of the new tool throughout the dealership. “You gotta have that champion who will be the leader when it’s hard — the fitness coach when you’re wanting to eat pizza. And if you don’t have it, or you don’t have any visibility to that, or nobody’s willing to take that up, you’ve got a low chance of success.”

Bolling also talks about the value of having DMS champions. “If we have a champion in every branch that understands how the system’s been set up, and how they’re going to use it, and how the workflow’s going to make them more efficient, then they’ll help the people that are struggling with change.”

Trever Schatschneider, senior manager, Dealer Business Systems for Kubota, Grapevine, Texas, says an early demonstration by the DMS provider to show employees how they will be using it in their specific roles on a day-to-day basis is a good way to get buy-in.

“The DBS is going to show you all the fun stuff — the dashboards and the reporting and the apps. But I also say the other thing is, the key when you’re demonstrating this, is actually look at the basic functions. Because as a dealer principal, great, you can see the report that shows you what your fill rates or your turn rates are. But if your parts people or your accountants or your payables people absolutely hate the system, it’s never going to work out well.”

Think About Growth

The consolidation of small dealerships into larger ones continues to be a trend in the ag equipment industry. In the 2023 Big Dealer Report published recently by Ag Equipment Intelligence, another long-time trend continued: big dealers — those with 5 or more locations — buying other big dealers. Once limited primarily to John Deere dealers, 4 CNH Industrial big dealers bought other big dealers since April 2022.

Bringing new locations into the fold means integrating them with your existing DMS solution. Waldemar asks dealers about if, when and how they see themselves expanding.

“I want to know their growth plans and their strategy,” he says. “Are they looking to acquire or are they looking to organically grow the business? And sometimes it’s a combination of both, which is even better. Sometimes we have dealers who are not interested in growth, and that’s OK, but they want to maintain what they have and they want to organically grow their business.”

While potentially adding rooftops is part of the reason for thinking about growth, the other aspect is employees.

“I want to know how many employees they have because those employees are going to be using our business systems,” Waldemar says. “So I want to know how many people in parts, how many people in service, how many people in sales, how many locations. Because that impacts how our software is going to be used and how it’s going to be provided and how it’s going to be supported and how we think about building for the future.”

Chanse McGuire, vice president of sales for Texarkana, Texas-based Basic Software Systems, says conversations about growth are important to have, as there are misconceptions among dealers that they will reach a size at which their DMS solution can no longer serve their needs. 

 “They think to themselves, well, we’ve outgrown you because we were good when we were 3 locations, and now we’re 12, and you know, you guys just aren’t going to be able to handle that. Well, that’s not the truth.” McGuire addresses scaling concerns by meeting with the dealer.

Uncovering Key Insights

By virtue of its ability to connect all key functions at a dealership, a DMS can mine dealership data to provide unprecedented insights into how the organization is operating. These can result in everything from process improvements to “Aha!” moments about how to grow the business. As such, the kinds of insights you’d like to know about your business should be described in the request for proposal (RFP). 

According to Hoult, this can be a challenge for some dealers because while they know what insights can be gathered, many remain skeptical about gathering them for their own businesses. That, however, is the power of the DMS.

“They’ve started pulling reports together, but they’re still in that manual stage,” he says. “They haven’t gotten really good at it. They haven’t been able to scale it. But they are at the point that they believe that it’s necessary, but it’s still very hard and burdensome for them. And that’s where technology tends to shine — when you have a really solid process and you kind of know what you’re trying to do, but technology can just make it better and easier.”

Pick the Right Partners for the Pitch

With many DMS providers to choose from, it can be confusing knowing which ones to contact to pitch their solutions. It’s wise to start with the DMS providers, and ask how they interact with OEMs whose brands you carry. The OEMs themselves might have recommendations, as well. Some OEMs even have a short list of providers they prefer their dealerships to work with.

“Some OEMs have partnerships with these larger DMSs, and it makes the business relationship easier if the dealership is on one of these ‘certified’ dealers,” Waldemar says, adding that these lists extend to “probably 6-8 DMS providers.” According to Waldemar, OEMs often recommend these providers to their dealers because “you’re not going to be getting the best interactions with your OEM and you’re not going to be getting the best usage as far as process flow” if you use a DMS that’s not on the list.

One OEM that makes such recommendations to its dealer network is Kubota. The 6 solutions on their preferred list are as follows:

• Basic Software Systems
• CDK
• Charter
• DIS
• HBS
• RIMSS

“Typically, from a Kubota perspective, we have those 6 certified systems, but specifically we never say which one they should go with,” Schatschneider says, “because I think it is really important that they find the one that best meets their business needs.”

Schatschneider says that while all DMS solutions essentially perform the same functions — “I bill parts, I control my inventory, I pay my bills, I know how much people owe me” — the integration with the OEM supplier is becoming more important because it ensures access to all of the dealer benefits the OEM provides.

The example Schatschneider used was Kubota’s e-commerce solution. “It’s real-time availability, right from their dealer business system integrated with their credit cards.” He says the reason Kubota is able to provide that solution is “because of this close relationship that we have with this kind of 6 certified DBSs.”

Mannhardt recommends turning to other dealers to get input not only about the DMS but how well it performs.

“I would say in action, it’s worth going to a neighboring dealer — or not even a neighboring dealer,” she says. “You know, take a trip, see it in action, ask questions of people who are actually using it day to day. What do they like? What don’t they like? What do they have problems with? And I’d probably take that same core team, if you could get a dealership to allow you, and have the parts person ask a parts person that question and have your admin and accounting person go ask their accounting person.”

Another concern is the budget. While the ultimate goal of using the new DMS is to make more money and grow the business, it’s important to be sure that you can afford the one you pick. McGuire says that he tries to help dealers understand the general cost up front.

“What I try to do on my initial conversations, especially with the smaller dealerships that call in, I try to go ahead and give ‘em a ballpark,” he says. “It’s like a pre-qualifier, like if you’re buying real estate.”

Finally, there’s training and support to consider after the sale. New Holland Rochester’s Straeter says it’s no small consideration, given that not everyone in the organization will be familiar with DMS-like systems and digital technology.

Straeter is a tech-savvy executive but notes that on the other end of the spectrum are employees who will need to be taught how to use the new technology as well as how it fits into the new process.

“You always hear the term people being set in their ways,” Straeter says. “If you throw a whole new system on them — hey, here’s this, you know, you’ve done it this way for 20 years now, and you have to start doing it this way — that’s certainly going to be a lot harder to get people used to and acclimated with, especially when you have 100 employees.”

Hoult says that training should be focused first on the job that the employee is trying to do and then how to do it using the DMS. 

“The most successful training that I have seen addresses the job, not the tool,” Hoult says. “Where we go with that is understanding what is needed to be able to do the work order, to do the parts sale, to do the customer quote — not so much what all the buttons on the page do.”

It’s important to ask what the employee is trying to accomplish, and then show them how they can use the DMS to accomplish that task, Hoult says. “When you look at it from that standpoint, the training changes. Because you’re not trying to teach every possible bell and whistle and doo-dad and button and report and everything as if you’re trying to train everyone to be that superuser or that supergeek of the system.”

Bolling hearkened back to the value of having organizational champions, as they can help their employees from a training standpoint because they are knowledgeable of the system.

“You know, what happens is, day 1 everything changed. They’ve been through the training. They’re OK on day 1, day 5 or day 10. They come in one Monday morning — they forgot something. And they look for that person who is doing it now with all the business systems that they’re on today, other technology they’re using, and say, ‘Hey, come here Joe, can you help me? Remind me of what we are supposed to do here?’ And it just helps.”