Dave Baiocchi

Unifying your dealership data: By ERP or SOP?

Posted on Jun 20, 2021 in Featured, Features

Last month we were discussing the finer points of the Service CX (customer experience).  As I pointed out in the June issue, managing the CX in the service department is fraught with difficulty.  This is primarily because many times the service department interfaces with customers at the point of their greatest need.  There is a truck at the dock door waiting to unload, and another truck arriving in 30 minutes.  Now the forklift won’t start.  The call to our dispatch desk is awash in panic and fear.

Not all engagements are this perilous, but many are, and attempting to draw a circle around how we want to manage customer expectations is difficult. When the stakes are high and the customer is already facing significant time pressure, how they express their urgency can be challenging. Capable dispatchers and administrators know how to carefully triage the situation in ways that assure and calm the customer, while also collecting accurate data so that the dealership can deliver on the commitment to the CX standard.

If I had to define truly effective service departments, I would use the following adjectives:

• Nimble
• Efficient
• Organized
• Structured
• Engaged
• Committed

The extent to which a dealer can rightly claim these attributes is in many ways predicated on the department’s access to and proper use of digital tools.  We live in a data-driven environment, and (truth be told), the data we depend on is many times locked in an ERP system (Enterprise Resource Planning) that is difficult to navigate, or, (more on-point), our people don’t have the knowledge or training that allows them to find what they need when they need it.

I see many dealers across the country still using legacy systems.  I have also observed ERP systems so advanced they border on the frontiers of AI.  Both dealers have the same problem.  People on the front lines (customer-facing employees) lack relevant, meaningful training, written SOP’s (Standard Operating Procedure), and the management mandate FULLY utilize the system so that their people can attain the characteristics enumerated above.

This dearth of knowledge isn’t limited just to the most complex ERP offerings.  Even legacy systems have enormous capabilities that go untapped.  Something as simple as applying pre-formatted work descriptions to service orders (a function even the most rudimentary systems offer), is routinely not utilized by dealers who instead invest untold man-hours keyboarding in every work description by hand.

The reason for the knowledge gap is not complicated. We all have good intentions starting out. When we install a NEW system, EVERYONE gets trained by the supplier.  The problem is, that these employees only really RETAIN what they REPEATEDLY USE.  The training offered by the ERP supplier is formatted using wide-ranging modules.  Because of the way the modules are organized, only a portion of the material is ever truly applicable to the job function of an individual employee.  The balance of the data is useless because many times it’s not relevant to the individual employee’s regular duties and responsibilities.

The Widening Training Deficiency

The gap is widened even further when we experience turnover in our staff.  This “second wave” of support team members rarely gets the benefit of original supplier training.  Instead, they are trained by other employees.  Depending on time constraints and workload, the second wave many times learns only “enough to get by”.

By the time the 3rd and 4th wave of employees are added (sometimes years later), the functionality and efficiency of the system have long ago been lost to attrition.  The fact is that freshly trained employees can be pretty efficient at using the system, but unless they are gifted…they often make poor trainers.  Add to that the fact that some of these “employee-instructors” may be unmotivated because they themselves are leaving the company.  This is a recipe for a real mess.

So, what’s the best strategy to maintain our technological edge?  Sending every new employee to supplier training is not really an option.  ERP suppliers are notoriously thin on offerings, and much of the training they do offer is centered on new users…. not existing ones.  The expense is also prodigious, and most of the dealer management team is convinced that what they “already know” about the system can be taught by those who “know” (even if what they “know” is dubious).

The most effective answer to this question is a commitment to establishing and maintaining robust, relevant, and readable SOP guidelines for critical digital functions inside the dealership.  Written SOP’s that are used religiously as the STANDARD for operations creates multiple advantages:

Digital SOP’s help to unify goalsetting

When adopting a business system with so many tools and capabilities, one of the first steps in gaining efficiency is to DECIDE what benefits we really want.  It’s common for that decision-making process to be fragmented especially when you have multiple branches, regional agendas, and employees that have varying cyber capabilities.  The best way to start is by gathering the stakeholders (branches included) and unifying the data and reporting goals they will all utilize.

• What data do we really want to track?
• What metrics do we want to measure?
• What are our performance targets?
• Does everyone, (including all the branches) put the same data in the system the same way?
• Are there reports already in the system that will give us that data automatically in real-time?

Once these things are decided it’s then possible for us to the author, step by step, tutorials for how we enter data, organize and generate reporting, compare it to our targets, and assess our progress.

Digital SOP’s amendments must be performed GLOBALLY

One challenge to using SOP-driven processes is enforcement.  There cannot be exceptions, workarounds, or standalone processes. Individual branches cannot be allowed to wander off the digital reservation.   Changes to the SOP will certainly become necessary as system capabilities are upgraded.  When these needs arise, we must make these changes the same way we started—TOGETHER, with all stakeholders.  Making changes to the written standards must be done on a GLOBAL basis, with full transparency.

Digital SOP’s provide continuity

The first goal in producing written SOP’s is to ensure that DATA ENTRY is STANDARDIZED…in every branch.   The second goal is to ensure that we all understand and agree on the reporting mechanisms.  When these two goals are met, it then becomes much easier to refine our data, train proactively, and utilize personnel in cross-functional ways.

It’s a daunting task, and if you don’t currently have a repository of SOP drafts, it can be downright scary.  The benefits of creating these standards however are well worth the effort.  Think about all of the digital entry and processing functions that really could benefit from having a written template that even an employee on their first day could navigate.

• Unit records (customer, rental, new and used)
• Parts inventory records
• Van parts inventory records
• PM data entry and scheduling
• Labor rates and codes
• Work description codes
• Parts returns
• Warranty billing
• Gratis approval and billing
• Employee time posting
• GPS data
• WIP control
• Purchase orders
• Vendor data (A/P)
• Payment processing(A/R)
• Service estimating
• Telephone communication and voice mail
• Customer account and CRM data
• Lost order reporting
• Equipment sales order processing

I am always fond of saying that it’s impossible to hit an invisible target.  This is just a partial list of processes that genuinely require SOP guidance and accountability.  SOP’s serve to center your efforts with data and assessments you can TRUST.  All this said I think it pays to consider that when struggling with digital functionality, it may NOT be an inefficient SYSTEM that is holding you back.  It’s more likely that it’s inefficient PROCESSES that need to be reviewed, refined, and documented.

Take the time, and invest some resources in SOP development.  The effort will require dedicated employees whose only (short-term) task is to get these standards memorialized in writing.  It will take time, focus, and effort to arrange the meetings with stakeholders, and work through every detail.  This cannot be done “on the side”, or as an adjunct to other initiatives.

Most dealers that succeed at this process tend to outsource this task to an outside firm.  RDS (Resonant Dealer Services) would welcome the opportunity to explore how we can help you in this effort to align your processes for efficiency and profitability.

About the Author:

Dave Baiocchi is the president of Resonant Dealer Services LLC.  He has spent 39 years in the equipment business as a sales manager, aftermarket director, and dealer principal.  Dave now consults with dealerships nationwide to establish and enhance best practices, especially in the area of aftermarket development and performance.  E-mail [email protected] or call 209 652-7511 to contact Dave.