Mets Kramer and I continue to talk about Digitalization of Dealers. This conversation covers what we need to do “internally.”

You know, I always think it's funny that we were happy enough to drop 20 or 30 grand on an engine to put in a machine. That makes perfect sense. But spend even, you know,10% of that or 20% of that on some information systems. And that's a big number suddenly.

Yeah.

No. And that's kind of an interesting thing, right? Like I'll get back to where people tend to go. When you really look at it, if you were to take your dealership, your business, and say it had nothing, you know, you put people to work, you give them a laptop, and you say, okay, we've got to run the business, people. You know, what's the first thing that a lot of people will do? Well, they start to make spreadsheets. Like, they intrinsically have this need, and there is, you know, a demand inside the organization to... to collect and store information and share that with other people. And, you know, so you get these big shared spreadsheets that everyone is interacting with and but it happens naturally, right? And left with a vacuum, a void, most dealers, most people at dealerships invent their own solutions because it's important. And, you know, sometimes we call it shadow IT. It's like the IT department not involved in solving problems.

And so people grab what they have, which is most people are comfortable to some degree with Excel, and they start making solutions. And that's one of my favorite things to do when I go into places, especially when I talk to admins and coordinators, is like, show me your spreadsheets. I know you have them. Somewhere you have like a half a dozen spreadsheets that are really important. and like if i deleted your spreadsheets you would be like furious you'd feel lost because these are the things and and the spreadsheet isn't you know excel is the tool and we'll get back to tools in a sec but what's really important is the information all the information in my spreadsheet like that's what they would say if i deleted them all my information is gone and so in in thinking through this i was like If you see that happening naturally and you understand that where they would be upset is the information that was lost when the spreadsheet gets deleted, then it becomes clear that the most important thing in your dealership is information.

That's what has the value. And so I kind of wrote that down as the first tenant, the first aspect to think about. When anyone, regardless of the size of dealership, starts thinking about, oh, I want to do things more efficiently. I want to do things more electronically. I want better systems. The core of it is the information.

Exactly. Yeah. I've been surprised, you know, working with dealers, how confident. people can be about the information in their spreadsheet because because they understand it because they maintain it they immediately have a feeling like this is correct i trust this you know it may not be accurate there might be lots of bad data in their spreadsheet but because it's approachable because they understand how it works and often because they you know built it um they trust it and so when we kind of take the next step because we look at information that being the thing that the dealer should value or that typically everyone understands that they value, you know, a customer list is really valuable, but you wouldn't want to share it with someone and you wouldn't want to lose it, you know, and, and, and all kinds of similar information.

And yet what I find is that people are in love with or are drawn to tools and specifically software tools so rather than you know coming into the situation where they have a need to improve their business efficiency or you know just make it more visible to more people rather than look at it from an information perspective they start looking for solutions in the form of a tool and they tend to evaluate the solution from the perspective of the tool. It's like, you know, saying I need to remove engines in the shop and the snap-on truck shows up and you start looking for the shiniest, best looking wrench that you think is going to take the engine out. In the end, the wrench on its own will not remove the engine. It will only enable the technician who knows and has the information on how to remove the engine to actually pull the engine. And we understand that from that technical service aspect of our business.

And yet, when it comes to information systems, we go the opposite direction and we get enamored with the tools that we look at. We start saying, okay, well, we need something like that. We need to solve this problem. So let's start looking at tools. And the challenge is, you know, a lot of dealers don't really know, you know, what the tool is doing. They just see the interfaces, they get a nice demo, a nice walkthrough by someone who's done a lot of demos. And I can tell you over 20 years of being involved in dealership software, starting at Tormon and stuff, you know exactly where the little problems are in your software. You know how to talk around them, you know how to avoid them, you know exactly what data to put in to get the right demo. And the demo looks great. So it seems like you found the solution in this tool. And so a lot of people then find themselves like, oh, I solved my problem. I can move forward. This is a really nice tool.

And then there's a project to implement the tool and people get invested. And now we're really enamored with the tool. But the problem is that I've seen is. People forgot to ask some really important questions about that really first thing. The thing that's most valuable is the information that's now going into the tool.

Right.

It's an unholy extension of a tool that has many good uses and so many terrible uses.

Pretty much. Yeah. And, and that's why like when you get to the stage, like first, when you understand what information is valuable, either that information that you're trying to capture and save so that it can be accessible when you need it or information that you're trying to transact and turn into something else for the next stage of that information's life cycle or a transaction life cycle. Once you understand the information that you're trying to do and what you're trying to accomplish in the business, you can take slightly different approach to the demo. I would never let someone demo the software. If you really want to understand how something works. then you should ask them to show you how it would work with your scenarios. I want to do this. They're less predictable. They're harder demos for the person doing them. But at least then you'd start to understand it in the context of what you're trying to accomplish.

And you should ask really important questions about where's my data? If the building burned down, And we all got out safe and I got my data. Probably I can start everything back up in a short period of time. If I lose that, you know, I had a dealer who lost their entire accounting system. It was on an old, like under the desk server. And it was an old piece of software and they knew it and they knew it was problematic. And one day it just died. Nothing. Everything was just gone. It had to start from scratch. Yeah, and they didn't want the software back because they hated it, and it was problematic because it was old, but they lost all their data. That's the piece they would have wanted to keep.

It's like an old soul.

I think the important thing to think about, the important way to consider it is that the tool is disposable. You know, you buy a wrench and the wrench doesn't do the job. You throw it away and buy a better wrench. You know, the tool is disposable. 12 inch bar that you bought isn't long enough. You go buy an 18 inch and the 12 inches. Now we should think about software tools the same way. They should be part of the progression of my business. I'm not going to use the same tool and other parts of my business for the entire life of my business. Why would I consider that I'm going to find a tool that's going to do everything? And, you know, that's one of the most.

common things that happens is you get a tool and then you forgot to think about like what am I going to want to do next like now that I've solved my first problem you know what would I want to do next with that data what would I want to that tool to be able to do next as I suddenly realize like I've now solved this problem I have better insight into what I'm doing I'm more efficient I have more time on my hands what would I do next you know that's probably the most useful thing to think about in two ways. One is you should ask when you're doing that demo, can it do that thing that I'll want to do next? Or is it already then I'm out? Or two, recognize that the tool will get you to that next point at which time you've changed the value proposition of what you're doing, you've changed your capability of what you can do, you've grown out of that tool. And so you need to move to the next version, next tool. It's something that will take you further.

And at that point, the important thing is, can I take my data over to it? Is that easy? Can that be done? Can I plan for it? Is there a migration that I can initiate before I even need to make the switch? Or can I put my data in a place that's safe and synchronized so that when that new tool is needed, I know where to get it. I'm not going to have to go back and ask for, hey, can I have my data? And then your vendor says, we don't know how to get it out.

We're less likely to change the software platform than we are to get rid of the person.

Now, who was it that you had write a blog on? Are we afraid of our business systems?

Yeah.

Yeah. They need help in the sense that I like to get people to keep these important tenants of what they're trying to do, just like they understand other parts of their business. really well to understand these tenants in a way that will help guide through this internal digitization to, to make choices, um, to see things for what they are, to see value in it. Um, so that they can, they can internally, they can work together to move the business forward, always asking the right questions when they, you know, see the next shiny thing, you know, um, And value is a big piece of it. We're in our industry tragically behind the rest of business sector, industry sectors. We spend way less per revenue dollar as a percentage on information systems than a lot of, if not most industries. The industry average, if you talk to information systems people, is like 5% of revenue. But we probably have people spending like 1%,1.5% on information systems.

yeah. And there's two aspects of that that make it really funny in a way. Funny, peculiar, and not ha-ha. Like I said, we're willing to spend 30 grand on an engine at the drop of a hat. We see the value in spending, you know, new engine for a rental machine makes perfect sense. Got to rent the machine, need an engine,30 grand. Great. That's what they cost. And two, and so we don't understand the value of software or of information systems. I don't want to say software because. of our information platform, which makes it hard to make these decisions, just to invest in it. And yet, you know, the other funny thing is that we all spend most of our days staring at our laptops or our screens. We have people, you know, dedicated to sitting in front of a computer. And most of us, everything we have to do at work every day is on a computer.

And yet somehow, you know, the value of improving efficiency or improving what we can see and do and understand about our business is hard to manifest in in an organization you know and so part of it is for me is trying to figure out how do you get people to see like hey i did this i made this investment and i got this return you know and i hate using catchy terms like roi but in an in an intrinsic way, how do you see like, hey, I did this and I see the value that I got. And so therefore I want to do it again.

and you

Hey, look at the practical side of it. Any dealer will tell you if they sell a used machine and they can give it with a full service history, they get 10% more for the machine. I mean,10% for a bunch of paper that says I serviced it. Proof.

don't. They don't. And it's been one of those. This gets a little technical, but it's been one of the things I've been trying to solve in our new implementation of visibility is, you know, information and systems can need to be designed to follow a process. and stored that way, which makes it very, at times, very unmanageable because it isn't stored like the way we think as people. And so I've tried really hard in my designs to make sure we store information like it represents the real world. Because then the information is transferable, it's understandable, it's relatable, and you can do something with it. If it's embedded in a way that all it does is allow you to generate the process again, then you can't move it very easily. It's not stored the right way. And it's like anyone who writes a spreadsheet to save some information is doing it more often than not in like a real world object kind of way. And that's an important consideration.

It's a tough technical question to ask when you're evaluating a platform. But it's like, you know, is this system managing my information in a way that is you know, a practical approachable from an analytics point of view, from a transference to another system point of view, you know, is it being managed properly? Does it represent something of value? If it is, then I can do something.

You're paper to glass and then glass to glass to glass to glass.

Actually, I think that's a really interesting analogy because when you do like a form in six, Seqlitat? Whatever. Six copies of it. And when it was originally designed, you know, for some reason, they wanted six copies. And every person, you know, every copy had a home. Eventually, in time, you know, maybe only two get used. And no one remembers why they had six. But in a way, what it shows is that when that information was created in the format that it was created, it had value to six different people. that it needed to be accessible by six different groups or parts of the business at the time that they need it. Not like I'm going to call over to the department and, hey, can you send me that form that you filled out when you ordered those parts? I'd like to see that. It's like, no, I have my set of copies so that I can do my review and analysis of that information. Let me disappear and forms don't evolve well. Right.

They're like static moments in time that represent how the people saw the business and the process at the time. And so they tend not to evolve with the business. They eventually get you less copies are used and someone stops using it because it just, you know, it didn't evolve. Electronic tools can change easier.

Yeah. But if it's stored properly, six different departments

Yeah. I'm writing those right now, actually.

One minute.

Yeah.

Yeah.

Yeah, we're simple creatures.

I love your standing in line thing. I always bring up with people I loved when, or was it Domino's, I think. Domino's did their pizza tracker. Remember the pizza tracker? Do you use the pizza tracker? I mean, we all have garbage pizza some days. Yeah. You know, it's delicious. But so Donald's did this great thing where you order your pizza and then they don't just say like 30 minutes. It'll be there within 30 minutes. It's like they let you see where it is. And if there's anything that manages human anxiety better. It's just knowing where it is. And so the line at the airport, you feel better about the line at the airport if there's a sign above you that says 14 minutes. This line will take 14 minutes. You're like, oh,14 minutes. If you go into the line, have no idea, the anxiety level is way higher. And that right there is a great example of customer service, digitization, and the power of information. If you can, so many systems.

you know a customer online orders parts and that's it thank you for your order we'll be in touch i'm like what are you doing like my first feeling is like i just submitted the order i'm like okay now what what am i getting in like all you need to do is like connect all that information you're creating and put it on the screen in front of the guy and be like your part is now being picked Oh, great. I feel better. Like, it's still going to take just as long as it was before, but I feel better. It's been picked. Joe has your part and he's putting it in a box. I feel so much better. I'm like totally relaxed about this whole getting my parts on time thing because I know Joe is putting it in a box. It must be getting closer to me.

Your salesman is now polishing the tires.

later,2022,

We're doing better. Yeah.

No, no, I don't think John had any fun doing that.

So actually, so. this information value or discussion about Pizza Hut and their pizza tracker and anxiety management, those are all really good examples of what I was talking about earlier, which is like, what do you want to do next? Now that you have this tool and the information going into your tool, what would you want to do next? You know, like so many people have a business system that takes their parts orders, you know, but they, when if you wanted to do an order tracker that would be that'd be a great idea you go to a dealer say hey how about you do like an order tracker for your customers on a website so they can see where their orders are like yeah it's a great idea then people would know and they would feel more comfortable and you know they want to use us more and place more online orders and all that kind of stuff like how do we do it like well all the data is in this system like what can we get it out no it's stuck like there's no

interface there's no you know ways and so the third piece after information being the most valuable and the tool being just the way that you manage your information and it's disposable is is integration like you have to think nowadays about you know is is this information accessible through integration systems can it be integrated into another you know tool you know, another information database. And so if the answer is no, you know, I know a dealer and you might hear this, but the platform they're on, they have to like, you know, ask very nicely, pretty please to get their data into another platform where they could do something like an order tracker on their website, you know, and that is probably not something that came up initially.

And they didn't understand maybe, but, you know, the ability to, or the fact that your ability is so limited because you can't pull the information into another platform, into another tool, into another system, prevents you from growing, prevents you from taking that next step. Now that you see that it's there.

Right. And that's a really important thing that you said there, because the integration is really important. The ability for your information to be integrated into other tools that you're using. or analysis tools is really important. And what's really easy now, it used to be really hard to have your own database. Now you can go to Azure, Google, whoever, and get a database. You can get an SQL database server running for 100 bucks a month. And it's like enterprise grade, scalable, everything. And you can store all your data there or back it up. or integrate it with other data from other platforms for $100 a month and have it be safe. It's okay. Use that tool. That tool is a great tool. Super easy. Get someone who can write some code and just from that tool's API, which is what you made sure it had when you asked the integration question, pull that data, dump it into your own database. Every day.

The API is an application program interface.

It's the best way to think about it is like an invisible web page. It's like an invisible interface screen to that system that another computer can do what you do through an interface. Right. It can ask like, give me all, give me a list of all the customers. And it responds with, here's a list of all your customers.

The application program interface.

Well, aside from write the integration code. Yeah.

And that's a really important point is like some people have. Some platforms have some information available through an API, and modern systems have all information. Like our platform is built with a 100% API interface. Everything that you can do in the web interface, you can do through the API using any other tool. You can build your own apps. You can build whatever you want. The data is all API accessible, and that makes integration with anything really straightforward.

Right. They don't have one.

A little bit.

And the great thing is, in a way, if you don't have any systems right now, it is easier than ever. It is cheaper than ever. You can build a serverless app to do a custom API integration in half a day with a good programmer. What used to take weeks or months to program when you had to go without APIs and stuff. To the modernity. The currentness of the technology is a huge value add if it's been built correctly, because it will let you do that next thing. It will let you find the value in your information. It will let you transcend the tool that you're enamored with. And it'll let you think about what do I want to do next?

Sounds about right.

Yeah. They're just trying to solve their daily, their today problem. Yeah.

Yeah. That's definitely probably the biggest challenge is being able to look past your current problem and the current solution to what they really need. Yeah.

It's always good to talk to other people to develop ideas. No one has ideas purely on their own. I found that really rare. You know, you've seen a lot of warehouses. And so for you coming up with ideas when you see another person's warehouse and what they could do is really easy because you've seen it. And so I never fault people when I get somewhere and they can't visualize how their warehouse could be different and better, especially if they've only ever worked in that warehouse. It's just not how people develop ideas. They do it by seeing other things and talking to other people.

Yeah, but like all the ones you bring up are companies that change the game. You know, the mom and pop hardware shop lost to Home Depot because they changed the approach. And so that dumb and happy sitting around protecting the status quo, someone's going to come by and be like, I'm going to change the game on how it's done. And everyone's going to realize, oh, my goodness, this is so much easier. And now you have to play catch up if you want to stay in the game.

And that on that bombshell.