Distribution |
A Q&A with Tom Aliotti, Activant Solutions
What's the No. 1 technology challenge you encounter in the aftermarket? There's a significant lack of awareness among mid-size and smaller distributors of the competitive value of modern systems technologies. Large distributors and groups clearly get it — they understand that solutions that make their businesses more efficient ultimately lead to a significantly better customer experience. They've got more competitive horsepower at the parts counter, they're faster and more accurate, their returns rates are down, and they're cutting operating expenses while competing more effectively against OE dealerships.At the other end of the spectrum, we have literally thousands of parts businesses that are focused on traditional processes and which are still using 15- or 20-year-old computer systems. Many of these business owners not only lack Web access, but they have no experience operating in a Microsoft Windows-based environment. Needless to say, they're missing out on all of the competitive benefits being utilized by larger distributors and dealership parts departments. What's most frustrating about this is that if we simply applied today's commonly accepted customer service standards to the replacement parts business, we would realize that we need to make significant improvements. How many of us would consider doing business with a bank that doesn't have online services? Would we be satisfied with a bank representative who says he'll have to call back in 30 minutes to provide our account balance? Well, why should we expect our customers — especially the owners of repair shops — to settle for poor service due to outdated computer systems? As business owners we replace our trucks every four to five years, and at home we buy new computers, game consoles and cell phones every two to three years. Yet, when it comes to applying modern software solutions and other technologies within the aftermarket, we become fixated on the capital expense rather than the true, tangible competitive benefits. That's not the right approach to take concerning a strategic investment that could transform your bottom line. The aftermarket is often accused of underspending on IT. Do you think this is true, and what kind or ramifications will this sort of behavior have? The aftermarket is absolutely under-invested in IT. And it's not difficult to identify the ramifications — just look at what vehicle manufacturers and car dealerships are doing to forge cradle-to-grave business relationships with consumers. Then compare these initiatives against the typical customer experience encountered in many service dealer and parts store locations. Our competition is implementing telematics and advanced customer relationship management capabilities while thousands of aftermarket businesses are still on 1980s-era green screen computers. It's night and day. How widespread is the problem? There's no question that many top-tier aftermarket distributors have embraced technology as an opportunity to reduce costs and increase sales, profitability and customer loyalty. In fact, they are indeed reaping these benefits on a daily basis. We try to communicate these successes to convince their peers that technology doesn't have to be a crap-shoot — by making smart decisions, including choosing the right provider, that "expensive" new computer system can pay for itself in a matter of months. Beyond the leading-edge distributors, there's a second tier of business owners who are just now opening their eyes to the benefits of modern technologies; in many cases, they've been spurred on by an erosion of market share or profitability and realize they've got to do something to reverse that decline. |
