Old Friends and New at NADA

Walking through Chinatown, my wife and I gave a dollar to an old man playing Auld Lang Syne on his violin – the Chinese violin, called an erhu.  This year, NADA began with the Chinese New Year, which was especially nice in San Francisco.  The parade was the week after, though.  We missed that.

Walking past the Route One booth, I was hailed by CEO Mike Jurecki and my old friend Pat McPherson.  A dealer was asking them about bi-weekly payment plans.  I ended up demonstrating the sales tool I had designed for U.S. Equity, on a MenuVantage account, in a Route One frame.  “Mark helped us design our system, too,” Pat added.

I read the dealer’s business card and said, “you sell a Resource warranty and you recently stopped using MenuVantage.” He wants Flash in his menu, so I referred him to Impact Group.

My new friends include a number of menu systems – formerly competitors.  We have announced the deal with Impact Group.  Others are in the works.  This is part of my “many to many” strategy, making PEN the single connection between all product providers and all dealer systems.

See You in San Francisco

I will be representing Provider Exchange Network again this year.  All PEN providers will get a visit from me or Ron Greer.  In addition, we will be calling on menu suppliers and other systems that might benefit from a PEN interface.  For convenience, all my set meetings are at the ADP booth, and this is the best place to find me on Saturday.  I will also be spending time at the Reynolds booth.

Stone Eagle Joins the Network

When I say that Provider Exchange Network has connections to F&I product providers, this really means connections to the providers’ admin systems.  So, I am pleased to announce our relationship with a leading purveyor of these systems, Stone Eagle.  The official announcement is here.

Electronic contracting is now available to users of the Stone Eagle SCS and ARCH systems.  I particularly like ARCH.  It is the AJAX based system I mentioned in my latest post on software development. Providers often ask me to recommend an admin system and, of course, I am recommending Stone Eagle.

Reed Says Provider Sites Obsolete

Brian Reed has a post over at P&A Magazine on provider sites for e-contracting.  I would say that he cribbed my analogy with online credit apps, but I know Mr. Reed is an old hand and he has lived through the same history.

In the mid to late ’90s, a number of auto finance companies developed their own system for dealers to electronically submit credit applications.

I agree with Reed’s central complaint about the provider sites.  As I have written previously, they break the dealer’s process.  I might add that DMS integration isn’t getting any easier.  So, what is the best way for a product provider to support e-contracting?  Continuing the analogy with online credit, Reed suggests a single web site for multiple providers.  Think of Dealer Track, only with products instead of finance contracts.

I see a few problems with this idea.  First, providers will not support a shared platform if it allows rate shopping.  Then, of course, there is the problem of DMS integration.  But the biggest problem flows from the online credit analogy.

Lenders can now bypass the aggregation sites, in favor of direct links to the DMS.  Marty Zwolan calls this “disintermediation.”  It’s the mission of Open Dealer Exchange.  The best way to support e-contracting is to exploit a system the dealer is already using.

Trade Valuation and Online F&I

What Dale Pollak says about trade valuation is spot on, and it also applies to upfront pricing.  Dale says that having an efficient process is worth more than wringing every last dollar out of every car.  Brian Benstock says the same thing about his new-car business, “making less per transaction, but doing more transactions.”

Readers of this blog already know my thoughts on upfront pricing.  Trade valuation is another objection to online F&I.  How can the customer desk his own deal if he doesn’t know what his trade is worth?  Well, the pieces are falling into place.  In addition to choosing a car online, the customer will soon be able to do his own F&I.  The challenge to us, as innovators, is to present software tools that encourage customer involvement.

Rich Internet Applications for F&I

One of the fun things about my job is that I get to see the latest developments in F&I software.  Back when I did my first credit system, client-server technology was the state of the art.  This allowed a feature-rich user interface, but we had to build a huge point-to-point network to support it.

Web-based systems have dramatically reduced deployment costs but, until recently, the user experience was pretty ugly.  When I left MenuVantage, we were just starting to experiment with AJAX and Silverlight.  Silverlight has a nice grid control, among other things, and can support a page densely packed with controls.  I am surprised we don’t see more Silverlight in the F&I space.

Vision Menu uses web parts, and a clean white page reminiscent of Google.  Web parts are a handy way to segment your page into reusable parts, and also to support personalization.  I saw another system recently, using Flash to good effect – but Flash is not my favorite.  I still think of Flash as a graphics control, and I run a Flash blocker on my browser.  Steve Jobs doesn’t like Flash, either, and it won’t run on your iPad.

Stone Eagle uses AJAX in the latest version of their service-contract administration system.  AJAX is my favorite, because it seems to fit best in the .NET programming style.  With AJAX, Stone Eagle achieves the same rich experience you would enjoy on a desktop application, without the deployment issues.

The Longest Project

This week, I had the pleasure of restarting a project that has lain fallow since May 2007.  Provider Exchange Network is adding a major dealer group – one we didn’t get while I was at MenuVantage.  In the meantime, we have been improving our methods and developing new relationships.  People and processes that were previously closed to PEN are now available.

In 1999, I drew the assignment to develop a menu system and e-contracting for AutoNation.  They are still running that menu system, but without e-contracting.  At MenuVantage, I finally came up with a successful approach to e-contracting and “advanced the state of the industry” – as Chris Morris kindly put it.

Someday, I will go back to my old boss at AutoNation and report this project as complete.  It only took two software startups, a new business model, the combined weight of ADP and Reynolds, and a platoon of programmers.  I hope he hasn’t retired.

New Web Site

Provider Exchange Network now has its own web site.  As the press release says, I am “thrilled.” The new site brings together our brand, our value proposition, and links to news articles.

In a few months, we will add a list of PEN Certified dealer systems.  Meantime, any product providers who are not yet signed up should contact me (or Ron Greer) for integration specs and a contract.

Personnel Announcement

Many of you know my able assistant, Sariyah.  While I am off consulting, she keeps the business running smoothly with everything from file folders to travel plans.

As of October 10, Sariyah has officially been promoted to the role of Mrs. Virag – at least, I think that’s a promotion.  We will be out-of-office for the rest of October, with limited access to voicemail.

Lenders Outsource Forms Management

About a year ago, I did an informal survey of F&I product providers.  They were, and still are, moving toward a service-oriented architecture that prints forms and originates contracts online.  For providers who do not have a forms service, Provider Exchange Network will host forms at a nominal charge.  We offer this as a convenience, even though providers are moving away from it.

Lenders, however, are not moving in this direction.  This is mainly due to stricter regulation of finance contracts, and also the disparate experiences of the two groups.  In the late nineties, finance sources – both captive and independent – developed online credit systems. They subsequently moved to aggregators like Dealer Track, and many single-lender systems shut down.

So, while product providers have retained their online systems, and support their own services for e-contracting, most lenders do not.  This is why my colleagues in Lender Services are busy loading their forms library, while we are unloading ours.