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Small providers of dealer management systems are nipping at the giants' heels
Small suppliers of dealer computer systems are trying to win business from industry leaders ADP Dealer Services and Reynolds and Reynolds Co. by emphasizing price and service.
And their timing may be right.
The latest biennial survey conducted by NADA showed the big two with a combined 71 percent of the market for dealership management systems. About a dozen companies share most of the rest.
Most dealers interviewed for the 2003 study indicated overall satisfaction with systems products and services. Fifty-three percent said they did not plan to switch from their current vendors.
But 31 percent were undecided, and 14 percent said they were ready for a change. So while Reynolds' and ADP's dealer loyalty is fairly good, the numbers show there is room for challengers.
There has been some change and turbulence at the top. In 2004, ADP, of Huffman Estates, Ill., bought out the auto services component of Texasbased EDS. And Reynolds and Reynolds of Dayton, Ohio, went through a management shake-up as it worked to maintain its customer base and introduce new products.
Dealership IT consultants and industry pundits see change on the horizon. Most believe Reynolds and Reynolds and ADP will continue to dominate. But they point out that energetic and flexible small vendors of dealership management systems are finding greater acceptance among dealers.
"The big three still have the best products out there," says consultant Adam Gillrie of the Paul Gillrie Institute in Tampa, FIa., referring to Reynolds, ADP and No. 3 Universal Computer Systems of Houston. "Dealership management system programs are very complex. A problem is their software is old and looks like it is DOS-based."
But Gillrie says that even...