I’m not a gambling man, but I bet if I asked 100 dealers on the street what they thought about STAR, the majority of them would think I was asking about science fiction, entertainment or even some sort of new hybrid. However, what I would really be asking about is what they thought about the Standards for Technology in Automotive Retail (STAR) developed by NADA.
When it comes to technology standards, the retail automotive industry has lagged behind many other industries. But standards are important. Think about how you can plug any electrical appliance into a wall outlet. The 110 volt standard allows any plug to work in any outlet nationwide (but not in Europe which has a different standard). Now imagine if different types of appliances had different electrical standards. How inconvenient would that be? Similarly, standards allow you to purchase any brand of printer and it will work with any brand of computer.
Unfortunately this hasn’t been the case in retail automotive. Many years ago OEMs developed their dealership communications systems using closed, proprietary interfaces. The result of this was that many technology vendors were left out in the cold because they weren’t allowed to develop these interfaces. But in recent years, many manufacturers have implemented STAR into their dealer communications systems. This benefits the dealers in several ways:
Increased competition. Open standards literally open up the field to more technology vendors – providing more choices for dealers. For example, before Toyota implemented STAR in its dealership communications system, Toyota dealers had only two choices for certified DMS vendors. Now that STAR has been implemented, Toyota dealers can choose from among four certified DMS vendors. Kia dealers can currently choose from more than seven certified DMS vendors.
Better communication. STAR has worked with its membership to develop more than145 XML message formats covering more than 40 business areas, from customer relationship management (CRM) to fixed and variable operations. These standard formats enable the dealership to easily connect with manufacturers, third party application providers and other business partners, from banks to parts suppliers. This seamless data exchange allows for real-time transactions in daily business, with more reliable and accurate data. Before STAR, a dealer may have had to manage several vendor relationships for leasing and lending purposes, but a standard format has led to the development of web portals that can aggregate data from multiple lenders in one place.
Reduced IT costs. In addition to lower-priced DMS solutions, open standards reduce costs for dealerships in several other ways. The STAR Dealer Infrastructure Guidelines (DIG) establishes a best practices checklist to develop a common network infrastructure. By using these best practices, dealers can significantly lower IT operating costs. A common infrastructure allows dealers to choose from a wider variety of software, hardware and communications solutions. Open standards also make it easier for IT personnel to access, understand and fix any IT issues that may occur.
Increased productivity. Technology standards can help eliminate redundancies, which in turn leads to greater productivity. For example, one of the STAR interfaces gives dealers the ability to download vehicle invoice information directly to the DMS inventory system. This generates significant time savings as there is no need for an individual to manually type the information into the system. In addition, the accuracy of the information is almost always near perfect. The STAR standard also enables the dealership office manager to download warranty payments directly to the DMS accounting system, again saving time and eliminating errors.
Rapid development of new products. Use of the STAR standard allows for rapid implementation of new computer and communications applications. Since all the OEMs and vendors are writing to the same standard, they can introduce new interfaces quickly, which in turn enable faster throughput for daily business transactions such as parts orders and credit applications.
Access to information. Seamless integration with a manufacturer’s communications system provides dealers with access to more information about prospects and customers than they previously had. For instance, Toyota’s interfaces now make it possible for dealers to see all the services ever done on a vehicle, not just the service history in their dealership (even if the vehicle was purchased in a different dealership). This type of information may make it easier to sell a particular service, or a service contract.
More than 20 manufacturers are now members of STAR, including BMW, Volkswagen, Kia, Honda, Toyota, Nissan, Ford, General Motors and Chrysler. NADA is the representative body for dealerships, and nearly a dozen DMS vendors have implemented some form of STAR standards in their software solutions.
Although STAR focuses on IT standards, the real benefits come from streamlined business practices, increased competition and reduced costs for dealerships. Dealers who are interested in learning more about STAR can go to www.starstandard.org for more information.