Everyone hates change. Change means you must learn new skills, consider information in light of new methods of conducting business, and take the risk of failing or appearing amateurish. As people spend time in a business environment, often their ability to assess and respond-rather than react-to change is challenged. Yet change is an inevitable part of the business world. In fact, some say the only constant in business is change.
The Internet represents the greatest opportunity for change in business processes in the last few decades. Shelley Morrisette of Forrester Research estimates Internet penetration will reach 38% of households this year and achieve 56% penetration by 2003. Other estimates place household penetration even higher and sooner. Regardless of which estimate is used, Internet penetration represents a significant percentage of our customer base. As business owners and managers, we are obliged to take this information and use it to our advantage. In other words, our business practices need to rapidly develop to make use of this new avenue of reaching our customers.
Coffman and Odlyzko, in their article on "The Size and Growth Rate of the Internet," predict that if Internet traffic continues to double as it has, data will exceed voice transmissions on US long distance carriers by the year 2002. It took voice transmissions 100 years to reach the current volume. Yet business-to-business transmissions will exceed current volume in approximately three years. The implications of this staggering increase in business-to-business data transmission volume-and specifically how this change is managed in the automobile dealership-is important to the future success of individual dealerships and dealer groups.
Many of us are familiar with the proprietary systems built by the OEMs to manage inventory, communicate policy, and receive certain information. This includes customer satisfaction measurement data, credit application submission, and decisioning systems, to name a few. In their day, these systems also represented a significant change away from the paper- and phone-based business methods they replaced. The next wave of change predicts that these proprietary systems will be either supplanted or at least augmented by Internet-based solutions.
A decision to implement any new system in business operations should be based on careful analysis of sound business principles: cost, payback period, and operational efficiencies and/or increased profits. In a similar manner, the dealership should take into account the personnel who must actually implement the new system in order for the dealership to realize the benefits. In fact, disruption to the relatively smooth operation of the dealership may result unless proper attention is paid to five critical factors before implementing any new systems. These areas are applicable to implementing Internet-based services in any operational area of the dealership.
1. Who will be directly and personally impacted by the change?
In the case of a change to the F&I department, the F&I manager is obviously the person most likely to be affected. But there are others as well. For example, does paperwork generated by this department flow into another department of the dealership? Will the work flow be disrupted or re-routed to another person?
2. How great a change is required?
Does the new Internet-based system require learning a software program, creating new relationships, or learning a new skill? The fewer changes to behavior required, the more likelihood for success. Alternatively, if the new skills are useful in other areas of the person's life, then you may find more eagerness on the part of the person to participate.
3. How do the people involved react to change and why?
A long-term employee who has grown with the dealership may be reluctant to change or may have reactions to change that are difficult to read. If a business system was implemented in the past, how well the employee reacted to that situation may provide clues to their reactions to the new Internet-based system. New employees typically react with either reluctance or enthusiasm. Uncovering the source of reluctance may reveal a previous bad experience with change.
4. What motivates change?
As you know, many managers are financially motivated. Does the new system offer an opportunity for these managers to improve their compensation as well as benefiting the dealership? Does the change improve their value to your organization or is their value diminished? If the value of that employee's contribution is diminished by implementing the new system, can it be offset by adding responsibility in another area?
5. How quickly must the new system be implemented?
In other words, is the new system an "all or nothing" change, or can the new Internet-based services be phased into your existing business practices? The former is much more difficult to implement since the opportunity to learn in a relatively safe environment is removed. Everyone needs a chance to practice without extreme job pressure.
Effective training on the new systems is important to success. When deciding which system to implement, carefully evaluate the availability of adequate support personnel. These are the individuals who can quickly answer phone calls during the initial setup phase. Sales personnel often are highly skilled practitioners with the new system. Beyond the easy answer of "more training," however, is the issue of desire to change.
Everyone hates change. Learning new skills is painful and time consuming. It's far easier to simply fall back on old ways of getting things done. After all, those methods have brought the dealership to its current successful state. But they may not be appropriate in the future. Some tried-and-true methods may actually hinder the dealership's ability to grow or maintain market share. We are all challenged to adapt to change in a positive manner or risk being left behind by our more agile competitors. The words of William Gibson-"The future is here now, it's just unevenly distributed"-are particularly poignant in this Internet age.
As the vice president for e-Fin Electronic Financial Marketplace, Michael Hucks uses his unique blend of sales, marketing and technology capabilities to further the development of the world's first fully comprehensive electronic financial marketplace for automobile credit applications.