Using software to automate your KPIs can streamline operations and unlock hidden opportunities to make your dealership more cost-effective.
What gets measured gets managed. However, accounting and accountability can be cumbersome tasks. Even after you measure every operation, all you’re left with is a lot of data to sort through. This is why dealerships should automate KPIs.
Car dealerships are as old as cars themselves. Ever since Henry Ford developed his famous assembly lines, car manufacturing has evolved to become more high tech and automated. The same is true of a dealership.
Today you can automate a host of key performance indicators (KPIs) to boost efficiency, save money and generate more insights. Not only does it streamline some of your more cumbersome administrative duties, but it ensures you have all your data in front of you, in an actionable format, as soon as you need it.
As with any new technology, there will be sceptics who need convincing. After all, if spreadsheets are working fine, why is risk introducing something new?
However, they said the same thing about the horse when people talked about this new idea called an automobile. The lesson: just because something works okay, doesn’t mean there isn’t something better just over the horizon.
Here are five compelling reasons why you should make the change now.
Automating KPIs gives you real-time data which unlocks patterns which might otherwise have been missed. You’ll be able to optimise every aspect of your business from buying to stock to the sales and servicing of cars and parts.
These processes produce a considerable amount of data, and computers can analyse it faster than humans. For example, let’s say you tend to experience spikes in certain types of work at different times. If your data is automated, you’ll be able to see these invisible patterns and make changes accordingly.
Data can be captured and analysed across all dealerships within your organisation revealing patterns you would otherwise have missed and spared you a lot of heavy lifting. All this data can be presented in an intuitive user-friendly interface enabling you to use your managerial experience to make smarter and more profitable business decisions.
1) Using KPIs Reduce costs and overheads with a better strategy
Waste, to some degree, is unavoidable. Every ship leaks a little bit. What matters is how many of those leaks you can plug. An IT system which automates your KPIs will help you identify problems which would otherwise have gone unnoticed and streamline operations.
For example, imagine you could optimise your workflow to maximise the speed at which you manage services.
If you can schedule tasks by considering various dynamics, automated metrics will help you streamline workflows more efficiently. You’ll be able to track the performance of individuals managing different roles, providing you with actionable statistics on where you’re spending money, how you can save money and where you can streamline operations.
In other words, this helps you see all the leaks you might otherwise have missed. The result is a series of savings over time which give you a surplus to invest as you please.
2) Identifies opportunities
Your KPIs contains information about opportunities which can help you move forward. This is crucial in a world in which profit margins are shrinking fast.
According to McKinsey, in 2018 average dealership operating profits plunged to 1.7% from 8.9% in 2015. During the same period, profits fell from 3.3% to 2.4%.
Now, with Coronavirus upon us, we’re looking at the prospect of the worst economic downturn since 2008, although some believe it could be even worse.
Managing profit margins and identifying where you can improve will be more important than ever. By getting your KPIs in order, you’ll be able to see which areas of your service are making money and which are losing out.
Automation can flag up these areas of opportunity or risk before trends set in and leave you playing catch up with the market.
3) Avoid discrepancies with better internal control
Better KPIs will help you monitor the performance of your employees across your organisation. This will help you identify the true reason why functions may not be performing at maximum efficiency. It can also help staff by showing them where they are strong and where they need to improve. Having data consistently captured instils discipline in the staff and across your entire business.
4) Boost revenue and margins
Most importantly, better control of your KPIs can lead to higher revenue and better profit margins. At times like this, liquidity is crucial for most businesses. Balancing out creditors and debtors can be extremely difficult especially for car dealerships which are known for having large chunks of depreciating assets.
By using a heady cocktail of live data and managerial experience, you can see where your business is bleeding cash and where money can be made. You can work remotely, accessing data at any given time, giving you all the flexibility you need to maintain operations within the restrictions laid down by COVID 19. All in all, it will save money, help you to deliver services more affordably and drive revenue giving you a crucial edge over your competition.
5) Fine-tuning your dealership using KPIs
New technology, then, can be an enormous boost to your business. Think of your dealership in the same way as an engine.
Every part is interdependent and moving separately. Better automation will help you ensure those parts are moving in harmony turning your dealership into a finely tuned and efficient engine, powering you into a more profitable future.
For those still happy sticking to spreadsheets, it might be worth remembering what happened to those people who stuck with the horse.
Suddenly the world was moving faster and they were left behind. A horse might have seemed adequate, but in the modern age, it was hopelessly unmatched. The same will be true for spreadsheets.