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I’m not a gambling man, but I bet if I asked100 dealers on the street what they thought about STAR, the majority 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 means that appliance will work anywhere nationwide (but not in Europe which has a different standard). Now imagine if different brands of appliances had different electrical standards. How inconvenient would that be?
Many years ago OEMs developed their dealership communications systems (DCS) 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 DCS. This benefits dealerships in several ways:
Increased Competition. Open standards literally open up the field to more technology vendors, which means more choices for dealers. For example, before Toyota implemented STAR in its DCS, there were only two DMS vendors that had proprietary interfaces. Now, Toyota dealers can choose from between four approved DMS vendors. Kia dealers can currently choose from more than seven DMS vendors. More choices means that vendors must compete for the dealer’s business, which lowers costs for dealerships.
Better Communication. Standard formats enable dealerships 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. For example, 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 aggregate data from multiple lenders in one place.
Reduced IT Costs. 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. Now dealers may choose from a wider variety of software, hardware and communications solutions. Open standards also make it easier for IT personnel to understand and fix any IT issues that occur.
Increased Productivity. Standards help eliminate redundancies, which leads to greater productivity. For example, dealers can download vehicle invoice information directly to the DMS inventory system, eliminating the need to manually enter the information. An office manager can download warranty payments directly to the DMS accounting system, 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 performed 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.
This blog was condensed from the article “STAR Standards Lighting the Way” which appeared in the July issue of Digital Dealer magazine.
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