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Welcome to the 21st Century Automotive Retail
By Rajiv Amar, Global CTO and Executive Vice President, CDK Global
A majority of the time, technology companies are trying to solve a business problem or help alleviate a pain point being felt by the company, its customers, or even the industry as a whole. As a developer at heart, these types of problems or issues lead me to immediately ask myself how I can begin to create the processes, structure and culture necessary to solve the pain points, and, most importantly, how technology can facilitate that solution. Regardless of the industry, that point of view has always remained constant.
Over just the past decade, we’ve seen software vendors completely reshape, reinvigorate, and in some instances, create entirely new industries. The most obvious example is the mobile device industry. Ten years ago, the iPhone was brand new and Apple was still sorting out how to make the most of its technological marvel. While everyone who used it was initially blown away, one of the immediate gripes was an inability for developers to integrate to Apple’s new device. Where Apple saw a walled garden that ran its own software flawlessly, software developers saw a platform ripe with opportunity.
Eventually, one year after the launch of the original iPhone, Apple launched its App Store, and the rest is history. Software developers around the world seized the opportunity to create truly revolutionary applications that have changed not only how we use our cell phones and tablet devices, but how we interact with the world around us. Whether it was a revolutionary navigation application that put the power of GPS right in a consumer’s pocket or an on-the-fly language translation application that bridged the language gap, the App Store has evolved into an open-ended platform that adheres to Apple’s strict technical, security and business policies while simultaneously making life easier for developers, and, most importantly, the end users. Since it launched in 2008, the App Store has opened thousands of new capabilities to users and generated over $70 billion in revenue for developers across Apple’s range of iOS devices.
Automotive retail is an industry that is in dire need of an open platform similar to the App Store ecosystem.
By implementing standards that are followed by all developers, you gain the ability for applications to interact in a seamless, secure and resilient fashion
While dealers have had access to a wealth of great technology solutions for years, integration between point solutions has been haphazard. The entire industry is fragmented, which drives inefficiency while also presenting an opportunity.
The problem currently is that there are many solutions in place but the communication between them is point to point, and each of those points is unique. With the immeasurable amount of responsibilities on a dealer’s plate at any given time, the last thing they need is to troubleshoot issues with two or more conflicting applications within their ecosystem. Even at the original equipment manufacturer (OEM) level, you find that specific regions, such as Canada and the U.S., have challenges talking to each other.
In order to solve for this fragmentation, you must explore how other industries have done it. A common thread amongst all who have done so successfully is an integration hub or platform, such as Apple’s previously mentioned ecosystem. By implementing standards that are followed by all developers, you gain the ability for applications to interact in a seamless, secure and resilient fashion. In addition, instilling a review and certification process promotes the adherence to core technical standards and business practices, all while enabling point to point communication.
Creating an integration hub that those in the automotive retail space—dealers, OEMs, lenders, aftermarket insurance providers, etc.—can take advantage of is no small order. For example, an OEM may work with hundreds of different providers, each of which has their own proprietary tools, software, and communication protocols that must be tested on numerous systems before being implemented. How else can they be assured that the software is going to work the way they need it to? This sounds like a reasonable approach, until you consider that each time one of those providers makes a single change or update, things must be thoroughly tested yet again to ensure compatibility due to their unique integration points.
Change, however, is coming. As the industry continues its push into the 21st century by moving away from things like paper transactions and towards online and digital shopping, an industry-wide technology engine is poised to transform things. The Fortellis Automotive Commerce Exchange is a platform that enables seamless connections and greater collaboration to occur among everyone involved in serving automotive consumers, including dealers, OEMs, software developers, lenders and data providers. In addition, within the Exchange is a Developer Network that harnesses innovation and allows a community of global innovators to connect and collaborate to build, test and publish APIs that will seamlessly work with others.
While still in the early stages of the journey, this platform represents an exciting time for automotive retail. As it continues to grow, and more developers sign on, dealers and OEMs will be able to find new software solutions to improve their work processes, while software developers will be able to offer customers new software solutions in a secure e-commerce environment. And, most importantly, all of this translates to a win for the automotive dealers, OEMs, and, ultimately, for the car buyer. Dealers can improve the car buying experience with optimal and efficient processes, OEMs can effectively manage information across their dealers, and car shoppers will reap these benefits in the form of a fast, secure, transparent and seamless purchasing process.
The future of automotive retail—which has taken plenty of cues from other industries—is here. It may be a little late to the party, but it’s certainly an exciting time to see just how the implementation of an open platform that can lead to developer innovation and potentially reshape an entire industry.