In an attempt to encourage dealers to make the move, GM last week said it plans to give them a choice between systems from two handpicked vendors -- each of which will provide data integration with GM's own business systems, according to company officials.
GM will let its 8,150 North American dealers choose between dealer management systems developed by The Reynolds and Reynolds Co. in Kettering, Ohio, and Quorum Information Technologies Inc. in Calgary, Alberta. GM also said it has signed a deal with Reynolds to supply all 440 of its Saturn retailers in the U.S. with dealer management software starting next year.
The agreements are part of GM's Integrated Dealer Management System (IDMS) program, which is aimed at providing dealers with software that is similar to an ERP system and can work with GM's internal systems.
Robert Ernst, IT manager at Mike Castrucci Chevrolet-Oldsmobile Inc. in Milford, Ohio, is already using a Reynolds-supplied dealer management system running on Windows, and he upgraded to a version with some of the new IDMS capabilities about six weeks ago.
Ernst said the IDMS approach enables GM to see what parts are available in the inventories of dealers, "just like Wal-Mart " can with its suppliers. He said it should also reduce GM's shipping costs because the company will be able to better anticipate when inventories of a particular part need to be replenished.
Nick Bell, process information officer for vehicle sales, services and marketing at GM North America, said dealers currently use a range of management systems. GM hopes to reduce that through the IDMS offering, Bell said, although dealers won't be required to move to a system from Reynolds or Quorum.
Bell said that through the IDMS project and a multiyear effort to put Web front ends on its legacy systems, the company wants to enable "shared visibility" into its systems and those of its dealers, "so we can build more intelligence into their parts ordering."
GM, which in late 2000 pulled out of a proposed investment and software development deal with Reynolds, began evaluating products for the IDMS program two years ago. The automaker isn't disclosing the level of IT and inventory management cost savings that it expects to get as a result of the IDMS strategy.
Hiro Mori, an analyst at The Automotive Consulting Group Inc. in Ann Arbor, Michigan, said persuading dealers to use the dealer management system is only one challenge GM is facing. For example, it also needs parts to be made at the right time in factories.
The deals with Reynolds and Quorum are unrelated to the approximately $15 billion in IT outsourcing agreements that GM is expected to enter into later this month. Electronic Data Systems Corp. now handles about two-thirds of GM's outsourced IT services, but GM is expected to award 40 or so outsourcing contracts to multiple vendors.