1. Full Name I Company I Job Title I Email
Stronger Dealerships Through Change, Not Chance
Kai Neilsen I Dealertrack I Director of Strategy & Business Operations I

2. Kai Nielsen
Director of Strategy & Business Operations, Dealertrack DMS
@KaiNielsen
Kai Nielsen

3. 2004 | Kai begins his career in the software industry
2007 | Kai joins Dealertrack DMS
2014 | Kai attends NADA Dealer Academy
2015 | Cox Auto acquires Dealertrack
2016 | Cox Auto hits 50,000 Dealer Clients
For the last 10+ I have had the privilege to work for the one of fastest growing technology company’s in our industry. During this time I have personally been hands on with hundreds of dealerships as they have evaluated and made strategic changes in their technology solutions to position them for future growth and success.
This has provided me with a unique vantage point and I intend to share some of things that I have observed, that I believe are predictors of success and help minimize challenges or failures. I will also share several lessons learned to help you avoid the mistakes that others made before you.
Change: 2000 not 1990
2016 | Kai joins Utah Tech Council
2016 | Dealertrack DMS surpasses 3000 clients

4. Solutions Spanning the Entire Automotive Ecosystem
Touching 3 of 4 Cars Sold in the US & Canada
I think we all know that in October of 2015 Cox Automotive made the bold move and acquired Dealertrack. Dealertrack is now part of a sophisticated set of solutions that span the entire automotive ecosystem. We are stand side by side with other premier solutions like vAuto, xTime, and VinSolutions.
I share this with you, not to paint a picture of our size, but rather to paint a picture of our scope and associated insights that we are uniquely positioned to see. Take for example the fact that Cox Automotive solutions play a critical role in 3 out of 4 cars sold in the US & Canada. As an example a vehicle could have been purchased from Manheim and then priced and marketed on Dealer.com or Autotrader Websites. A customer shows interest, and the deal is penciled using VinSoltutions, credit secured using the Dealertrack Lender network and F&I paperwork printed in the DMS.
This scope allows us to have the insight needed to solve tough problems, and allows us to execute our Vision
“Transforming the way the World Buys, Sells and Owns Cars”
As you can see, one of the ways we are executing this vision is with Technology offerings that help our dealers drive efficiencies into the process.

5. Interaction with the audience.
How many of you have changed technology within the last year?
How many of you have changed technology within the last 2-3 year?
How many are currently thinking about switching?

6. New & Used Car Departments Bank Office & Accounting Other
Where do you feel we will see the biggest technology advancements in the next 5-10 years?
Parts Department
Service Department
New & Used Car Departments
Bank Office & Accounting
Other

7. What presentation would not be complete without talking about Millennials, am I right? I wont go into the stats and figures, you guys all know them and hear them all the time. However, what I will share with you, is that as a Millennial, and one that has been hands on with technology my entire career, I can confidently say we are just starting to see the opportunities that are being exposed due to technology advances.
Let me give you a couple examples.
Rewind the clock back to 2005 and dealers were buried in a manual process to acquire, price and sell used cars. Today we have inventory solutions like vAuto and Stockwave that are revolutionizing that process and allowing dealers to improve used car profitability and turn rates.
Consider digital retailing and the evolution of moving towards the fully digital and online purchase process. We are not far from the day, when if you choose, you could complete the entire process of selling a new or used vehicle online including financing and back office F&I products.
Lets not forget fixed operations which is a critical profit center and one that in good times may be ignored. Although most would agree we are in the ”Plateau” phase of the cycle we would be foolish not to assume a downturn will happen at some point. Fixed Operations will be an exciting area to watch as technology advances influence fixed operations.
These are all things that are well in flight and already being used in the market today. If we look out 5 or 10 years and start taking in consideration trends like a fully autonomous car or mass urbanization towards super cities. The probability of additional changes are eminent.
I think we can agree on two things:
In todays highly competitive market, filled with margin compression and a rapidly evolving retail process, technology plays a critical role in your ability to drive profits by increasing productivity and efficiencies.
Implementing or changing any of these solutions is something that probably keeps you up at night. The thought of changing to a new DMS, CRM or other solutions can be scary.

8. Most people spend more time and energy going around problems than trying to solve them.
- Henry Ford
Henry Ford was a visionary in our industry and I believe this statement is appropriate to our conversation today:
“Most people spend more time and energy going around problems than trying to solve them.”
Change: Make this fit the format of the rest of the deck better.

9. Deciding to Switch Technology
Tell the general dealer wanting to change their technology story.
“I’ve met a lot of dealers and these are some of the ‘phases’ they experience within the dealership…”
They are frustrated with their old technology. Old technology won’t allow them to advance, or fulfill the vision they have of their dealership.
They decided it’s time to change.
They start thinking about what’s possible. They will be able to implement many different technological advancements within their dealership.
There are so many options! Too many things to learn! How can one possibly choose.
They are completely overwhelmed and don’t know how to move forward in the process. Fear of change starts to set in.

10. We performed Market research at Dealertrack to see how many decision makers within the dealership were willing to change technology. Out of the 200 dealers we asked, 1/3 of them that said they were unlikely to switch ended up switching after learning the following steps we will talk about in this presentation. Let’s get to it.

11. 5
STEPS
Roadblocks:
I am not naïve enough to stand in front you and make some outrageous claim that changing technology is easy. I am actually going to tell you the opposite Its hard work. However, I will outline some critical steps that you can take to assure what may seem impossible is actually very obtainable.
No question there are a lot of excuses that may get in your way, the key is to understand the challenges and have a proven plan to eliminate them.
5 Steps to a Smooth Transition
There are 5 critical things that you must do. Each of these 5 items are critical and can not be substituted or ignored.

12. 5 STEPS Lets dive into the first step: Choosing a Vendor
Change: Clean up the blue squares

13. Information Gathering:
Evaluation of Alternatives
Information Gathering
Needs Recognition
Purchase Decision
Purchase
Post Purchase Process
Choosing a vendor typically has the following 6 steps:
Needs Recognition:
Most decision making starts with some sort of problem. As you consider making a change you need to document and clearly understand what you are trying to solve for. If you can not clearly identify the top 2-3 things you are trying to solve for your journey for a solution will be a challenge. This will also be critical in later steps we we talk about getting buy in and support from other stakeholders who will be effected by the change.
Information Gathering:
Once you understand the problem/opportunity you need to solve you can start the process of gathering information. A great resource is your peers. Often times the others you may know have already solved for the same or similar problem and can help point you in the right direction. Although peers are a fantastic source of information I would caution you to cast a wide net. Its not enough to get the opinion or 1-2 people, you need to talk to many more to assure you can get a full picture of reality.
If you nail the first two steps you are well on the way and rest of the process should fall into line:
Evaluation of Alternatives
Purchase Decision
Purchase
Post Purchase Process.

14. 5
STEPS
This leads us to step 2 which I would argue is actually step This step needs to be folded tightly into the previous process. A recipe for disaster is making changes to your organization without complete buy in and support from your leadership.
Change: Clean up blue square.

15. Let me share a couple examples of how dealers like you are addressing this step.
One of our DMS customers who has many stores over many states, understood the importance of getting buying from leaders and helping those leaders champion that to the rest of the organization. They understood that the secret was in clear and effective communication of the longer term vision of the organization. They decided to create a series of videos where the leadership team articulated why they were about to change their DMS, CRM and other key systems and many of the benefits to the organization at large. These videos became one of many tools that were pushed deep into the organization so the parts manager, cashier, or any other team member could understand the vision.
Another customer create a series of town halls where lunch was provided. During these meetings team members had the chance to have open, honest and direct conversations with senior leaders about making various technology changes. These meetings started as soon a decision to switch was made and continued for months following the transition.
Change: More females. Make the top one a female and then another on the bottom 15

16. 5
STEPS
Step 3 comes quickly on the heels of step 2 and is about Managing Organizational Change
Change: clean up blue square

17. Outline Behaviors for Success Identify Reasons for Change
Identify Those affected – The secret here is the group is much larger then you think it is and could very well be every single person in your organization. Don’t make the mistake and assume the list of people is smaller then it really is.
Communicate Change – Communicate, Communicate Communicate. Trust me. The smallest of status updates are important everyone. Also don’t make the mistake of filtering the message and polishing out the rough edges. Your team will respond well to open, honest and direct communication.
Identify Reasons for Change – In your communication you have to figure out a way to clearly articulate the “What's in it for me?” (the videos and town halls we discussed earlier are two great methods)
Outline Behaviors for Success – Your team responds well to a challenge and I suspect they love to win. Use this to your advantage by creating benchmarks and expectations that people can work towards. This is a critical part of getting by in and support from your team.
Outline Behaviors for Success
Identify Reasons for Change
Communicate Change
Identify Those Affected

18. 5
STEPS
Change: blue squares.

19. You may have seen a version of this image before, its referred to as the “Emotional Journey of Creating Anything Great” and I suspect it is an accurate depiction of how you view the thought of making technology changes at your store.
You start in a good place excited about the journey ahead and confident that you are have a plan to solve the various problems we identified that sparked the desire for change in the first place.
You dive head first into the implementation process and you are met with unplanned problems and quickly fall into lake of despair. All is not lost and your role up your sleeves dig in, and overtime find that you landed in a better place. I am sure you have all experienced this to some extent.
I would like to propose that there is another way. One that builds a bridge and allows you take an easier and more friendly route.
At Dealertrack we built a proven process that is built on principles of Partnership, Accountability and Transparency. With 3000 DMS conversions under our belt we developed a methodology that requires us to meet our dealer partners in the middle where we are both holding each other accountable for requirements that we know drive success.
Change: the three statements over the bridge stand out more.

20. 5 STEPS Last last step of the process is Continuous Learning
Change: blue square clean up

21. *2016 NADA Dealership Workforce Study by Hireology
Unfortunately our industry does not have a great track record with hiring and retention. In a resent study by Hireology, they found that only 45% of new hires lasted more then 3 years. In comparison to other industries who average 67% Along those lines that average tenure in a dealership is only 2.4 years. You combine those two stats and you realize that there is ample room for improvement.
Continuous learning not only helps improve those two stats, but I believe is one of the greatest opportunities to assure technology changes go well and you reap the benefits for the long haul. So what is continuous learning?
Change: side by side. 67% in other industries at the same time clicking. “Auto industry” “Other industries”
Find workforce for 2.4 but for any industry. 2.4 in auto…. 4.2 in others. Source it differently. Bureau of labor statistics. Employee tenure.
*2016 NADA Dealership Workforce Study by Hireology 21

22. Implementation Boot Camp Story: 8 Weeks, 6 days a week, 8 hours a day
Identify Goals
Implement and Adjust
"Continuous learning refers to the ability to continually develop and improve one's skills and knowledge in order to perform effectively and adapt to changes in the workplace. Let me give you some examples of what Dealertrack is doing for our internal team members.
We have doubled our services organization in the last year and with that growth comes lots of new hires and onboarding efforts.
Implementation Boot Camp Story:
8 Weeks, 6 days a week, 8 hours a day
Tests
Honest Conversations
Job Shadow
Additional Certifications
Added Benefit (Support System, Friendships, that they otherwise would not have)
Change: cycle the color scheme while talking.
Leverage Resources

23. Based on industry best practices, how effective do you feel your onboarding and continuous learning processes are?
I feel awesome. No room for improvement.
It’s a work in progress, but we are better than most.
Is giving new team members a computer and a place to sit not enough?
Let’s be honest, we don’t do much.

24. Technology Dealership Technology Expert Take Time to Learn
Continuous Education
Education Library
At Dealertrack we believe we can play a role in helping our customers solve for continuous learning. We believe we have an obligation to the market to help dealers build and support their continuous learning model.

25. A Unique Performance Management Program
Introduce Performance management and how it helps in the continual learning process without specifically mentioning that this is a Dealertrack DMS program. Think of it like a coach who is there to help the dealership define and work towards near and long term objective.
A personal point of contact that helps you incorporate technology into your dealership

26. “Having Performance Management is significant
“Having Performance Management is significant. It helps ensure that dealers are utilizing the tools to their fullest capabilities.”
– Ryan McCulloch, General Manager, Temecula Hyundai
Real life example. This has been Ryan at Temecula Hyundai’s experience.

27. 5
STEPS
We started this conversation with an acknowledgement that changing technology solutions is not easy, and I have we have outlined a plan, that when followed will position you to be successful.
Like Henry Ford inferred
“Let’s start spending more time and energy solving our problems then working around them”

28. Through Change, Not Chance
Stronger Dealerships
Through Change, Not Chance
By doing so you will create a stronger dealership that is well positioned to capitalize on the changes in our industry that we all agreed are here, and will continue to come.
Tuesday afternoon. Just not Tuesday morning. Don’t be right after a massive keynote. Find agenda and send to kai.
Change: More stats. A dealertrack source stat. Bring to the table stats that only we can share. Find dealertrack stats that fit into 2,3,4,5…. 4 or 5 dealerships do this experience this. Maybe do a study for deck.

29. Thank You
@KaiNielsen
Kai Nielsen

30. Contact Info
Full Name: Kai Nielsen
Company: Dealertrack
Job Title: Director of Strategy & Business Operations