Selecting a Shop Management System

When it comes to keeping track of your shop profitability, pen, paper and a calculator don’t cut it these days — hand-written invoices and repair orders look unprofessional; there’s too much information to keep track of the old manual way and too much room for error. You want your bottom line going up all the time, and that’s what shop management software is designed to help you accomplish. It’s just a question of choosing the right system for your shop.

Product features and benefits used to be important, but they’ve been surpassed by the supplier’s reputation, affirms Danny Lankar, president of Concord, Ont.-based Lankar Systems.

“The key thing you should be looking for is the longevity of the company that’s selling the software. Features and benefits can be created and if they’re not there now in a software package, they will be. Really what’s more important than the software itself in this marketplace is the company you’re buying it from.”

That’s because training and support are so crucial, suppliers say. “If you don’t have a vendor that has a very good track record in terms of ongoing support, you’re left with a very sophisticated tool and you really won’t be able to use all the functionality of it because you just don’t have the capacity to learn it all at once,” says Bill Taylor, president of Sherwood Park, Alta.-based Costar.

There’s a proliferation of shop management software packages on the market from a veritable host of suppliers. Remember the knight who said to Indiana Jones on his last crusade, as the latter reached for what he was sure was the Holy Grail, “Choose wisely.”

“A shop management system is not something you want to purchase this year and then have to make another decision a year or 18 months from now,” says Nick DiVerde, marketing director at Mitchell1 in Poway, Calif.

Adds Mitchell1 Senior Product Manager John Dwulet, “There are 100-plus shop management software packages … you may pick a supplier because they’re a little less expensive, or they had that one little feature that you liked, only to find out that two or three years down the road that you’re not dealing with a viable company anymore.”

Do your research

It seems there’s a general consensus that it’s better to do some research first and find a supplier you’re comfortable with, then determine whether their software and support can meet your needs.

“He should do his own research and then look around at what other shops are doing. If the shop owner can go to certain shops and see his friends are happy with what they’re using, then that’s going to help him greatly,” says Danny Lankar. “They have to take the time to get educated and understand the different packages that are out there and that they get the right tool for the job.”

Ask some important questions like these:

* What will this software do for me?

* What kind of support is available – web, phone, personal, e-mail?

* Is the software flexible, so you can enter information the way you need to enter it?

* Can you test the software to see if it fits your needs?

* Is the software easy to use?

* How long has the supplier been in business?

* Can the supplier provide references or testimonials — other shop owners who are satisfied with the company and product?

You may be evaluating several suppliers and software packages. “Get a demo from each vendor and see how easy it is to learn and teach your employees how to use it,” advises Jan White, president of Janco International in Traverse City, Mich. “There are some [packages] out there that do a great job but they are almost impossible to learn how to use.”

Bob Worts of Carrus Technologies sums up it up this way: “If it fits with making it easier for the shop owner, then that’s the system you should go with.”

Software essentials

A good shop management software package will have all the essential components for operating more efficiently and profitably — such as a main customer database, and modules for service scheduling and history, generating repair orders, purchasing, inventory control, accounts receivable and payable, marketing to send out reminders and letters to customers, and integration with online parts inventory and ordering as well as online labour guides. Many are based on the Microsoft operating system and have a Windows interface. Some systems come preloaded with an inventory database, others don’t.

A lot of packages have a built-in accounting module, which is a key issue, say suppliers. This is because your financials need to reflect the nature of your business, not your accountant’s. Their best advice? Don’t listen to your accountant when it comes to choosing a shop management system.

“The shop owner needs to know vehicle history, gauge vehicle mileage between service intervals, needs to understand that there are different mechanics who can work on the same work order and get paid differently, needs to know the marketing aspect of it. Accounting packages are not designed for that,” says Lankar.

Look at your shop management system as an essential part of the overall mix you need to help you reach your business goals.

“Smaller shops feel they have a harder time justifying the cost of software. They look at as an expense and it really isn’t. It should be an investment in your future and in time. It should be like buying a hoist. It’s a tool they can use to increase their productivity and maximize their profitability,” says Jan White.

Some suppliers charge a fixed purchase cost, others are on a monthly fee-based system for software, all updates and support. You have to decide what’s right for you.

The complexity of the software package you choose should reflect your current needs but it should be capable of handling business growth while helping you run the shop more efficiently.

Hardware is the least important of your decisions, shop management software suppliers generally agree.

If you’ve got a relatively new computer system, perhaps three to five years old, then you’ve got a system that’s more than capable of running a shop management package, says Mitchell1’s DiVerde. A computer system that’s 7 or 10 years old, will need to be upgraded. If you’re converting from a paper system, you’ll be making a more significant investment in software and hardware.

“Don’t look at price when you’re looking for a system that will do what you want. Some people will look at it and think ‘I pay this amount for that product’. Another product that will be stronger and will include all updates may be in the long run worth the additional dollars and will save you more money. The idea of the software is to save you money in the long run — reduce your costs and improve your margins,” says Bob Worts.

The bottom line

“Software should be geared to give you all the electronic connections and a professional image, as well as getting repeat customers back and getting the average dollar per repair order up in a professional manner and maintaining a profitable gross margin in a very competitive environment,” adds Costar’s Bill Taylor.

Shop management software is a tool; using it effectively is another matter. The software needs to be flexible, so you have different options for entering and finding information, and growing your business with it. It starts with learning the 20 per cent of the software’s capabilities that cover your essential needs.

“On day one you may not need everything that a system has to offer, but it’s good to know that it’s there and that you can grow into it…they (shop owners) need to learn about all the things the product can do even though they might not be there on day one or even six months from now but nine months from now they may realize there’s more they can take advantage of,” says Mitchell1’s Nick DiVerde.

With the right packag
e, you’ll operate more efficiently, and have a more professional image. You can do everything from write estimates and order parts accurately in minutes, to market your shop with customized postcards for customers.

Bill Taylor of Costar adds that the integral software training and support could even help you identify holes in your business that you didn’t know existed.

“Be prepared to take the course yourself and have some of the people who work for you take it as well. And that might even bring you to the realization that you don’t have all the right people. So now you’re going to be on a quest to acquire one or two new people who will be an integral part of the training and change management that has to happen in your organization.”

For more information on shop management software systems, visit suppliers at the following Web sites:

ALLDATA ServiceCenter www.alldata.com

Carrus Technologies www.carrustechnologies.com

COSTAR Computer Systems www.costar.ca

Janco International www.jancointernational.com

Lankar ABMS www.lankar.com

Mitchell1 www.mitchell1.com