Is data your best friend or your worst enemy?

Why do I ask? Well, if you work in a dealership, chances are good that you either review or are responsible for creating reports on a regular basis. For principals and managers, reports reveal important information such as how many units your dealership has sold this month, how many customer-pay ROs you've completed, or whether you're on track to hit quarterly revenue goals.

But knowing these numbers doesn't necessarily lead to improved operations or more revenue. Are you leveraging your business intelligence to increase ROI for your dealership?

In auto dealerships, business intelligence is defined as the analysis of data gathered from reporting applications, and the subsequent application of that knowledge to improve best practices and make better decisions.

Here are three ways that accurate business intelligence can deliver immediate ROI to your dealership:

1) Process Improvement

Business intelligence has proved time and time again, with many different dealerships, that when processes are followed you make money. Not only that, but the more adherence there is to established processes, the more money you will make.

If your Key Performance Indicators (KPIs) are set up correctly and your data shows that certain departments or individuals are not operating within those KPIs, then you know your processes are not being followed. It's as simple as that.

The nice thing about using KPIs as a process-checker is that you'll know beforehand if revenue goals are in trouble. So instead of having to go to your sales director and ask why your sales team had such a terrible month last month, you'll be able to approach them proactively. Halfway through the month you can say "these salespeople are not making enough phone calls," which gives the team time to correct their actions and play catch up so you don't get a nasty surprise at the end of the month.

2) Transparency

I’m sure that just about all of you have had a department manager and a GM look at the same numbers and come up with different projections, it’s a pretty common occurrence in dealerships. That's because often there isn't consistency or accountability in the reporting process.

One of the main benefits of business intelligence is that it can be harnessed into a format so everyone is looking at the same data in the same way. For example, if a service advisor provides a weekly report in an Excel spreadsheet, and one week sees an unusually high number of open ROs, he may be tempted to fudge that number. But when reports are generated in a consistent template using the data in your DMS, it becomes difficult to fudge the numbers. This creates transparency; everyone is looking at the same data, which can then be used to improve accountability and to apply discipline where necessary. Additionally, increased transparency often leads to increased motivation by employees, because it becomes impossible to hide poor performance.

When it comes to data, transparency is either your best friend or your worst enemy. If it's your worst enemy, chances are you like to procrastinate or don't like to follow processes. However for a dealer, transparency is in fact always your best friend because it gives you a more accurate picture of where you are, how you got there and how you can get to where you want to be next month, quarter or year.

3) Increased Productivity

The most accurate business intelligence is gathered from reports pulled from your DMS or from an enterprise reporting system that's integrated with your DMS. A side benefit of using this these types of reports for business intelligence is that they can be run quickly, which significantly increases staff productivity.

Do you really want each of your Internet Managers spending four hours a week creating reports in an Excel spreadsheet? Or would you rather have them spend that four hours following up with leads? Same with your service advisors; wouldn't their time better be spent training techs or following up on declined repairs?

Taking the extra time to dig into KPIs and glean business intelligence from them will deliver increased ROI in the form of process improvements, transparency and more productivity.

What story are your reports telling you? Focusing on rear view numbers tells you where you've been. Business intelligence can help you navigate to where you want to go.