Monthly Archives: February 2016

Interesting to Compelling


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I didn’t realize it at the time but from the moment I started as a trainee software developer with Reynolds & Reynolds (now Pentana Solutions) in October 1988, I was introduced to three very important concepts in business and in particular, creating software products to add value and make the business (and the businesses using them) money.

The first is the concept of defining the value you provide to your clients. It wasn’t until many years later that I learnt this as the process of taking something from “interesting to compelling” and once you could achieve this transformation, great things would follow. The second concept is finding the commercial point of a product in the development process because that is the point when it needs to be taken to your client base, not when the development is finished. The third concept was creating barriers to exit for your clients; products, processes or services within your offering that the client can’t do without (real or perceived).

Reynolds & Reynolds Australia (R&R) supplied dealer management systems (DMS) to car dealers and was a wholly owned subsidiary of The Reynolds & Reynolds Company (R&R US) based in Dayton, Ohio. It had been marketing/selling a solid, rudimentary DMS that was interesting for dealers as it offered value as a DMS but was one of a few in the market with similar capabilities and as such there was no clear leader at that time.

R&R knew that to dominate the market he had to move from having an interesting offering for dealers to a compelling one. Being interesting meant you would be shopped against other interesting offerings from your competitors and the best price would win. Being compelling meant your client just had to have what you have to offer; or accept something sub-standard and adapt. This then gave you something your clients would pay good money for and that something was value.

The ERA DMS was introduced to US dealers by R&R US in 1987 and promised to be a game changer as it was the first on the market to seamlessly integrate the various parts of a car dealership within the computer system: accounting, new vehicles, used vehicles, spare parts, service, aftermarket, etc. ERA had to be brought to Australia.

I was hired as a trainee computer programmer tasked with “Australianizing” ERA as fast as we could in a small team (change operating systems, convert dates, miles/kms, etc and change some dealers process within the DMS). The project was top secret within R&R and it had created a buzz around the office. R&R US sent out a couple of programmers to help us along early on. For six solid months we trawled through hundreds of thousands of lines of code making change after change, compiling the source code and making sure each program worked after the changes. For me it was a buzz learning a new programming language on the job, although at the time I didn’t realize exactly what we were working towards achieving. ERA was the product to take Dealer Management Systems in Australia from interesting to compelling. It was the product that would change the landscape for R&R.

Now that we had the first piece of the puzzle, unbeknownst to me, we needed to work out the second piece of the puzzle; finding the commercial point in the development process when ERA would be taken to the client base. I had no idea at the time that this was the process. Wouldn’t it be sold when everything was finished?

It was announced that the first dealer install of ERA would be in April 1989, a mere 6 months after the project began in earnest. I thought it was crazy as we still had so much to do (and we certainly did) but as I learnt later, the product was ready to create value for the client regardless of whether development was finished or not. A part of this lesson was that the development process is never finished so if we wait for that moment, we would never release anything to a client or we would release it too late. I think this is why so many technology minded programmers don’t understand the business side of technology and the ones that do prove to be very valuable.

There were many problems in the first installation. Software conversion issues, differences between Australia and US dealer process, operating system environment issues and so on but ultimately these were issues that we were going to have now or six months later when most thought we would be ready. Very quickly ERA starting providing value to the client and the right commercial point of the product had been found. Problems were being fixed on the fly both on site at the client and back in the R&R office. It was all hands on deck to make it right for the client.

ERA didn’t prove to be a very hard sell in a very competitive and tough environment of car dealers. Very quickly ERA helped R&R become the clear number one in Australia but really it wasn’t just the product that made this happen. Without the wisdom of the leaders at R&R in particular to make the investment to bring something compelling to Australia and the judgement to find its commercial point as early in the cycle as possible, a competitor might have stolen the march on R&R in releasing something more interesting that may have changed the landscape.

The third concept, creating barriers to exit, was the next step.


Maybe the Internet is just a Fad


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A little while ago I was looking to purchase a car for my wife and a first car for my son. 

My wife knew what model she wanted so I go straight to the carsales website to check on new car pricing and availability with a view to test driving and purchasing. She had made up her mind and wanted it now.
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I was looking to purchase new so I search for the model in New Cars in Stock (actual car in stock at a dealer) and New Cars Available (not tied to a dealer and not necessarily in stock). This is where it got hard. There were no New Cars in Stock (in the make/model I was after) for me to consider as some Car Manufacturers and dealers put a ban on listing new cars in stock at their dealership on all 3rd party websites.

I then included in my expanded search “Demo” and “Near New Cars” and luckily there were some dealers that are getting around the OEM edict and listing their new cars in this category. At least then I could get a better idea of a real price and maybe, just maybe find a dealer in Melbourne that has one of the colour(s) I’m seeking in stock (as I don’t want to wait on order). No such luck so I reluctantly visit the local dealer on a weekend and ask what they have in stock to get their best price. Of course they had none in stock. Maybe it is 1995 I thought. Imagine an invention where dealers could list all the new cars they have with transparent pricing (including margin for them) so dealers didn’t have to have the “race to the bottom” and consumers felt like they were getting a fair deal!
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I was stuck though, what do I do now because I don’t want to visit  or call more dealers in hope. I know, I’ll put this task in the too hard basket and park it. There’s nothing wrong with what she had anyway.

My son’s car was a little different. We had to do a little research and come up with a consideration set that we could then look to “touch and feel”, realign the consideration set, test drive and select vehicle. We looked through carsales, refining the search parameters as we go about saving/modifying/deleting cars in the Saved Items section of our Members account, visited a few dealers, read reviews, re-defined the list of cars and finally were ready to test drive with a view to making a selection of a vehicle. We headed down the road to a few dealers to test drive.

After one of our test drives we decided to check out the dealer next door because we had some time. We straight away liked a model we had never heard of from the showroom floor. After a few questions we were out in a test drive and yep, my son loved it. I said to the sales guy that this model wasn’t even on our radar since we hadn’t seen it on carsales at all. In fact, I’d never heard of it. The response astounded me, “Oh no, our OEM doesn’t want new cars advertised on carsales”. What? Say that again!
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Carsales has 4 million people a month to it’s network doing just like I was doing, trying to work out what to buy, how much to pay and where to get it AND the OEM won’t allow new cars to be part of the consideration process!! I was astounded. If I didn’t have 1/2 hour to spare to visit the dealer next door I would never had walked into THAT brand of dealership BUT if I could have included the model in my consideration set online, well, I would have had to.

Consumers will continue to come online and to carsales to figure out they what, how much and where. Every new car needs to have a chance to be in each consideration set lined up against other new cars, demo cars and used cars – after all, every car is a new car at purchase time! 

Every day more and more people are buying from the choices that are presented to them online. But then again, maybe the Internet is just a fad.