Just a couple more weeks and the Industry’s largest F&I conference will be underway. The Vehicle Service Contract Administrator Conference (VSCAC), one of three conferences composing the Industry Summit being held September 26 through 28, has come a long way from its debut back in 2004.

Review of 2010

The 2010 conference covered many workshops and panel sessions examining topics relevant to the dismal economy, technological changes in the industry, compliance issues, and even opened the door to addressing F&I product categories outside of vehicle service contracts.

The Hot Buttons for the year included the following:

The Danger Inside the Data – discussing how the prior two years had impacted the data that companies depend upon to set their business strategies. Further discussion reflected upon whether, and if so how much, does historical data really predict the future.

The New World of F&I – which provided an overview of the F&I industry and the role of technology and internet has on opportunities available. The impact of demographic shifts and new legislation was also discussed.

Dealership Reinsurance – the challenges and opportunities regarding reinsurance were discussed as well as ideas for providers on how reinsurance could be made an integral part of their product offerings.

Panel discussions covered Web Services including e-Quoting, rating and contract generation and the impact the economy had on business, and Workshops focused on “The Importance of a ‘Bag’ of Products,” and compliance issues.

Focus for 2011

So, where has the focus changed to over the course of a year? Has it changed, and if so how much?

VSCAC this year still covers the same important categories as in prior years, but as the world and economy is ever-changing, so do the technology, laws, business strategies, and product offerings that this industry operates within.

Technology

Technology is a huge topic as it is an integral part of almost every segment of a business’ operations – providers and administrators not withstanding. A large portion of the conference focuses on technological changes, not only in the market place, but also within the industry. So, how these changes have affected our product offerings, how we do business, and the changes that we have made to remain competitive, accurate, reliable and efficient are a huge result of technological changes and processes.

Technology-based workshops and panel sessions include:

• Two panel sessions covering the 4-part series based on “connecting providers, administrators, and dealers” that P&A Magazine has been covering over the past few months. The first panel session, moderated by Adam Kimber with Agent Entrepreneur and P&A Magazines, will be held the first day of the conference, Tuesday, from 10:00 – 11:15. The second panel session, moderated by David Trinder with F&I Administration Solutions, will be held the second day of the conference, Wednesday, from 11:30 – 12:30.
• An afternoon keynote address from 2:00 – 3:00 on Tuesday given by Jim Pratt with Wright Express, covering issues regarding making VSC claims payments faster, cheaper, and more efficient with electronic payments.
• A Wednesday morning panel session from 10:05 – 11:15 moderated by David Trinder titled “Agents Sound Off on What They Need.”

Compliance

Trying to keep abreast of most current laws, what is and is not permitted and conducting business within the “not-so-black-and-white” areas of compliance issues can be very tricky. Event planners and coordinators have made sure that attendees of this conference have not left without having ample opportunity to catch up with what is going on in the industry and what to keep in mind while going about your everyday business schedule.

Panel sessions and presentations that delve into this area of interest include:

• Monday evening’s Welcome and evening keynote address given by Damon Wiener with Safe-Guard Products International about doing business the right way (without breaking the bank). This legal-fee free session precedes the conference’s Welcome reception held at 6:15 – 7:45 that evening.
• A Wednesday morning panel session from 9:00 – 10:00 presented by Michael Benoit with Hudson Cook LLP titled “Compliance Watch: The Industry’s Newest Threats.”
• An afternoon panel session from 3:05 – 4:00 on Wednesday moderated by Lewis Kuhl with Pathman Lewis LLP will cover Emerging Claims Issues with VSCs.

The Economy, Business Strategies and Product Discussions

For the past few years it’s been hard for many to escape the effects the economy has had on businesses. Although many of the Technology and Compliance panel sessions and workshops will include ideas and information relating to general business processes, several workshops and a Keynote Address have been included on the agenda that are more focused on these topics. Included in the agenda are the following:

• An opening keynote address held on Tuesday from 9:00 – 10:00 presented by Mike Frosch with The Warranty Group discussing Strategies for a Rebounding Market.
• A workshop on Tuesday afternoon from 11:30 – 12:30 presented by Gary Fagg with CreditRe on Limit the Inherent Risk of Too-Good-to-be-True Products.
• A second workshop on Tuesday afternoon from 3:05 – 4:05 on Keeping Tire and Wheel Viable – trends that are impacting current and future programs.
• A workshop on Tuesday from 4:30 – 5:30 presented by John Kerper with Kerper-Bowron will examine Month-to-Month Renewal Service Contracts and provide key insights on how to manage this reemerging product segment.
• On Wednesday from 2:00 – 3:00 a workshop co-presented by Lee Bowron with Kerper-Bowron, and Guy Koenig with AmTrust will cover Carrier/Administrator Relations Best Practices and elaborates on what practices need to be implemented to ensure the goals held by both parties are achieved.

The full VSCAC agenda can be viewed at http://www.vscac.com/Program/Conference-Program/”

If you are a provider or administrator, this conference is THE place to be from September 26 through September 28. Not only does VSCAC offer great insight and best practices for professionals in the industry, there are also several Networking Breaks scheduled throughout each day and a reception following the day’s events that will be open to all attendees and participants from all three conferences included in the Industry Summit. What better way to break-up or end your day by catching up on the latest conference events, networking, socializing, and putting names to faces that we conduct day-to-day business with from all areas of the country.

The need for an Inspection Certification program has been discussed in great length over the past year in P&A Magazine, but we have really not even touched on any of the “other” areas of the inspection process and these issues (or problems) warrant just as much attention as those that the certification program may solve.

So, I asked Jeff Roberts, Vice President of Claims Administration with Easy Care, Ron MacPherson, an independent inspector with Inspector LLC and L’Tonya Carr, owner of the inspection company Carr Appraisals, if they could provide their thoughts and ideas on ways they feel the process could be improved.

I first asked them what, in their opinion, was the reason for a decrease in volume of inspections that have occurred over the past couple of years. All three participants agreed that the economy was a major contributing factor to this decline. L’Tonya broke it down into three components:

• First, as Don Larsen mentioned in his article, inspections have historically been perceived as a “cause of considerable disruption, expense, and loss of productivity for the customer, dealership, and administrator.” In an attempt to control costs in a bad economy, many efforts are made to reduce this ‘necessary evil’ due to greater emphasis on customer service and retention.
• Second, as a result of the perception that there remains a lack of ‘quality inspectors/ inspections’ to choose from, Administrators/Providers may, and oftentimes do, decide to ‘cut costs’ by cutting out inspections altogether.
• Last, as history has proven, the worse the economy, the greater the fraud/upsell. So, although short-term costs of ceasing inspection services may be reduced, long-term costs of future claims can be exponential.

I next asked participants if they could provide some suggestions that they feel could improve any perceptions as well as reduce actual occurrences of disruptions, lost time and increased expenses?

Jeff Roberts noted, “There is no way around the fact that inspections are going to be disruptive, more expensive and create some lost productivity for everyone involved. But to put it in perspective, take a $4,000 transmission repair as an example, pulling it off the rack and pushing it aside for inspection doesn’t take any more time than waiting on a customer to make a decision on a repair. Most consumers will not provide an approval on your first call for something that expensive. They will likely call around for more estimates, talk to their friends and family for advice and then call back the next day or so with their decision. The repair facility ends up waiting on us or them either way.”

That being said, Roberts did go on to say that one of the best ways to minimize these perceptions &/or actual occurrences requires “good planning and good communication. The key is making sure the vehicle is truly ready for inspection, all disassembly is complete and the technician is available to show the failures.” Other suggestions included:

• The value of having the inspector called in should be explained to customers. They should be aware that inspections provide “protections” for them, as well as for other parties involved.
• L’Tonya recommended that Administrators and Providers could place greater emphasis on communicating their inspection expectations with the repair facility before the inspector arrives, and provided some examples such as, “type of testing, level of tear down, and how they want the failure demonstrated. Any of these would vastly improve overall process perception and relations between the involved parties.”
• Ms. Carr further recommended that a possible way to reduce perceived and actual disruptions, expenses and lost productivity for all parties involved is to put a tracking system in place which can “monitor and address issues that affect any of these areas, from both the Administrator and Inspection side.” She further explained that “Carr Appraisals tracks ‘re-inspections’ and looks for trends which impact expenses and performance; we track inspection ‘completion’ times/delays, and look for trends and issues which impact expenses, performance and productivity.” The system she uses reports the average time/hours of inspection completion by client and/or inspector, and can provide information on reasons and who caused them.
• Ron MacPherson has noticed that some repair facilities are trying to improve the process by utilizing extended warranty coverage as part of their customer servicing and some provide low cost rental or loaner automobiles to their customers.
• Lastly, L’Tonya suggested that there be better use of automated transfer of inspection requests and return of information. She noted that although almost all parties have the capabilities of doing so, a delay seems to occur which is often the result of being put at the low-end of the priority list and sometimes cost, though she stressed (and I have to agree) that with the “high-tech” world we live in today, there has been a decrease in most technology costs and therefore they shouldn’t be a driving factor.

I then asked, “What can be done to improve circumstances that lead an inspection to go awry due to poor communications with/from the repair facility, or poor preparation or insufficient processes within the administrator?”

All participants said that communication is of the utmost importance and that both inspectors and repair facilities need to be aware of any expectations that the Administrator and Provider have. Roberts noted that “the challenge is getting everyone on the same page. The service writer, the technician, the adjuster and the inspector all have to be on the same page as to what is trying to be accomplished.”

L’Tonya suggested that the Administrator/Provider provide as much information regarding the present claim and any past claim or occurrences available. And, Ron further commented that often times the repair facility has difficulties contacting the advisor or that time is wasted waiting for the advisor to return the call(s) regarding the claim. He suggested that alternative means of contacting these advisors by means of cell phones or by providing the advisor with an alternate contact at the repair facility like a shop foreman or service manager so that time is not wasted waiting for the advisor’s return call to the repair facility.

Not only do these solutions address the communication factor, they can also improve turn around time as well.

L’Tonya also mentioned that an area in need of improvement that affects turn around time is how quickly photo documentation is available. She noted that “there are several field inspectors who already utilize equipment in the field to transfer quality photo documentation directly from the repair facility and this has expedited the process immensely.”

Turnaround time at EasyCare is pretty satisfactory according to Jeff Roberts. He noted, “Sure we would like to have a quicker turn around time but almost all of our inspections are completed within 24 hours of the request and many are done the very same day. We are very sensitive to the needs of the repair facility where they need to be working on vehicles, not standing around waiting for inspections.” His thoughts are that if a clear expectation is communicated of what is needed to be reviewed when the inspector arrives, turn around time will remain optimal and hold-ups are less likely to occur.

While still on the subject of communication, L’Tonya said that if Administrator and Provider standards were possible, it would help with consistency among methods to communicate credible inspection findings & other information. An example she gave was that she could be looking at identical GM model transmissions with two different Administrators, and the inspection test or procedure and information required by each administrator could be VERY different. This not only can cause confusion but can also prove cumbersome for the inspector.

Technology is a major player in the job of the inspector. It also plays a huge role in the communication between the inspector and the Administrator &/or Provider. Don Larsen’s July 2010 article mentioned that we were on the threshold of having the ability to communicate with the inspector while they were still at the repair facility so that the review of photographic documentation could occur in real-time rather than waiting for uploads the next day. So, I was curious to find out if we have passed the threshold and if real-time communication was occurring almost one-year later. The responses I received varied.

Being in Hawaii proves to be a bit of a challenge for Ron MacPherson, and although calling in reports from repair facilities has been a part of their process for some time now, loading pictures (including formatting, titling and resizing) is not always possible. This is because 1) this process takes time, and 2) Wifi coverage is not always available, making it impossible to download the picture while on site.

Like Ron, L’Tonya Carr said that they have been verbally communicating with clients from the repair facility for years, but because the internet is much more reliable at her client sites, the majority of the inspectors who work with her are able to transfer the necessary photo documentation directly from the facility to Carr Appraisals website allowing “the Administrator almost instant access to the picture.”

Many of these roadblocks occur because everyone is pointing the finger at each other. So how do we hold everyone accountable? Based on L’Tonya and Ron, the following suggestions were recommended:

Repair Facility – Communication between the inspector and the repair facility is, again, of extreme importance and can stymie the entire inspection process. Number one is to make sure the vehicle is ready for inspection before the inspector arrives on site. Perhaps the repair facility should be monetarily responsible should the inspector incur prolonged wait time for the vehicle to be ready or should it be necessary for the inspector to make a return visit to complete the inspection. Repair facilities should not restrict needed customer information from the inspector.

Inspector – It is the inspector’s responsibility to make sure the inspection is thoroughly performed and completed before he/she leaves the premises. The inspector should be held responsible monetarily for any damage resulting from his/her neglectful actions.

Administrator &/or Provider – as mentioned earlier, expectations should be clearly communicated to both the repair facility and the inspector BEFORE the inspection begins. Perhaps a monetary responsibility should be imposed here as well.

My final question covered compensation. From both the inspectors view and an administrator view, the consensus was that there should be a standard “minimum” rate. Jeff Roberts commented that “Some inspections will be close by and take little time to inspect, while others will take longer and involve more traveling distance. By charging a ‘fair’ flat rate for all your inspections, you make it fairer for everyone and keeps things simple from a billing perspective.”

L’Tonya noted that though there is truth to this, she feels that additional monetary consideration should be given based on experience, education, technical abilities, full-certification, and locations of inspection site (especially if outside a particular range of the inspector’s base territory, for example 50 miles).

While Jeff, L’Tonya, and Ron provided a wealth of insight about the additional issues that are perceived or that actually occur in the inspection process, and they definitely provided some terrific ideas to improve the processes, it looks as though it may get rougher before it gets easier. The good news is that communication was the number one mentioned improvement or solution for almost all issues. If each party could simply work on ways to better improve the process through improved communication, it seems very likely that the changes to come will be off to a great start.

Two of P&A Magazine’s most highly read articles in 2010 discussed the idea of the necessity for a Certified Inspector’s Program. Both articles, Call to Action: Inspectors Need Certification to Improve Credibility by Don Larsen, and Where Have All the Good Inspectors Gone & Who is Filling Their Shoes? by L’Tonya Carr, provided some very strong examples of circumstances where inspections have gone wrong and where it was often a result of under-qualified or dishonest inspectors performing the job.

There have been an overwhelming number of reader comments and discussions, both among the staff here at P&A Magazine and among others in the industry. Because of this interest, I decided to consult with several people in the industry to see what they think an Inspector Certification Program should consist of and how it could benefit all parties involved.

All participants whom I spoke with agreed that there definitely appears to be a need for a certified inspectors program. These participants include Jeff Roberts with EasyCare, L’Tonya Carr with Carr Appraisals, and two independent inspectors, Len Marshall and Alan Bridges. All participants additionally agreed that the industry as a whole could benefit from such a program, but concerns exist, as explained later, as to whether it is even feasible to add another cost to the inspectors’ already expensive set of equipment.

There are several factors that contribute to this need. The prevailing factor being that the quantity of trustworthy, credible, quality inspectors has significantly decreased over the past few years, and that the industry remains to be plagued by those who are unqualified and oftentimes untrustworthy.

The decrease in quality inspectors is attributed to inspectors moving to jobs in other professions due to lowered income caused by (1) higher costs associated with maintaining a position as an inspector, and (2) less available inspections which are also further apart from each other caused from closings of dealerships and repair facilities. The latter part of which is is a direct result of the decline in economy over the past few years.

As L’Tonya explained in her November article, this smaller pool of qualified, trustworthy inspectors opened the door for those inspectors who are under-qualified, who are potentially less credible and who often times charge less. All participants I spoke with agreed, and most held the opinion that under-qualified inspectors had a lack of proper training and standards for what is necessary to have during an inspection.

The advent of a Certified Inspector’s Program may not solve all of the issues that can cause a bad inspection or that attribute to under-qualified and under-credible inspectors, but as L’Tonya Carr noted, “It’s a great place to start. Knowing that an inspector is well qualified through training and certification should allay some TPA concerns of trustworthiness.” She further commented that a program like this “may not ‘keep out’ a lazy or dishonest inspector, but it CAN protect good people and make it much more difficult for the others to operate.”

Len Marshall noted that “adjustors should be held to the same standards as well.” A certification for inspectors could very well include a program for adjustors. By doing so, accountability among both parties is sure to improve. If TPA’s and Insurer’s require that inspectors be certified, and if the inspector loses his certification, he cannot be used as an inspector. This in turn makes him or her accountable, and therefore encourages the inspector to do the best possible job he or she can. This also can create a sense of consequences for the inspector who currently performs under par. As a result they become more credible and trustworthy to TPAs, Insurer’s and Repair Facilities.

I asked these industry experts, “What should be included in a program like this? Should it only address ‘technical knowledge?’ What about a code of conduct, inspection standards, or continued education?”

Jeff Roberts provided a perspective from the TPA/Insurer’s side replying, “You would have to go beyond the technical aspect. There are plenty of very technical folks out there who I wouldn’t hire to inspect a vehicle. One big obstacle for any TPA is ensuring that the inspector is not perceived to be approaching the inspection as a match of wits to see who knows more, the technician or the inspector. ‘People’ skills are as important as the technical aspect.”

Inspectors I talked with expressed the same thing. All felt that focusing on technology alone was not enough. Len Marshall commented, “Technical knowledge itself is almost useless without the knowledge of all of the other components of a proper inspection.”

L’Tonya added, “the field needs to be educated on the ‘true role’ of an inspector today. The relationship between TPA, Insurer, and VSC holder has seen significant change over the past several years. Subsequently, the role and expectations for inspectors has changed. Technological knowledge alone, does not make for a ‘good inspector.’ You can be the most ‘technically knowledgeable’ inspector on the planet, but if you don’t possess good problem solving skills, reasoning skills, and communication skills (both oral & written), you are wasting the industry’s time and money.”

Roberts pointed out that “you have to go beyond the technical aspect. There are plenty of very technical folks out there that I wouldn’t hire to inspect a vehicle.” He further mentioned that ‘people’ skills are equally important.

Developing industry-wide standards and procedures (which include both TPAs and Inspectors) was considered by most of the participants I talked with to be very important and necessary to be included in such a program. Another idea was to incorporate standardized forms and photo requirements. This would streamline the process regardless of which insurer, TPA or Repair Facility one is working with.

I next asked if this certification should involve some form of apprenticeship program?

I got mixed opinions on this question. An argument for an apprenticeship program was that oftentimes there is so much to perform during the total inspection process that to throw someone out into the field without at least a minimum of hands-on training would defeat the purpose of the certification program. But as Alan pointed out, “Who would pay the apprentice? The Inspector? The organization providing the certification? Both?”

The thought of additional expenses for an inspector is a very sensitive subject as L’Tonya expressed in her article, “Where Have All The Good Inspectors Gone,” and will be addressed very soon to come.

So who or what is going to get this program off the ground? Back in his July 2010 article, Don Larson suggested that some form of independent organization, such as AFIP which is an independent organization for the F&I Industry, coordinate such a program.

Apparently, similar thoughts exist among inspectors as well, as both L’Tonya and Len thought it would be a good idea to have such an organization put together this certification program. Len suggested NAISE, or a similar entity, that would have at least 5-years of general automotive field background, that would understand and have a great deal of knowledge of automotive business operations, and that has diagnostic technical training.

Then, of course, is the question of how would the program be delivered?

Although it was mentioned that a classroom setting would be “ideal,” it was unanimous that on-line and web-interactive training and coursework was the “way to go.” It was also mentioned that the only true way to actually certify someone after his or her completion of training is through evaluation of actual field work. This brings us right back to the idea of whether an apprenticeship program is necessary as part of the program. Which also brings us right back to who is going to fund this type of program (apprenticeship or not)? What about fees to become certified?

L’Tonya suggested that it could potentially be funded by TPAs, Inspection Agencies, and Member Dues. This would definitely spread the cost of such a program over several sources and could possibly make the cost for the inspector fairly reasonable. A point I would like to make here that everyone should take into consideration is that there are many industries where licensure and accreditation come at a price.

Accountants have to take the CPA exam, a cost of over $1,000, and that is just to take the exam, that does not include any courses that may be necessary to pass this test or association fees that ensure the accountant his or her credibility. Lawyers have to pass the Bar Exam and pay any association fees necessary for credibility in their community. Insurance, Annuity and Financial Instrument Brokers have to pay for licensure, association and continued education courses in order to remain current and available to practice in their profession. My point here is that these certifications assure the public and potential clientele for each profession that the person in whatever profession they are in is properly trained, is credible and has the proper knowledge to perform the tasks they are representing they can perform. None of these come for free.

A certification program for the Inspection profession is a MUST. Not only will such a program address accountability and trust issues among TPAs, Insurers and Inspectors, it will also create an even playing ground for the Inspectors themselves. It will ensure that all inspectors who are used, are fully knowledgeable and trained in standardized processes that ensure all parties involved that they are working with credible, qualified inspectors making the inspection process as a whole a very dependable, efficient process.

With technology being at the forefront of our business processes and being it is such an integral part of how we do business, I thought it would be interesting to see what some of the P&A industry’s product providers are focusing on and what they consider “HOT” for their business for 2011.

Of the companies I consulted with, F&I Express, Innovative Aftermarket Systems, Open Dealer Exchange (ODE) and Provider Exchange Network (PEN) provided me with what their companies are looking into, and in some cases are already working, on for 2011. Although the Automotive F&I industry has experienced quite a bit of growth technologically speaking, by looking at what the participants in this article are focusing on, I think you will agree that we have only scratched the surface of potential uses and capabilities for everyone involved.

Brian Reed with F&I Express confirmed this assumption when he made the following comment, “If someone had asked me in the 2000 when everything in the F&I office would be electronic, I would have replied 2005. Well, this is 2011 and we are still at the early stages of a true e-F&I Office. I think that this year though will be a breakout year, with the market place in general making big steps forward.

Many captives and independent lenders have rolled out or will be rolling out e-contracting for finance and lease contracts. At the same time, most every aftermarket administrator/provider has initiatives under way. As all of the major partners/suppliers for F&I Managers begin offering good electronic solutions, I feel that the F&I Department in dealerships will start rapidly embracing the new processes.”

F&I Express

Brian went on to explain a little about the technology solutions F&I Express offers and where they are looking at improving &/or growing these in their company:

F&I Express provides an e-contracting, e-rating, e-signature platforms for dealers so that they can go one place to process all their F&I Product administrators/providers. Many administrators/providers today offer dealer e-contracting options if they go to the administrator/providers proprietary websites.

The problem is that dealers and the dealer’s agents do not want to go to multiple web sites to e-contract their aftermarket products. We feel that the F&I Express platform solves this problem by providing the dealers an easy process with a great User Interface.

As we are focused on adding administrators and dealers to the F&I Express platform, we are constantly looking at how our technology platform can help dealers have easy, efficient, and effective processes for the processing aftermarket contracts. One of the areas where many dealers, agents, and administrators have been working to increase the sale of aftermarket F&I products is in the service lane. There have been some dealer success stories but also some efforts that have failed.

One of the challenges of selling a product like a vehicle service contract to service customers is the challenge of getting the customer to the F&I office. As new mobile technologies are being embraced by consumers and businesses, we think that they could help offer an additional tool to dealers.

This year at NADA we provided demonstrations of our new iPad F&I Express process. From the iPad the dealer can bring a Repair Order (RO) customer information, get eligible programs, prepare the contract, and then have the customer e-sign the contract on the i-Pad with their finger all in the matte of a couple of minutes. We have been touting the process as a tool to sell product in the service lane but in reality, it provides the dealer to sell the aftermarket products wherever the customer wants. It could be in the service lane, waiting area, showroom, or even out on the lot. We feel that this mobile aspect of F&I Express is another tool that can help dealers in expanding their aftermarket product sales without having to drag the customer to the F&I office.

Innovative Aftermarket Systems

Based on what Matt Nowicki with Innovative Aftermarket Systems (IAS) explained to me, IAS has plans for quite a bit of technological growth which will be a tremendous benefit to current and future customers. Matt explained IAS’s focus in the following excerpts:

SmartTrack Tablet Edition – We originally developed SmartTrac in 2001 and it has been a staple of our software suite since that time. SmartTrac uses video, audio, and other multimedia to present F&I products as an electronic brochure. SmartTrac started as a program intended to run on a standalone PC, but as computers got faster and more accessible, we modified SmartTrac to work on an F&I computer with a dual monitor.

We are now talking the next step in the evolution of SmartTrac by porting it to tablet devices such as Androids and iPads. At the same time we are modifying it to allow users to specify the year, make, and model of the vehicle being purchased which allows the tablet to display content specific to that customer. For example, if the vehicle being purchased is a Mercedes, we show content using Mercedes vehicles. And, obviously, with a Mercedes, repair costs are going to be higher so we tweak the presentations “on the fly” to present something applicable for that type of vehicle.

Electronic Interview – The vast majority of dealers in the United States utilize some form of the “interview/menu method.” But, most of those dealers only handle the menu portion of it electronically using software such as SmartMenu Complete.

We aim to change that approach by releasing a pre-F&I survey/interview which will pose questions to customers and then immediately deliver a “customer profile” to the F&I Manager complete with suggestions on which products have the highest chance of success for this customer and tips on potential ways to sell a given product based on the answers given by the customer. This solution will be multi-faceted: a web-based portal and/or a tablet version for Android/iPad devices.

SmartMenu Complete Administrator Dashboard – SmartMenu Complete offers so much more than just tiered and final menus, including various sales tools, OFAC reports, and identity verification reports. Up until now, most of our administrators (including agents and F&I directors) haven’t had easy to use tools to see how ALL aspects of the menu are being utilized. We are developing a web-based dashboard that will give these power users a plethora of data in easy to understand format.

Open Dealer Exchange (ODE) & Provider Exchange Network (PEN)

I spoke with Sarah Aberlich and Marty Zolan of ODE and with Mark Virag of PEN about what their respective companies are focusing on for 2011.

Open Dealer Exchange and Provider Exchange Network encompass software programs that work behind the scenes. So, many of the wonderful things a dealer can do electronically that so oftentimes are taken granted for are the things that ODE and PEN make possible. All of the data and the information that gets fed into the Dealer Management System (DMS) at the dealership is connected with Lender’s, TPA’s and Insurer’s to make the customer purchase and/or financing transaction flow seamlessly.

Through Credit Application, Contract Data Integration, and eContracting and Funding Packet Distribution, ODE’s focus begins with the Point-Of-Sales system within the dealership itself.

One “hot item” that ODE is focusing on (in conjunction with PEN) is Validation within the various systems. This is so important, especially when so many different documents are involved in eContracting and Funding transactions. Data from credit applications are validated against that entered on contracts which are also validated with information pulled from credit reports and other documentation. The key component here is that Validation is in process throughout the entire deal, not after it’s completed. This allows for changes and/or corrections to be made will before the contracts are signed.

What makes this possible? Real-time Processing! Real-time processing is the key factor in delivering ODE’s products and integration and validation services successfully to their end users. This is where PEN comes into play. PEN is the “behind-the-scenes” to ODE and allows F&I product providers and participating dealers the ability alers point-of-sales system. It does so because it can connect a provider to a variety of dealer systems, including (but not limited to) menu’s, portals, and DMSs.

PENs focus for 2011 is to expand on what is available to both Providers and Dealers and how to make the F&I process run much smoother and more efficient through the use of web-rating systems, eContracting, and access to up-to-date forms. This can be achieved through Validation and Real-Time Interfacing.

The Gist of It

Although we have only looked at what a few companies are focusing on, it seems that the advent of the mobile devices coupled with the internet and real-time processing are placing a demand on software companies that will push the strong and innovative to the forefront of the industry. These changes are necessary however, and are beneficial to everyone from the provider to the customer (and every player in between) through cost savings, efficient processes, and reduction of errors.

The software and technology industry is one of the fastest changing and most influential industries affecting businesses of all types across the globe. As new technology becomes available, so does new opportunities. These opportunities are available and can be utilitzed by almost any industry, and in almost any business process including finance and accounting, Sales & Marketing, and product advancements/improvements and innovations.

For providers and administrators in the Automotive F&I industry, many of the technological advancements remain invisible because the advancements that affect the products & services available are oftentimes behind the scenes.

Looking back over the past year and reviewing what was hot for 2010, some of the “hot items” were:

Though this list was compiled from several lists that were suggested software and technology hot topics applicable to businesses in any industry, many of the items on this list have been integrated into the software and products of the corporations that advertise, contribute, and read P&A eMagazine and eNewsletter.

This is evident in the many articles we published not only in the Software and Technology channel, but as expressed in many of the press releases and published news items as well. For example, since the beginning P&A eMagazine in early 2010, hot topics included Administration Systems such as SaaS (Software as a Service) solutions, Web-based solutions such as StoneEagle Group’s Secure Sales Tool (SST), and many other Electronic Processes such as OFAC checks, electronic vehicle service contract rating from within a menu, e-contracting and digital signatures, real-time contract delivery and debiting of accounts, EFT processes and more.

Many of these products and services mentioned, as well as those not mentioned, have come about as a result of new and/or improved web applications, instant & virtual technology, the need for additional portability and improved and reliable security solutions.

Integration was, and continues to be, another largely discussed topic of 2011 which incorporates instant & virtual technology, portability, and security into its capabilities and processes. And let us not forget the Red Flags rule and all of the software and technology that many companies are installing so that they can comply with its rules and regulations.

Many articles such as SaaS or Build: Which Administration Works Best for You (January 2010), Service Drive Opens Door to More VSC Sales (February 2010), Great Product Needs Great Process (April 2010), Relying on Technology Partners to Reach Dealer Goals (May 2010), and The Integrated Industry: Software Fact or Fiction? (June 2010) are all great examples of how providers and administrators in the automotive F&I industry are using and building software and technology that is directly related to these categories to make business more competitive, efficient, and profitable.

When P&A eMagazine began in early 2010 and throughout the year, many of the same items that were “hot” for 2010 are also “hot” for 2011, such as:

And the new one on the block is:

Although, Virtual Cloud Services were a “hot” item for 2010, they are even more so for 2011. Take Box.net for example. This company is a startup company which offers online storage lockers (the same concept as Cloud computing – meaning that it can be called up on any device with an internet connection). In 2010, Box.net closed out the year with five (5) million users, and according to a company representative it’s revenues tripled for last year, and they are anticipating steady growth and to double its workforce within the next 18 months. Now that’s growth!

We are all familiar with Mobile/Web Applications, and the influx of press releases are proof that companies are continuing to create access to products and services via mobile devices. They are here to stay!

Virtual Technology will continue to be an important part of information technology and the internet as it allows for a great deal of work to be accomplished from anywhere – home, airport, or anywhere you may be traveling. Voice recognition technology is a huge part of this and several large companies including Google & Microsoft.

Connectivity (and Portability) will continue to be a hot topic as the need for reliable cell signals and internet accessibility in remote areas is required. This hot topic is evident in the success of the iPad and arrival of many other tablets since it’s success.

And finally, Scalability. Though this is a new term to the group of Hot Topics, its importance is no less significant. Scalability (for those of us who initially look at this from the standpoint of “to scale” or measurements) is the idea that if the software or technology cannot grow with the corporation or with the product or service that it is associated with, it will most likely become obsolete in a short period of time. This is because the time and costs involved in manually improving or “growing” your IT capabilities can grow exponentially. In today’s economy, corporations are looking to maintain or cut costs, not continually add costs (especially ever-growing costs) to their operations.

As providers and administrators in the automotive F&I industry had incorporated “generic” hot topics in their products and services in 2010, they are doing so in 2011. P&A eMagazine recently spoke with several advertisers and contributors in the automotive F&I industry to see what the hot focus for their respective companies are, but that will need to be revealed in next month’s issue.

As the final month of the first quarter of 2011 approaches, I catch myself thinking, where did the time go? Last year came and went, the 2011 NADA conference has come and gone, the Agent Summit being held in conjunction with F&I and Showroom and our sister publication Agent Entrepreneur will be underway next week, and we are running full speed ahead into 2011.

VMS Publishing is very proud of its wheelhouse of publications. And looking back at 2010, we not only brought on our successful agent publication, it was also the year we initially started P&A Magazine. P&A Magazine has a lot to be proud of in this past year, and the efforts that have been made to start and maintain its success, through our advertisers, contributors and readers is nothing less than amazing.

That being said, as we did in our January publication of Agent Entrepreneur, I want to extend a thank you to all the people who have made it happen, and to present to you the top ten (10) stories of the year. In addition, as I mentioned for those involved with our sister publication, I want to let all of you who put long hours in setting your ideas, experiences, and expertise on paper, that all articles that we received were nothing short of excellent and remain to be viewed, regardless of being in the top ten nor not! Thank you.

The following are the top eleven articles for 2010 – that’s right, there was a tie in eighth place. You can read the article in its entirety by clicking on the provided link following the article description.

#1 Where Have All the Good Inspectors Gone & Who is Filling Their Shoes?

As a little girl, I didn’t grow up dreaming of becoming an owner of an inspection company, but that is what happened. Now there is no business I would rather be in for a variety of reasons. Over the years this industry has been very good to me and my family. Many of my closest ….

#2 GAP: Is There Hidden Equity in the Unearned Premium Reserve?

This article explores a little-discussed issue for writers of GAP policies: are we earning the premium correctly? Earned premium for most insurance policies is calculated evenly over the term of the policy. For example, an auto insurance policy for one year will recognize 1/12th of the premium each month for the entire year the policy is in effect….

#3 The Integrated Industry Software Fact or Fiction?

It is amazing that in 2010, 50 years into the Information Age, one of the toughest problems we face in our industry is the integration of various mission-critical software applications with the typical dealership management system (DMS). P&A Magazine spoke with industry experts about the current “State of the Industry” as it pertains to integration.…

#4 Web Services: New Technology or New Hassle?

I moderated a panel on web services at the VSCAC conference on Sept. 15. The panel consisted of Brent Allen, President, Stone Eagle Insurance; Kumar Kathinokkula, COO, F&I Administrative Solutions; Mark Virag, Managing Director, Open Dealer Exchange; and Brian Reed, CEO, Intersection Technologies, Inc. The following are some thoughts I took away from this session.…

#5 Should We Create an Association

Want to bring true value to your client or dealer partner? Provide them with the following essential components for capturing the full F&I profit potential on every traffic source: the Internet, phone and walk-in. The initial components, Product Drives PVR and F&I Participation Throughout the Sales Cycle are designed to update the F&I and sales …

#6 Call to Action: Inspectors Need Certification to Improve Credibility

The vehicle service contract industry has been serviced by the independent inspection industry for many years, but issues still plague inspection agencies, service contract administrators, their clients and contract holders. A call for greater accountability is in order. Vehicle service contract administrators require independent inspections prior to making decisions about the validity of claims …

#7 Changing Warranty Terms: Impact on Service Contracts

In the last five years, manufacturers have generally increased warranty terms on vehicles sold, even though a few have recently scaled back or reverted to the former terms. If you sell new or extended eligibility coverage, this change will impact your business in several different ways. First, and most obviously, it will lower the costs …

#8 Automating the VSC Claims Adjudication Process: Opportunities & Challenges

Automation, systems integration and industry standardization can deliver great efficiencies, service improvements and cost reductions in the claims adjudication arena of the service contract industry. In an age where technology is making business in every industry more efficient, the claims process is no exception. However, there is much that can still be done. Challenges to …

Is also tied with:

#8 GAP: Back From the Brink

In 2008, many administrators were concerned about the profitability of the GAP business. Not only was the frequency of claims increasing, but the severity of GAP claims were going through the roof. Used-car prices were collapsing as demand dried up – and insurance companies were settling total losses at a significant haircut from one year….

#9 The Menu Dilemma: Choosing the Best Strategy

Very few providers can say that their rates are available electronically through every menu system on the market. In fact, to my knowledge, the answer is none. How often have you heard that the only thing stopping the signing of a new dealer group is the ability to get your rates on their menu system?…

#10 The Time for Self-Regulation is Now

There are plenty of examples of why the auto finance industry needs to police itself, but little has been done to protect a key revenue source for dealers. One provider says it’s time for that to change. Regulations are a fact of life for businesses in the automotive industry, and providers of vehicle service contracts …

Again, though these are merely the top ten most read articles, there are many more very interesting and quite informative articles that fulfill every goal that Providers & Administrators eMagazine has set out to attain. In 2011, we will continue on this path and are looking forward to providing you with even more information and inspirations to assist you in making the right decisions in your businesses.