The new weapons against theft are the black light and a microscope. Law enforcement can now use a black light for quick identification of stolen vehicles or automotive components and a microscope to determine the property’s owner. DataDot Dealer Services (DDS) offers, a theft deterrent system that utilizes a unique microdot identifier that is fitted to 60-80 components of a vehicle.

The Product

DataDots are tiny microscopic discs (microdots), which contain unique information that links property and owners. As small as a grain of sand, DataDots are recognized as being one of the most effective ways of preventing theft, and play a crucial role in the recovery and return of stolen goods.

Single inscribed “microdots” were originally developed by the U.S. military in the 1940s to covertly identify items. It became obvious the tiny plastic discs would be useful for espionage as the grain size message carriers were very easy to conceal and transport. It was not until the early 1990s that microdots became a commercially feasible product. A U.S. engineer, Brent McLaws, was the first to develop a low cost process to inscribe information onto thousands of microdots.

Ounce of Prevention – Pound of Cure

Encoded on polyester substrate, Automotive DataDots can be installed on a production line or in a dealership. Either way, they provide undeniable proof of ownership. The adhesive used to apply the DataDots contain an ultraviolet tracing agent that fluoresces under an ultraviolet or black light, allowing dots to be easily read with a magnifier, but are difficult to detect with the naked eye. Water-based adhesive is clear when it dries and can be applied to any surface. When the adhesive is dry, it is resistant to solvents, road salts and cleaners. A typical vehicle offers many points of application, including the chassis, engine, drive train, exhaust, suspension system and after-market parts, where DataDots can be installed.

All DataDot Automotive Kits sold in the USA are registered on the DataDot International Database with the contact information of the purchaser and the unique PIN of the dots in the kit purchased. In addition, PINs are registered with the Insurance Services Office (ISO) – the most widely recognized database for patrol officers in North America. If a vehicle or part marked by DataDots is stolen, law enforcement can access these databases to affirm an owner and return recovered property.

Thieves are ever changing their approach and instead of stealing an entire car, they steal parts of the car. Catalytic converter theft has risen significantly due to the rising cost of the rare metals. Rental car companies have parts removed by renters and replaced with defective parts of the renter’s personal vehicles with no way to prove otherwise.

OEMs have struggled with warranty fraud for years. DataDots on vehicle parts proves if the part is OEM or not, eliminating warranty fraud from the substitution of expired warranty vehicles. Also, OEMs no longer have to compete against stolen parts and can increase their genuine parts sales.

DataDot USA Inc., currently is the only manufacturer that can manufacture VIN microdots for just-in-time delivery to OEMs anywhere in the world with five manufacturing facilities: Spokane, Washington; Taiwan; Sydney, Australia; South Africa (two plants) and the United Kingdom. The DDS automotive product comes with one to five years of warranty (dealer selected) and has a benefit of $500-$5000 (dealer selected).

Distribution, Sales and Support

In 2004, DataDot Technology (DDT) approached T. Rick Hughes, founder of DDS, to market the product in the U.S. as the exclusive distributor for the automotive industry. As a former employee of Pat Ryan and Associates, Rick had the training, the contacts and the vision to crack the U.S. marketplace. There are now over 100 million microdots on vehicles in the U.S. and the number grows annually.

DDS distributes the product to distributors, agents and major dealer groups. Major distributors are JM&A, EFG, Ethos Group, Ally Financial Services, Resource Automotive, IAS and others. In Canada, Leader Automotive Resources is their primary partner serving over a thousand dealerships.

All distributors are required under contract to provide an A-rated insurer if they choose to underwrite the limited warranty benefit (available for production levels of 15,000 monthly or greater). Assurant Solutions is the current A-rated carrier.

A partnership with IAS, using the SmartPad application, is the most recent addition to the marketing and sales presentation. E-Rating and e-Contracting are offered and there is full menu integration with over 19 menu systems and contracting in English and French, with Portugese, German and Spanish soon to follow is the result of the partnership DDS has with F&I Administrators.

Future Technology

The physical product used by DDS is either a polyester substrate or metal for higher heat applications. New stainless steel microdots are being delivered to a limited number of test sites and DDS expects to manufacture ceramic microdots for extreme heat applications beyond the automotive industry.

As more OEMs mark vehicles as they are produced for sale in the U.S. market, the move to a theft deductible waiver from the OEM and a VSC upgrade or combination will become available.

Today, DataDot Technology (DDT:ASX) is a publically traded company that manufacturers the microdots under the trade name DataDotDNA^®.

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.

For automotive F&I providers and administrators, Information Technology is the third largest expense after people and administrative costs. A majority of that cost goes toward the upkeep and maintenance of the core administration system(s) responsible for products, rates, dealers, contracts, claims and earnings management. Given the central role that the administration system plays, and especially in circumstances where it has been internally developed by a few key individuals, it is perhaps not surprising that the system and its attendant functions are sometimes viewed as a competitive advantage.

To deliver a competitive advantage, an administrative system needs to provide at least one of the following:

• Support a product or solution that no one else can offer
• Enable support for a product at a lower effort and/or cost than others

When Legacy Loses Uniqueness

Unfortunately, while the internally developed system may have started out delivering on these requirements, it becomes increasingly more difficult and expensive for the development team to keep the uniqueness going. In fact, as more products and product permutations have hit the market, most teams have become consumed with keeping up with basic product requirements; maintaining the uniqueness that they originally delivered becomes secondary. In other words, that thing that set them apart at the start is lost in the effort to keep up with the competition.

F&I business priorities today require administrators to provide a complete portfolio of F&I products through a diverse set of sales channels with flexible and customizable accounting, commission and reinsurance programs. The greatest challenges to legacy systems are that they can only handle one or two products, can only support a few point-of-sale tools (e.g., menus) and have prohibitive modification costs for even simple changes. In addition, continuing to support in-house systems requires considerable overhead including salaries, benefits, building space, application licenses and liability. Moreover, continuing to maintain a custom administration system forces businesses to continually mitigate the key-man and technology obsolescence risks.

Emergence of SaaS

In recent years, many industries have taken advantage of the rapid commoditization of computing and have moved to outsourced or Software as a Service (SaaS) solutions for their technology needs. The debate is not one of if SaaS solutions are the right step, but of how and when to adopt such solutions. Adopting SaaS solutions allows providers to set service level standards for vendors, thereby enabling them to focus on managing factors that provide the true competitive edge: products, business processes, branding, data and partnerships. SaaS solution providers are usually focused on one thing: the software. They have more than one customer and can therefore maintain a much larger development team than any individual provider, so they are able to keep up with business demands and often also get “ahead of the curve” when it comes to connectivity and innovative solutions.

As such, when adopting a SaaS solution, providers must look for a system that will allow for management of a complete product portfolio, retain those business processes that give them a competitive advantage, allow open access to their data and build high-performance partnerships.

It is extremely tough to finance an internal development team that can commit to all of this and deliver it in a timely manner. By adopting the right SaaS solution, a provider will gain a competitive advantage through a system that can support all of its business needs now and into the future. In addition, it enables the team to focus on true business priorities as opposed to technology challenges.