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National Power Outage

We take electric for granted. It powers things we use in our every day lives and quite frankly, without it, we feel pretty helpless. Even temporary blackouts cause us tremendous pain and inconvenience. Temporary fixes such as a backup battery or portable generator help some, but the end result is we end up sacrificing something.

Similarly, your dealership data is the power (electricity) that drives so many of the tools that you count on each day. Without a steady stream of data, applications become “underpowered” and oftentimes totally useless. So who is responsible for keeping the lights on? Let’s face it, when the “power” goes out, everyone typically stares at each other and then the blame game usually begins. Needless to say, the troops in the trenches that rely on the applications from hundreds of vendors nationwide all suffer. Their ability to sell and service more cars is impacted and ultimately the bottom line suffers as well. In the middle of the “power outage” is your own IT staff, trying to figure where the tree went down and what lines are blocked. The pressure to turn the lights back on is very high. Questions are asked, fingers are pointed, and great business relationships are put at risk.

who controls your data flow?

The Grid

Sadly, while the electricity is owned by your dealership, the grid is controlled by the utilities. They can stop your electric from reaching the intended recipients. When the grid shuts down, the recipients are in the dark and will often times ask you or their sub-station to help them get back on-line. Unfortunately, the sub-station (data aggregators) are also at the mercy of the public utility.

Your Electricity

So here you are with electricity, but no way to deliver it to the applications that power your dealership. The sub-stations are at a loss as well saying we can’t help you. The end result is the great solutions that you contracted for are underpowered and lose their return on investment. Your sales teams and your service teams heavily impacted, and your I.T. staff is simply tired of the pain and the fire drill when the lights go out. So what is the answer? Will ALL of the great technical solutions nationwide be willing to pay a tax to use the grid to get your electricity? Unfortunately, most can’t or won’t for fear of escalating taxes and the fact that the additional costs would make their solution unsellable.

Taxing your Electric

Let’s look at a real-life example. I visited a large dealer group in the last 60 days that happened to be delivering data to nearly 100 different places. The costs to get that data delivered to the different solutions can be broken down into 3 different buckets.

  1. Grid fee (the vendor chooses to pay the grid provider) for your electric

  2. Off Grid fee (the vendor chooses to pay a sub-station) to try to connect for you

  3. IT Man hours. (there is a tremendous amount of work to transfer your electric yourself directly to your vendors (application providers)

Sadly, these fees are most oftentimes hidden between the lines. For vendors who choose to pay the grid fee, it is forbidden for them to show the tax they are paying to your electricity. For off-grid fee vendors, you might actually see the tax on your electric. From an IT perspective, it is simply a matter of man-hours and pain. When you start adding up all of these costs, the simple fact is you are getting heavily taxed on your own electricity. So what happens if the utility company becomes the only way to access your electricity? Like any monopoly, you can expect significant increases in costs from all of your vendors. Unfortunately, many of the vendors will simply vanish leaving fewer choices and even higher prices. The current outlook is very dark.

Let there be Light

Given the options, there may be only limited solutions to the current problem. For some large dealer groups, is has been a matter of taking their data into their own hands. They are investing heavily in cloud resources to create large data stores where they can move distribute their “electricity” freely. Ultimately, this solution is straightforward and logical. Move your data to the cloud, where it can be normalized, secured, and then distributed without any additional costs to your vendors. This has numerous benefits including some that meet the guidelines that NADA reminds us of.

  • It gives you the ability to manage all of your non-grid data movement to make sure you keep up with all federal and state law.

  • It increases your data security

  • It gives you total control of the exact data you are distributing.

  • It will lower your over-all vendor costs because you are giving them the electricity they need at NO COST.

The bottom-line is that it is time to tackle this problem. Blackouts, brownouts, you name it, are extremely costly to all. We simply cannot depend on the utility companies to come up with a solution that will meet the needs of everyone.

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