Technology has become critical to nearly every part of running a dealership.
Your employees depend on the DMS, CRM, Microsoft 365, internet connectivity, wireless networks, phones, printers, OEM systems, cybersecurity tools, and dozens of other applications to do their jobs.
So how much should a dealership actually be spending to support and manage all of it?
Questions such as how much it costs to open a dealership often focus on major startup expenses, but ongoing technology costs are another important part of operating and protecting the business.
The answer isn’t as simple as a dollar amount per employee or computer. Two dealerships of similar size can have very different technology needs—and very different approaches to managing them.
Some dealerships have internal IT staff. Others rely on an outsourced IT consultant or managed service provider. Many use a combination of internal and outside resources, including IT services for car dealerships.
The better question for dealer principals and executives is:
Are we investing the right amount in IT for the level of support, security, and reliability our dealership requires—and are we getting the right results?
When evaluating IT costs, it’s easy to focus on the most visible expense—whether that’s the monthly invoice from an IT provider, the cost of an outsourced IT consultant, or the salary of internal IT staff.
But that’s rarely the entire picture.
Your total technology investment may also include cybersecurity software, Microsoft 365, backup services, internet and connectivity, outside support, projects, hardware replacement, network equipment, compliance-related services, and other third-party technology.
That makes it difficult to determine whether a dealership is spending the “right” amount simply by looking at one invoice or salary.
More importantly, cost alone doesn’t tell you whether the dealership’s technology is being managed effectively.
Having someone available to resolve technology problems is important. But managing a dealership’s technology requires a broader range of expertise, ongoing oversight, and planning.
Day-to-day support, cybersecurity, infrastructure management, and technology strategy each require dedicated time and attention. An internal IT professional or outsourced consultant may handle some of these responsibilities well while needing additional resources or specialized expertise to address others.
The same applies to managed IT services for automotive dealerships. Outsourcing IT doesn’t automatically mean proactive management and strategic guidance are included—or consistently delivered.
Dealer principals should understand whether their IT resources collectively have the expertise, capacity, and processes to address the dealership’s needs, with clear accountability for each area.
That evaluation should start with several critical responsibilities:
Technology shouldn’t just be managed for today. Leadership should have visibility into the condition of the technology environment, upcoming investments, risks, and priorities. There should be a documented roadmap for where technology needs to improve and a budget for upcoming investments so decisions can be planned rather than becoming surprises.
IT shouldn’t only be about fixing what’s broken. Someone should be regularly evaluating the environment, identifying recurring problems, reviewing equipment lifecycle, finding security weaknesses, and recommending improvements before they result in downtime, unnecessary costs, or increased risk.
Employees need somewhere to turn when they can’t access an application, connect to Wi-Fi, print a document, use email, or resolve another technology problem. Reliable IT support for auto dealerships can help ensure those issues are addressed without causing unnecessary disruption to dealership operations.
Computers, servers, networks, wireless systems, and other technology need to be monitored, patched, maintained, and eventually replaced.
Dealerships hold significant amounts of sensitive customer and financial information. Multiple layers of security may be required, but equally important is knowing who is actively overseeing those systems, reviewing risks, and responding when something goes wrong.
User accounts, email, security settings, licensing, backups, access, and employee onboarding and offboarding all require ongoing management.
A dealership may work with a DMS provider, CRM provider, OEMs, phone provider, internet provider, and numerous other technology vendors. Someone still needs to take ownership when an issue crosses between systems or vendors.
This may be one of the most important questions a dealer principal can ask.
A dealership may have someone who is excellent at responding to day-to-day IT issues but doesn’t have the time or expertise to oversee cybersecurity.
An internal IT employee may handle users and computers while an outside company manages the network or security.
Or several different vendors may each be responsible for one piece of the environment. This is common when IT for auto dealerships is split between internal staff, specialized vendors, and outside providers.
None of those approaches is necessarily wrong.
The risk comes when everyone assumes someone else is handling an important responsibility.
For example:
The goal should be clear ownership with as few gaps as possible.
There is another component of IT spending that’s much harder to see: employee productivity.
Consider a recurring technology problem that causes 20 employees to lose just 15 minutes each.
That’s five hours of employee productivity lost from one relatively minor issue.
If similar problems occur repeatedly across sales, service, accounting, F&I, and management, the cost of poorly performing technology can quickly become much larger than the cost of resolving the underlying issue.
Management time matters too.
If a finance manager, controller, GM, or other employee regularly has to troubleshoot technology, coordinate vendors, or chase down recurring IT problems, that employee’s time is part of the dealership’s true technology cost—even though it never appears on an IT invoice.
That’s why the least expensive approach to IT isn’t necessarily the approach with the lowest visible cost.
There isn’t one number that’s appropriate for every dealership.
Your technology investment should reflect factors such as:
Instead of starting with an arbitrary IT budget, start by determining the level of technology performance, security, and support the dealership requires.
Then determine whether your current investment—and the resources responsible for managing it—are delivering those results.
You don’t need to be a technology expert to determine whether your dealership is getting appropriate value from IT.
Start with five questions:
If those questions are difficult to answer, the first step may not be spending more, hiring another person, or changing IT providers.
It may simply be gaining a better understanding of what you’re currently spending, who’s responsible for what, and whether you’re getting the results the dealership needs.
Technology should ultimately help your employees work efficiently, keep the dealership operating, and protect the business—not simply generate another expense.
Shartega IT works with dealerships throughout Chicagoland to evaluate technology costs, cybersecurity, operational risk, and overall IT performance. Through our experience providing IT services for car dealerships and supporting dealership technology environments, we help businesses identify gaps and determine whether their current IT investment is delivering the results they need. As a CATA Recommended Service Provider, we’re available as a resource to CATA members who would like a second opinion on their current IT environment.
Before asking, “Are we spending too much on IT?” consider asking two different questions: “Are we getting the right results from what we’re spending—and is someone accountable for everything that needs to be managed?”
