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E-Commerce and the Collision Repair IndustryPosted 1/16/2001
By Angie Wilson
A glance at the courses offered at the International Autobody Congress and Exposition (NACE) recently will tell you that the Internet is altering the way business is done. Some major players in the industry have moved beyond simply displaying information on their Web sites, and are allowing customers to conduct some or all of their business with a few clicks of a mouse.
Whether you're buying parts, sending an estimate or wanting to calculate your current customer service index, the Internet and its e-commerce functions are changing the way you do business. And the trend will continue, according to most experts, because your profit goes hand in hand with speed and efficiency the very benefits the Internet has to offer.
The Inescapable Internet
In today's collision industry, repair shops run a risk of falling behind if they do not integrate the Internet into their everyday operations. This was the main theme of a NACE 2000 Congress seminar, Get Online...Or Be Left Behind, presented by Frank Turlep, Carstation.com.
The growth of the Internet can be illustrated by several statistics. Turlep said seven new users gain access to the Internet every minute, and 3,000 new pages are added every second. Turlep said surveys indicate that more than 70 percent of the automotive industry is now on the Internet. A recent survey of Automotive Service Association (ASA) members shows an even higher average, with 89 percent reporting Internet access at work.
Turlep said the Internet took only five years to accumulate 50 million users - faster than any other medium. With these statistics present, he said, Companies in this industry will realize that they cannot stop the Internet.
Turlep believes that it is important for all collision repair shops to integrate the Internet into every facet of their operations, including administration, parts, insurance and estimating. He cautions shop owners to ask questions before purchasing Internet-based systems, including how many people use the online product or service, and if you can have access to customer referrals.
Turlep believes the Internet's main contribution to the collision industry is improving supply chain management. It brings together a network of suppliers, paint companies, insurers and customers. This is all going to happen. But, it is not going to happen as quickly as everyone thinks it is.
Although drastic changes may not occur quickly, Turlep suggests that shops begin preparations now by installing phone lines in each bay to be used later for Internet connections. Whatever made you successful in the past won't in the future, he said. If you want to be a winner, the Internet is the technology that will drive you there.
Turlep predicts the disappearance of several entities that drive the collision industry today. He believes snail mail, fax machines, printed materials, CD-based estimating systems, imaging systems and management systems, individual resources and printed bills will all yield to Internet applications. These new implementations will benefit the industry by providing a lower cost of doing business, reduced cycle time, improved trading partnership relationships, higher customer retention, revenue and marketing expansion, and updates of equipment via the Internet.
Trends for the 21st Century, another NACE seminar, also addressed technology and repair changes likely to influence the collision repair industry. The seminar was moderated by Rick Tuuri, director of industry relations, ADP, and included a panel of six industry experts. Panelist Peter Largen, vice president of product management, DriveLogic, outlined several trends that drive our technology choices, naming three key areas: the benefits of hosted environments, the value of Internet-connected communities, and trends in consumer technology use. Largen predicts that in the future, other companies and other employees, rather than your own, will maintain the systems necessary to run a repair business, and that shops will access these systems through their browser.
The green-screen terminal of the past is now the browser, said Largen. The choices that will be available (to collision repair businesses) will all be on the Internet. The caveat will be high-speed access for everybody. Largen said that today, high-speed access is appreciated by consumers; tomorrow it will be demanded or you'll lose their business.
A Dynamic Industry
Companies are forming alliances that combine hardware, software and services designed to save time and money for collision shops. And there are a lot of products from which to choose.
Recent announcements include an e-commerce product offered by CCC Information Services called DriveLogic. It's designed to enhance supply chain efficiencies and cut the average claims cycle in half. According to one DriveLogic report, the auto insurance industry pays roughly $95 billion in claims cost, $40 billion of which is related to accident management, including coordinating the auto repair and replacement process. In studying these claim costs with McKinsey and Co., CCC estimates that roughly 27 percent, or $11 billion, of this $40 billion was waste that could be eliminated through effective use of Internet and wireless technologies.
At AutoVista's NACE press conference, company representatives discussed their end-to-end Internet services. AutoVista introduced a new product called Your Way, which includes a suite of services that can be customized to each business. During the press conference, open standards, security, systems integration and flexibility were discussed.
At another NACE press conference, Ensera announced the release of iON Connection 4.0, the company's Web-based auto claims processing system that imports both digital and scanned images into a claim file with security and watermark features. The company also announced its ability to provide direct, wireless connection from the field to the Internet-based application. A strategic partnership with Keystone was also announced.
Also featuring an Internet-based claims processing system, ProcessClaims touts the following benefits to collision repair facilities: fast claims processing, elimination of redundant estimating and imaging, reduction of costs and enhancement of productivity. The system is also designed to improve effectiveness and efficiency of communication with the customer and insurance company, reduce cycle time/streamline the repair process, and provide online/real-time management reports. The company emphasizes that its only goal is processing claims.
Everything from Parts to Paint
Picking up the phone used to be the fastest way to acquire most parts and supplies, but the ability to order products online is growing.
NextPart is a virtual distributor of recycled auto parts that enables repair shops to locate and purchase those parts. The company coordinates delivery, processes payments and provides warranties on every part sold. A toll-free call center is also available for shop owners who prefer to order by phone. NextPart recently announced a strategic partnership with United Recyclers Group.
iSalvage, an Internet-based procurement network for recycled and remanufactured parts, and eAutoclaims.com, a business-to-business e-commerce company, have formed a strategic business alliance. eAutoclaims member shops and insurance companies will now work with iSalvage to find and procure recycled and remanufactured parts.
ChoiceParts is another Web-based source. Founded through a partnership among CCC, Reynolds and Reynolds, and ADP, the company offers collision repairers a private, online business-to-business exchange to help them locate, buy and sell parts.
iStarXchange offers a secure, independent information exchange via the Internet. The company offers real-time point-of-sale information sharing and provides product visibility to all members of the supply chain, including both OE and aftermarket parts.
In another recent announcement, Car-Part.com, which offers recycled parts via the Internet, reports serving 3.5 million hits and 400,000 part searches per month. The company has announced a long-term arrangement with CCI-Triad.
Ford, DaimlerChrysler, GM and Bell & Howell have combined their efforts to form a business-to-business integrated OEM parts and service portal. The program, called CollisionLink, is designed to streamline the collision parts specification and parts ordering process between collision repair facilities and OEM wholesale dealerships.
Lori Northrup, CEO of ToolSource, an online source of tools and equipment for technicians, says successful Web-based companies put the customer first using three fundamental e-commerce principles.
A customer visit should be interactive and versatile enough to establish a personal connection; the site should contain customized information on the products, and the site should provide prompt delivery of the product to the customer, she said.
Paint companies are also offering more products and services online. At NACE, Sherwin-Williams demonstrated E-Store, the company's enhanced Web site that allows shops to order products and access color formulas directly online. You can read more about the latest paint company products and trends in the March issue of AutoInc.
Another NACE seminar, E-Business: Defining the Supply Chain, moderated by David Schwartz, vice president of business development for AutoVista, addressed new technology issues emerging in the collision industry, including wireless functions.
Jim Laning, claims consultant for State Farm Insurance, believes that Internet, satellite and wireless connections, Web estimators, streaming video and broadband technologies can help decrease the amount of administrative work faced by collision repair facilities.
The Internet's true uniqueness is its ability to reduce interaction, he said. He predicts that motorists will be able to use their wireless Web cell phones and Palm Pilots to submit claims in the future. He also said customers will be able to use the Internet to schedule appointments, view vehicle status, pay deductibles, arrange vehicle delivery and complete customer service indexes.
Panelist Bill Lawrence of Caliber Collision Centers spoke of information flow inadequacies within the industry and how these problems may be solved by a migration to the Internet, especially Web-based management systems. (Learn more about the latest online options next month when AutoInc. features the online offerings of information providers.)
A customer relationship management company, destinationCRM.com, recently brought together a panel of 21 e-gurus to discuss trends for 2001. Although the panel's focus was not specifically related to the automotive industry, they predict a spiraling increase in wireless Internet sessions over the next five years; corporations moving back-office e-mail response sites offshore to cut costs; and stepped-up government scrutiny of e-business. 2001 will be the start of the emergence of wireless as a significant customer interaction channel, says Greg Stack, senior vice-president of eLoyalty, a technology solutions company.
Mitchell International announced its new wireless service at NACE. Mitchell Wireless allows insurance claims adjusters and shop estimators to file reports and estimates instantly. Adjusters remain in the field by using small, handheld devices to transmit claims data to claims management staff. Shop estimators can have a repair estimate printed for a customer while moving on to the next repair job.
I see a 300 percent increase in the frequency of customer contacts (for corporations) over the next three years based on self-service availability around the clock via the Internet and voice response, said Stack. He also predicts that by the year 2005, half of all Internet sessions will be wireless based on a combination of short, 30-second inquiries and voice-based browser interactions.
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