“Customer reception to our new Reynolds Generations Series solutions, which we introduced in mid-January, is strong.” So said Buzz Waterhouse, CEO of Reynolds & Reynolds, the biggest supplier of software to auto dealers, back in April 2002. Based on Microsoft’s .NET platform, the new software suite was supposed to revolutionize the way dealers manage their business. The “breakthrough solution” was even featured in a glowing Microsoft case study.
Too bad it didn’t sell. By the end of 2004, Waterhouse was out the door, as Reynolds & Reynolds reported disappointing results. This summer, new CEO Finbarr O’Neill pulled the plug on Reynolds Generation Series, announcing that the company would take a writeoff of $67 million. There were also warnings of “additional costs” down the road. According to Automotive News, the software was discontinued “because of poor sales, high implementation and training costs and substantial changes that were required in dealership processes to make it work.” In other words, it wasn’t worth the hassle.
It’s just another small sign of software fatigue. At some point, companies begin to see declining returns from additional investments in new software, and they decide their existing systems are good enough. For auto dealers, that point seems to be now.
Actually, between ADP and R&R’s lock on the market for the last 30 years and their poor service of said market, it’s been ripe for new vendors to come in and provide real value.
The problem is that the level of computing sophistication in dealerships is relatively low and they tend to go with what they know.
I’ve compared the situation, when I’ve explained it to various dealers, to it being the equivalent of purchasing a Volkswagen for $90k. Basically, you’re overpaying for what you get. Green screens. Text-based system. Click charges for printing. I thought this stuff went out with the 70s?
We’re currently evaluating a solution (which I helped implement at a previous dealership) that is based on the Navision accounting system.
But, you’re right, in general, software has often become more of a hindrance than a help.
Another thing: I think it’s also more than just software fatigue. I think it’s the whole product-a-minute that tech seems to spew forth. Is there another industry that has so many companies and products?