Auto IT CEO and co-founder, Ken Fyfe chats with Computerworld as part of our ongoing Homegrown series.
Computerworld: Auto IT is a specialist in car, agricultural, trucking and construction equipment dealer management systems. Tell us about them.
Ken Fyfe: Dealer management systems are very large and standard accounting systems just don’t fit into car dealerships as they have selling of parts as really big – a standard metro sized dealer could sell a million worth of parts a month – the process and the logic behind that is quite complex.
Then there’s the servicing of vehicles so you need service history information, and when a car drives up to your dealership if you’re any good, they should know the owner by their first name and know the history of the car, try to up-sell you and make money out of the servicing.
There’s the accounting over the top of all that, then you need to sell vehicles, make sure there’s a profit on them, make sure that if you try to up-sell accessories you know quickly what kind of profit you’re making on the car before you sell it.
Then you have finance and insurance, so they tend to be large systems and the companies that specialize in this tend to be large companies.
A salient point is that standard accounting systems do not work in dealerships because in vehicle sales there are a lot of tax rules around it and it needs specialist software. So our competitors tend to be half a billion dollar global software companies.
What are the origins of Auto IT?
We started off as a company called KGM management which was formed in 1987. That company was part of an accounting firm and they happened to have a dealer management system which they had won a contract to write for a number of dealers in Australia.
When we started in 1987 we had 14 clients and we didn’t know what we’d let ourselves in for. At that stage there were nine companies selling dealer management systems and we were the ninth – the smallest and the major competitor was a market gorilla. So we knew we had to be different.
Tell us about your technology
Technologically we wanted to get on a better platform so we took the system off big mid-range computers down to local area networks which in the late ‘80s were in a rather embryonic stage.
We started looking at a rewrite and also found that most of the big car dealerships were already services by other players so while we had a car system we also started looking at agricultural and to be honest we were mopping up what was left.
The systems were running on NCR mid-range computers and Data General and we decided to go down to local area network PCs and move to DOS-based products and that worked well for us as competitors tended to operate on bigger, more expensive computers.
The software didn’t have any problems running on less powerful PC – Novel networks a and so one were reasonable mature at the time. The software at that stage was proprietary Cobol written for NCR operating systems and Data General’s operating systems.