Mitchell on New Industry Technology
Alex Sun has been involved in the collision repair industry for most of his life. Growing up in Queens, N.Y., as the son of Chinese immigrants, he had the opportunity to observe how his parents ran several of their businesses, one of which was an auto body shop and another a small insurance company. Years later, after leaving New York and graduating from the University of Chicago, Sun went on to pursue a 10-year career at Merrill Lynch as vice president of the company’s investment banking division before holding the position of chief financial officer and vice president of finance and administration for an enterprise software company.
In 2001, Sun brought his experience to Mitchell International Inc., where he became chief financial officer. Since then, he has transitioned to his current role as president and chief executive officer. Here, Sun shares his insights on new technologies that are transforming the industry, how these technologies affect the way collision repair shops operate, and the best technological investments that repairers should make right now. He also tells us about Mitchell’s recent business acquisitions and where he wants to take the company in the future.
What, in your opinion, are the most interesting ways the collision repair industry is evolving?
As with any other competitive industry that’s evolving, what I find most interesting is how the collision repair industry is embracing advanced business management thinking. Every aspect is fascinating, from how shops manage, motivate and train employees, to how they re-engineer or re-think their processes and, in some cases, their business models, by adopting technologies to improve how they do business, be it operations or managing customers. The owner profile at collision repair facilities is transforming, too. More and more, we see that owners are moving from being primarily craftsmen to being businessmen and women.
Which new technologies are having the strongest impact on transforming the industry today?
Clearly, the advances in automotive materials and components are making vehicle repair more complex. In terms of how collision repairers run their business, the most significant change will center on computing services “in the cloud.” “Cloud computing” is a catch-all phrase for accessing computing power, running software and storing information on a third party’s technology infrastructure. The Internet itself is a ubiquitous access point. Thanks to advances in both technology and availability of broadband, repair facilities can now access very robust business software—that in the past would have required much more cost and maintenance within the four walls of a body shop—by using a reasonably priced computer, a Web browser and a broadband connection.
How do those technologies affect the way shops operate?
In some respects, these technologies have not changed. They are designed to improve how a business operates through faster or automated performance of certain tasks, electronic communication with business partners, as well as access to information that can be analyzed to improve business operations performance. The most compelling change is that the cost of ownership—both in hard dollar terms as well as in the degree of technical difficulty—has and will continue to vastly improve.
All this said, many new capabilities are being introduced. Take for instance Mitchell RepairCenter, our solution for a unified workspace for many technology functions. Within Mitchell RepairCenter, we have introduced TechAdvisor, which is all about accessing vehicle repair information when you need it—during the estimating process and during the repair. As cars become more complex in manufacture, it becomes increasingly important that access to the most up-to-date technical repair information be available. Rather than relying solely on reference guides (materials that Mitchell has been publishing for over 60 years), through Mitchell RepairCenter we make this information much more readily available and deliver it at a point in the repair process where it is most needed and most easily consumed. Ready access to critical information is the key.
In general, what financial impact does embracing new technologies have on collision repair businesses?
The impact will be about lower cost of ownership while enjoying greater access to a broader array of capabilities. Simply put, advanced technologies should allow collision repairers to be more productive and better connected with their partners and customers. They will have happier customers and partners, and will operate more efficiently, with (we hope) more money coming in the door and less money going out.
Do you foresee the advent of smartphone technologies interfacing with management and estimating systems playing a bigger role inside the shop?
Yes. Not only does Mitchell RepairCenter bring automated vehicle statusing to the market, we have already enabled some of the core management system functions in Mitchell RepairCenter to work on the iPhone, with more capability on other smartphone devices soon to come. These tools enable mobility for shop owners and managers, which will transform how they do business. Could you imagine just a couple of years ago that a manager could walk through the shop with a handheld smartphone, review vehicles in the bay and update information, electronically send tasks to employees, take photos, capture videos and voice memos, then have all that information be part of the repair order? Or, could you have imagined just a few years ago that a shop owner could actually go on vacation with the family and still be able to see the status of every vehicle in the shop, identify a bottleneck, and send a task to a production manager in real-time from a smartphone? Many would not have thought that possible. It is now.
Could you describe some emerging technologies and how they will come into play in the coming years?
While not necessarily emerging, there is no question that Software-as-a-Service (SaaS) or cloud computing will make technology more accessible and affordable. Smartphones used as devices to run many aspects of a business (not everything) will clearly continue to evolve. I also believe that one does not have to look too far to see what else may be coming. Even social media sites like Facebook are introducing or “socializing” us to technologies that will eventually become more than just a way we make or keep up with friends, but also how we make and maintain business relationships.
What are some of the best technological investments collision repair operators could make right now?
These are challenging economic times—pretty much for any business operator—so focusing on the basics is where I would suggest investing your money. What helps bring customers in or makes happy customers? What helps control dollars that leave your shop? Customer and operational excellence is what we all want. This country is too great not to come out of the current downturn. We all need to invest in our businesses, such that when we do emerge, we are in the best position to win.
Is making technological investments something financially feasible for shops of all sizes? What is the range of such investment?
Yes, it is feasible. As mentioned earlier, solutions like Mitchell RepairCenter have been designed to make access easier. Some capabilities cost nothing—like Mitchell RepairCenter QuickStart, a tool that any shop can download and immediately use at no cost. Other tools that can really drive improvements in your business may require an investment of up to $1,000 a month. Put that in perspective, though… if these solutions can make a meaningful difference in either bringing money in or helping keep costs down, I would think that spending $1,000 (or one percent) on, say, a business that generates $100,000 per month in sales is a reasonable price to pay.
How do you envision the future of collision repair and the role technology will play?
My vision for collision repair is no different than that of any large, mature industry. There is an abundance of competition, customers are ever demanding, and to win, a repair facility has to execute better, work harder and be smarter. In the end, technology is just an enabler. The business operator must have the vision and will for winning. Adopting technology is just one tool to improve how you operate.
Mitchell has recently made some business acquisitions. What will these acquisitions allow the company to do, and how do you envision it changing the industry?
Mitchell recently acquired two businesses in the collision repair and property claims market, Scene Genesis and ClaimTools. Scene Genesis is a revenue-generating play for our collision customers—it brings new work to their doors. ClaimTools is an efficiency play for our customers—it automates the existing and painful photo management process.
Scene Genesis offers a product called SceneExchange, which is a technology-enabled marketplace that allows us to deliver repair opportunities to our collision customers that they wouldn’t have access to otherwise. Basically, the system captures estimates written by IAs (insurance adjusters) for certain insurance customers and sends the estimates to local shops who can then decide if they want to do the work or not. If the shop wants the job, they bid on it in cycle time (how quickly they can complete the job). Then, if the customer likes the shop and cycle time, the repair is theirs.
ClaimTools is an advanced digital photo management system that collision shops, insurance carriers, and independent appraisers can utilize to capture repair photos at every stage of the repair, wirelessly download them, and automatically file them in the appropriate repair file. This is an efficiency tool for our market that we believe can save a user hours a week of administrative time otherwise spent synching photos, manually sorting them and making sure they are stored appropriately.
Where do you want to take Mitchell International Inc. in the future?
The demand for technology innovation is very high. Mitchell has—in particular with our latest release_notess of RepairCenter and WorkCenter, which is our carrier-centered solution—established itself as a leading innovator of technology systems for the collision repair and P&C insurance industries. Couple this with our long history of providing the best repair database in the market, and I believe Mitchell is and will remain a vital and trusted partner to our clients. That said, look for us to:
1) continue to improve how we deliver products and services to our customers as we focus on driving the cost of ownership downward and ease of use upward;
2) identify other areas within the business process that can benefit from technology automation (build and/or buy–like with ClaimTools and Scene Genesis); and
3) better connect trading partners to improve those activities that extend beyond the four walls of a collision repair shop or insurance office.
Finally, I hope to continue Mitchell’s tradition of “Loving Our Customers.” In the end, our clients are passionate, committed business people, so we need to share their passion and do what it takes to make them as effective as possible.