Getting the LAY of the LAND

This article is designed to provide an overview of the current estimating and management systems available for collision repairers. We're going to examine features and benefits you may not be familiar with and even consider a wish list of features that are currently unavailable but sure would be nice. Hopefully the vendors that provide these products will take a few notes.

Estimating data 101

There are three database providers currently being used in the United States: Audatex, a Solera Company, Mitchell International and Motors. These three companies subscribe to data services from the vehicle manufacturers worldwide and are used to provide information that an estimating system uses to determine flat rate times. The method of how flat rate times are calculated may differ between each provider. This is important to understand when working with the estimating systems that use this information.

Audatex data is calculated on the inner most part of a series of related operations. In other words, the times that are provided for a replacement item may be listed entirely on the inner most related part rather than listed separately for each attached part. However, both Mitchell and Motors provide replacement times for basically each item in the process. This difference is commonly referred to as "inside-out estimating (Audatex)" versus "outside-in estimating (Mitchell and Motors)." In the latter, estimating is like peeling an onion layer by layer to get to the inner most damage. Keep this difference in mind later in this article when we discuss the selection points for an estimating system.

Computer estimating 101

ADP introduced the first computerized estimating system (ShopLink) in the early 1980s. Mitchell introduced a Windows-based estimating system in the early 1990s called UltraMate. Motors, at the onset of computerized systems, elected to not enter directly into the market with its own computer-based estimating system, opting to license their data instead of developing a system of their own. For this reason, Certified Collateral Corporation (CCC) developed and introduced EZEst and then its Windows version Pathways. Also Comp-Est Estimating Solutions licensed the Motors data to provide Comp-Est to the industry. Today, both of these latter products are owned and offered by CCC Information Services Inc. In April 2006, Solera purchased the Claim Services Group of ADP, and re-branded its company in North America as Audatex, which has been used outside North America for a number of years.

Motors and Mitchell continue to provide paper estimating manuals for their data that also can be used to write manual estimates or verify estimates written with Pathways, CompEst and Ultramate.

Add-ons and options

Each estimating system has a number of options that you will need to wade through when making a selection. They may include basics, such as number of users, networked versus standalone, additional alternative part databases, photo imaging, communications, Collision Industry Electronic Commerce Association (CIECA) exporting, and additional tools such as production modules, estimate auditing, key performance reporting, total loss assessment and estimate exporting and sharing. The features can be very overwhelming for first-time buyers. To cover all these features would take this entire article so I will highlight a few of them. Keep in mind some systems include some of the options in their standard packages while others are listed a la carte.

In the last two years the industry's national trade associations Automotive Service Association (ASA), the Alliance of Automotive Service Providers (AASP) and the Society of Collision Repair Specialists (SCRS), as well as the committees from the Collision Industry Conference (CIC) worked with the information providers. As a result, ShopLink, Pathways and UltraMate offer a feature that allows insurers or independent appraisal companies to provide estimates electronically, so the estimate does not require re-keying from a printed copy at the shop level. This feature is designed to eliminate a huge time/money expense for the repair industry but only works between estimates from the same system, such as ShopLink-to-ShopLink, and does not provide a conversion to another estimating system. The challenge to date is the willingness of insurers and repair facilities to purchase this option and utilize it.

Which system is right for you?

There are several considerations when selecting what estimating systems you are going to use. Today it is often based on your business model and relationships established or what you are considering for your future. Are you planning to be part of a DRP in your market? This often determines the logical selection of the estimating system. Many insurer programs require a specific system and minimum options to establish communication between the repairer and themselves. This would be one of the primary considerations to review.

In any market one of the systems generally dominates the area. This is typically based on what the insurers and independent appraisers use or require in the market area. This is usually based on the aggressiveness and support from the sales force of the provider. I have traveled in many areas of North America and have heard testimonials for one system being the greatest and the others being the worst, only to find in another area the complete opposite opinion exists. Typically habit and comfort of the users with the system and the unfamiliarity and training of another system are two main reasons why one system is preferred over another.

I have worked with clients who will spend at least 60 minutes inputting a single estimate from another system into theirs to begin the process. This is often required to send the estimate to a management system (more later) to create a repair order. It does not take great math skills to figure out that the time spent on this process over the course of a month may far exceed the monthly cost of the other system.

This balancing act then becomes an issue if supplements are going to be required. This is one of the common causes of "short pays" in account receivables of many shops.

Mitchell and CCC both have options to purchasing their complete systems. Mitchell offers FirstEstimate, the Web-based program. You may purchase by the estimate and not incur a monthly subscription fee. With this system you may purchase "credits" at higher volumes to write estimates with no monthly fees, but a lower cost per estimate. CCC offers Comp-Est, which allows you to use the Motors database at a lower cost per month.

There are a few other programs available that license a different version of the Mitchell database on the market, if you are looking at a low-cost option. There are still a few around that are basically a "speed writing" program for which you still have to look up the parts and labor from a manual. They just do the math correctly every time and make the estimate legible and orderly.

Finally, you can always purchase the paper estimating guides from Mitchell and/or Motors to manually generate estimates and supplements through the other systems by using the manual data provided. Many shops have manuals from these two systems as backups and verification. Audatex does not have manuals for backup.

If paper manuals are being used, the knowledge of the system is even more critical since the proper use of the P-pages must be completely understood. This requires the estimator to know what operations can be added since they are not included in the replacement times automatically in some cases with computerized systems. These needs differ greatly from one system to the other. This requires training and possibly a "cheat sheet" available for all estimators. This easy reminder will help one not forget those items to add or subtract.

When working with clients I have found some very important additional considerations when selecting one or more of the estimating systems. First is training and the familiarity of the users with computers and Windows-based programs (see "Implementation, training and technical support"). All the systems provide CD-based, Internet-based, and/or classroom training for the proper use of their systems. Take them and continue to advance your system skills.

Management Systems – the next step for the future

So what is the purpose of a management system? A management system is designed to provide the user (the owner) with an automated system to assist in the "running" of your business based on standardized business practices. There is no doubt that the controversy has always been with by "who's standardized practices" they are based on. The way business is run in one part of the country is still different than another. The insurers realize this, otherwise we all would have the same labor rate and charge (and get paid) for the same operations.

In 1980, Auto Repair Management System (ARMS) began this with a basic system that caused a revolution in our industry. It was not just the software but also was a way of life. If you were an ARMS user you remember the training classes, peer groups and coaches. It was quite a change from what we were doing compared to what we were told to do.

This brings us to the subject of job costing. All management systems must minimally provide this feature to the user or its use (or selection) is suspect. To accomplish this properly isn't all that easy though if all costs associated with the repairs are unable to be tracked in the management system. This will include parts invoicing, labor costs (loaded and/or unloaded), and sublet/towing costs. For the most part, systems today do an acceptable job in this area. It just would be nice if a summary report could be produced that only took one page and could be analyzed quickly before a file is closed in all systems, rather than pages and pages of details to review.

Why a management system?

Unfortunately you may not like it, but it will force systemization and require assigning job functions and job descriptions to those who are using it. This is really a great thing, once it becomes a habit. But it will take time, some heartache, heartburn and patience...count on it.

Also after you read this article you may feel that today the systems available are not good and you wish to wait. I can understand your hesitancy. It's crazy that they have reported spending millions of dollars in development to only get to this point. Nevertheless, it is still time to get tuned in. They are not close to perfection currently, but you do need them to remain competitive in the future.

Features to look for

The features to consider when looking at management systems really revolve around how many of the management features you anticipate using or needing and how many transactions you are going to have. Volume makes a big difference. In most cases when visiting clients I have found only a small percentage of the features being used. Is this because they don't need them or want to use them? Generally no. I am not sure there can be too many features available; they just can't all be placed so they confuse the users. Look over the following questions ... if they're important to you then comparing features carefully will be the next move:

• Do you want to maximize customer retention and expand your business?
• Does the system store information about customers, agents, appraisers and insurers that you can use?
• Does the system allow you to send data easily to (or internally opens) a current popular Word processing program? This is important since letters with all capital letters and Times Roman fonts went out 20 years ago. The important qualifier to a "good form letter" is that it doesn't look like a form letter. Capitals and Times Roman fonts are a dead giveaway it is.

Do you have a room (an attic, storage barn or shop) full of parts you don't know where they came from or what vehicle they are for? If so, parts management should be critical to you. For that type of system here are a few things to consider:

• Are you able to add a cover page to the fax order? (Unfortunately some will require a lengthy "work around" to accomplish it.)
• Can the order be e-mailed and add photos to assist in getting the right parts?
• Can you return parts easily and then reorder parts?
• Can you update the part pricing easily in a single grid or does it take many clicks?
• Can you print return part slips?
• Can you print parts labels?
• Can you identify in a report all parts not received, back ordered, or not ordered from a group of vehicles?
• How is parts status communicated in the system? With elements like colors, messages or warnings?
• How does the system monitor profitability levels?
• Will a part price increase automatically allow one to generate a supplement?
• Will the system send the part price increases back into the estimate to update them?
• Will the part price increase be easily noticed and not forgotten?

If you want to produce a work order that uses consistent terminology you ought to consider a system with production management features. Things to look for here include:

• Can you produce a work order for your technicians that is readable and easy to follow?
• Can notes be added to ensure that the "special requests" are not forgotten?
• Can operations that are being assigned to non-production departments be filtered out?
• Is printing a work order a quick and easy function? (Many make it a journey to print this one very important document.)
• Does the system handle core charges, shipping, supplement levels and even additional work paid by the customer on the same repair order?

Do you want to see the status of a vehicle at any given time? Wouldn't it be great to have anyone in the organization just look at their computer screen and see the exact status of Mrs. Smith's vehicle? The more advanced production management features can help you in this area.

• How are departments created and are they customizable?
• Can you easily identify the status of a vehicle and how much there is to go for completion?
• Will the system track admin status (authorizations, holds, re-inspections)?
• How can problems be communicated? (Wrong parts, re-inspections needed, etc.)

Do you want to post payments to a job and track the accounts receivables in your system? If so then you have currently limited your selections greatly. Some of the available systems will offer this, while many won't. Consider the following questions for this area:

• How does the system (if it does) post into accounting?
• Do they reflect properly in the final billings?
• Can you handle deposits made by customers?
• Can you open a repair order to post towing charges before an estimate is written?
• Does the system have integrated or interfaced accounting and what systems do they support?
• Does the system provide the ability to review account receivables by estimator for follow-up and collection?

Do you want to flag (pay) employees for work performed? When and how you must do it will be very important to your decision. Things to look for:

• How are things handled when closing a repair order?
• What happens with different pay types, how do you pay them?
• Can you split a job task between multiple technicians?
• Can you split the labor within a department between multiple technicians?
• What reports are available to ensure allocations have been done correctly?
• How do you correct a past (incorrect) allocations (back flagging)?
• Can clock hours be entered as a lump sum for a pay period rather than individual jobs?

There are some other very important features regarding how the estimate and supplements come over too:

• Do other parts, aftermarket parts, and other labor operations come over to you properly?
• Once they are there (and possibly in the wrong department) how easy is it to change them to the right department?
• When can supplements come over from the estimating system?
• Is it necessary for the estimate to be locked?
• Will the system handle the latest CIECA EMS Standard both ways?
• Can supplemental information from the estimating system come over and not add or delete repair order lines corrected in the management system?
• Will the system handle all estimating systems equally?
• How are manual estimates best entered into the system?
• How are betterment, markups, paint thresholds and discounts handled?
• Can Customer Pay items be included and filtered when wanted on one repair order?
• Can one repair order be used for multiple insurer payers?
• What ability is there to add lines to the repair order? To delete lines? To correct mistakes?
• Ability to determine how many vehicles were repaired and estimated?
• Ability to filter parts orders not to include sublets, hazardous waste and cover car covers.
• Will the system print a final bill or payment receipt?
• Can profiles be set up to modify the imported estimate globally (change rates, etc.)

The above questions may seem very basic, but may very well eliminate many systems currently being sold today. Making sure to find these things out "up front" will certainly allow you to make a better business decision when purchasing.

Accounting – the next area to consider

I was once asked by a friend, "Why would a specific $20,000 management system use a (cheap) $299 accounting package?" I had to explain that our industry has a management system market of approximately 10,000. The accounting package works for all businesses so their market could be millions. What would you like to do? Sell to 10,000 at $20,000 or 10 million at $299?

At first, integrated accounting looks good, but generally these systems are limited in functionality and customization. Many use restrictive chart of accounts rules and do not follow general accounting principles (GAP) completely. On the other hand the current third-party accounting programs may or may not be GAP-certified, but generally provide much more flexibility as long as the management system is designed properly to send the data to it.

Generally an accounting "bridge" is required to interface to these accounting packages. Some have made it very seamless, while others require multiple processes to complete the transfers. The system you select may only provide a few options. This is very important for you to understand because the sophistication of your accounting staff may require lots of training too.

Implementation, training and technical support

Implementing management systems can be challenging. Any prospective vendor should outline the steps for implementation. You cannot just buy and load the management system software out of the box and expect it to be used. Make sure to ask these questions, before you purchase any system.

As mentioned earlier, we often suggest Windows-based training before anyone goes to or receives any system training class. This applies to estimating as well as management systems. The reason this is so important is that the success of any implementation is based on the comfort of the users to actually use the system. If you ignore this important area many systems get purchased and never implemented or used.

These are a few items everyone needs to know how to do well:

• Copy, cut and paste with and without a mouse.
• Move between fields with [tab] and arrow keys (without the mouse).
• Use underscored letters on buttons (not the mouse).
• Maximize, minimize and close programs at least four different ways.
• Use proper grammar when typing. Drop the all caps letters — it now means you are yelling.
• Understanding of other control and quick function keys.
• How to select printers, modems and fax drivers.
• How to check e-mail.

Once you understand Windows functionality, it is the same for all well-written Windows programs since good programmers comply with this standard. Also, while you and your staff are in Windows training, make sure to sign up for the typing (now called keyboarding) class too.

Next, you will either need to go to a class, have a consultant/trainer come in, or work through a computer-based training (CBT) program. The CBT is a great tool to introduce basics of any program. Use them and make sure everyone does. However, at some point you will need some type of classroom training. This can be someone coming into your business physically or through the Internet, or you and a staffer can go off site. There is great merit to do it in your own work environment, but many can't deal with daily operations and training concurrently.

Having provided both options many times, I find the best method is multiple training sessions on-site or through the Internet using the real data they have to work with at that time. The first session is to show the users step by step how to perform their own functions using the system. Generally the users have few questions since they haven't used it long enough and the training is very "guided." The initial sessions cannot be longer than two hours since at some point "information overload" occurs. Does the company you are considering purchasing the system from provide this type of training?

Now it's time to discuss your accounting system again. The manufacturers of management systems are generally not experts in the accounting system you are interfacing with. Unfortunately the manufacturers of the accounting packages are not experts in collision repair and how the information migrates into the accounting system from your new system. This places you right in the middle. I have worked with many clients to successfully bridge this gap and you should consider this when purchasing a system.

I could almost bet that if the body shop industry was credited the hours spent waiting on technical support to answer (or call back), talking to Level 1, then Level 2, then two or three Level 3 technicians at just an average door rate of $35 per hour, we could possibly retire. When you consider management systems you also will need to consider the support you will receive. Most systems have some sort of support fee built into the pricing. Most often they are a monthly or yearly fee that you should consider in the pricing. With the technology of the Internet, much support can be provided seamlessly through remote control sessions. This can be a very keen benefit for you and your staff for training as well. So ask about this.

Where to go? I'm so confused

I have had many clients ask me, "What do I do?" This is not an easy question to answer once they have purchased the wrong server, the cheapest workstations, installed the wrong wiring, used the worst connections and routing setups, and perhaps purchased a poorly designed and supported management system. And if there is no one on staff that has had any formalized accounting training let alone used the new software you may as well consider starting over from scratch.

There are many options available today to automate your business and make it possible for you to receive great benefits for using the features of a management system. You first need to sit down and identify what you want to do. This may take assistance of a consultant because you may not know what is possible, likely or impossible today. You also may not know what is in development and how it will affect your business in the near future. You may need someone you trust and can ask the right questions — this is an important decision to get right.

By the way, just because someone else is doing it or using it, don't assume they knew more than you do; they probably don't. There are many options today that will begin to bring order into your organization. It will allow you to monitor your business — electronically and on paper. It will automate operations while adding administrative duties you didn't do or know about before. It will allow you to use systems and hold people accountable and many will not like that. One thing is for sure — it won't be easy or immediate. Plan for a six-month learning curve. The result will be for developing a habit of doing business the same way every time. This is good for you, your company and the industry.

It will take your patience and willingness to get help, but it will pay off in the future.