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To Host, or Not to Host…that is the Question?

4 Jan, 2011 By: Greg VanDeWalker, GreatAmerica Leasing Corp imageSource

To Host, or Not to Host…that is the Question?

Should a dealership host its own remote monitoring tool or use a third party? Consider that Shakespeare arguably penned the most famous line in all of Western literature when Hamlet, during a soliloquy pondered, “To be, or not to be - that is the question.”   

When talking about remote monitoring, fortunately life and death are not hanging in the balance. However, when a dealer recently asked me about the topic, I realized that he was grappling with the many different data points to consider. The question of on-premise versus a hosted solution is getting more and more focus these days, and that is the question of this article… to host, or not to host?

Software as a service, or SaaS, is a solution delivery model that has actually been around for awhile but recently has been growing at an exponential rate. Companies and products like salesforce.com, Google Docs or the likes of HotMail/Yahoo Mail/Gmail are making SaaS an every day reality. Businesses, big and small, are flocking to this more efficient and cost effective way to acquire technology and services.

Dealers today need to determine if remote monitoring of output devices is something they should host on premise or use a third party. We will look at the following topics to help show the pros and cons of each model:

1) Security
2) Support
3) Functionality
4) Dollar and cents

Security should always be a top priority whenever you are discussing technology. Each dealer must determine both the internal and external controls that its dealership has with its IT infrastructure.

Required security items include, but are not limited to, the following:

• Controlled access to data
• System and storage redundancy
• Consistent data backup
• Disaster recovery

To run an effective MPS program, it is critical for a dealer to have access to their customers’ devices. The ability to collect meter reads, proactively monitor for services and check toner levels requires 100% up time of one’s remote monitoring tool. But not so obvious is the need for the historical data. Historical data allows a dealer to bring value to the customers in a few ways. First, the better a dealer can start to trend toner usage, the better the job one can do managing toner inventory while giving the customer just-in-time fulfillment. Second, the historical data helps during quarterly reviews. Each quarter is an opportunity to sell the customer on the value being delivered.

Imagine the impact one would experience if a system is breached and the customer’s data is compromised, or a system outage causes a dealer to lose historical data that the customer was expecting to review. A dealer’s credibility and the customer’s confidence in the dealership goes down. If one decides to go with a third party hosting solution, have that source provide the information listed here. Many times third party providers have a very sophisticated infrastructure supported by a small army of dedicated IT professionals. These professionals maintain the remote monitoring platform alongside the other mission critical systems for their organization.  Never ignore security!

Take a moment and think about a time when you have tried to contact technical support for a technology provider, only to get frustrated.  We all have had our negative support moments when drilling down into the labyrinth of voice mail trees trying to find a human to speak to then finally hit the key you think will give the answer you are looking for but instead get “…please go to www.blahblah.” A dealership needs to ask the question of “Who do I want my customers calling with important questions?”

There are three options available today:

            1) You             2) Hosted provider       3) Software manufacturer

A dealer will be able to offer the best support from a local perspective. Customers are accustomed to dealing with the current team. One must determine who at the dealership will field the calls relating to the remote monitoring software. The questions to be fielded tend to be technical in nature and typically have to do with loading the data collection agent (DCA). The person taking the calls must have knowledge of network configurations in order to get the DCA installed in a manner best suited to report information flow today and in the future.

If deciding to utilize a hosted provider or the original software manufacturer, it comes down to resources and reputation. What resources has the company invested to provide the support needed for both the dealership and customer? But more important than resources, what kind of customer experience does the company provide in their main business? Ask for references and more importantly, seek out current users for honest feedback on these key questions.  Support is critical because quick answers are needed to meet the demands of a fast paced MPS market.

Functionality is an important point, yet really only one question needs to be answered: Is direct control of the data a requirement?  Regardless, if a dealer hosts its own solution or uses a third party provider, a dealer will have the most up to date version as long as the software maintenance is current. The primary advantage to hosting the system will be the direct access to the data base to create unique reports. All hosted solutions have many standard reports available at one’s finger tips, but some dealers have a desire for more complicated and customized reports.

As long as a dealer has on staff, a database administrator (DBA) who can mine the data and convert it to useful information, hosting may be the best decision. With that said, many large dealers with DBA’s on staff have decided to use a third party hosted model due the limited time available of the database custodians on other mission critical projects.

The financial implications of the choice “to host, or not to host” can be vast. If one decides to host the solution, the initial investment could be substantial. The initial software, hardware, installation and training could easily exceed $60,000. The initial investment is the easy part. Now that the system is on premise, the system needs to be maintained. First, the DCA’s must be purchased. Once a DCA is paid for, the dealer has perpetual use. Second, an annual maintenance fee is due to get the most recent updates. Finally, and most costly, is the head count required to fully support the product internally and externally.

If choosing to go with a third party provider, the options are wide. In today’s market toner companies, parts companies, OEM’s and distributors all have options available to use their remote monitoring tool in exchange for buying products from those companies. Some companies offer a true SaaS model with no strings attached where a dealer simply pays a price per device. Without question, the least expensive and quickest way to get started is the hosted solution.

Trying to determine which model suits a dealership best is a big decision, to be sure. The only easy decision to make is that it needs to be made NOW! When looking at the landscape of companies providing MPS, it is a very crowded picture. Every channel that touches the office has an MPS offering. Time is of the essence for a dealer to get into MPS, and a remote monitoring tool is a critical first step. Regardless if one decides “to host or not to host,” decide on one solution. MPS is past the early adapter phase and dealers must have their programs moving forward. Those who do not may in fact be facing Hamlet’s question, “To be, or not to be.”

All hosted solutions have many standard reports available at one’s finger tips.

Greg VanDeWalker is Senior Vice President, Strategic Relationships, GreatAmerica Leasing Corporation. Visitwww.greatamerica.com for further information.

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