DETROIT — Starting in March, CDK Global Inc. will give its dealership customers the option to share data contained within their dealership management systems and other CDK software tools with technology vendors they choose, replacing the company’s existing program for third-party vendor integration.
CDK CEO Brian MacDonald announced the change Wednesday at a CDK-hosted auto industry conference here.
The company currently requires dealership technology vendors that provide third-party services, such as marketing or lead generation, to be certified by CDK in order to gain access to auto retailers’ data.
CDK has said the practice ensures the data is secure. But dealers have pushed back against restrictions and fees that some DMS providers, including CDK, have imposed to integrate tools from outside software providers.
Some experts have said that competition in the DMS market ultimately may force providers to drop vendor integration fees.
Dealers today “have effectively no choice but to work through our program,” MacDonald told Automotive News. “We’re modernizing our software and making investments, and we believe we can give the dealers the tools to do it themselves if they so desire.”
Through CDK’s Data — Your Way program, the DMS giant will provide dealerships with free license to use CDK’s technology to manage the data contained inside their systems and share it directly with third-party software vendors. CDK also will offer a managed services program for third-party data-sharing if desired.
“Who knows better than you what you need to run your dealership, whether from CDK or from another vendor?” MacDonald said at the CDK Connect event. “We’ve heard you, and we will put you in control of who you work with and how you work. We are investing in this paradigm shift to give you choice. Going forward, you can work directly with any solution provider you choose.”
The change will take effect in March to avoid disruption to dealers’ current business relationships with third-party software vendors and to develop additional security controls within the technology, Barb Edson, CDK’s chief marketing officer, told Automotive News.
“We’ve had feedback for years that dealers want to have choice,” Edson said. “We’ve gotten the feedback, and we want to give them what they’ve asked for.”
Matthew Gillrie, owner of the Gillrie Institute, which advises dealerships on DMS contract negotiations, said the concept “sounds great. The question is, will the door open wide enough” for dealerships to share data with large third-party vendors, or will vendors need CDK to manage the service because of the complexity?
“That’s a question I’ll be asking,” Gillrie said.