Gary Ormond

WHAT do you do in your automotive enterprise when today’s Big Data turns into tomorrow’s Obese Data?

According to KPMG, you pull all the data together and deliver it from an online portal that is, in effect, “a single source of truth”.

Then you interrogate that source of truth, at any level, for immediate relevant analysis that enables fast decision making and execution.

A single source of truth amalgamated from myriad data sets of both current and historical information has been an ambition of KPMG’s Motor Industry Services (MIS) practice for some time and now KPMG MIS is ready to unveil its Automotive Intelligence Portal as what can be argued is the most sophisticated auto management tool ever released in Australia.

Not before time.

According to the pundits, by 2020, 1.7 megabytes of data will be created on-the-fly for every person on the planet every second. The planet generated more data in the last two years than in all the years prior to that.

And, according to KPMG, there is no reason why the rules driving that explosion of data worldwide are not going to apply to OEMs and car dealers.

KPMG Enterprise Motor Industry Services senior manager, Gary Ormond, told GoAutoNews Premium:

“Businesses have been popping up all over the place to provide some form of monitoring or performance measuring services to the industry.

“All these services have masses of data and management information to go with them.

“Everybody is throwing data at the dealerships of today, the OEMs with CSI, SSi, sales targets, parts targets, market share, PMA performance, competitor analysis….can there be any more?

“Apparently yes. We now have a need to integrate with the growth in the use of Google, YouTube, Facebook, Twitter and Snapchat. And there will be more to follow these. Yet we are only scratching the surface of the data available from these sources and the analytics and insights they provide,” he said.

Mr Ormond was talking in the lead-up to the launch of KPMG’s Automotive Intelligence Portal, a multi-million dollar investment in an integrated online service designed to pull together the myriad of data flowing into the industry and make sense out of what it is telling business owners.

“The explosion of data worldwide will apply to dealerships and, unless dealers and OEMs can get control of data, they will be swamped. If they are swamped in data they might actually be worse off than if they did not have the data in the first place,” he said.

“They could actually get to the point that there is so much data coming in from so many sources that they just don’t know what to do with it or, indeed, cannot make head nor tail of what it means for the wellbeing of their businesses.

“So that data loses its value because it has just become part of the noise.”

Mr Ormond said that in the past, the dealer management system was generally relied upon as the most accurate source of data available. The majority of DMS data was based on transactions and sourced from the accounting records and possibly remains today the base load source of information in the dealership.

“Then came the CRM systems,” he said. “If properly managed and accurately maintained they are indeed a valuable source of customer information and insight into sales performance and operations.

“But unfortunately they relied too heavily on people doing the right thing. This led to incomplete and inaccurate systems that generally were not very well maintained and some might say are a waste of time and not a very successful data source,” he said.

“The receptionist as a showroom monitor who logged ‘man in a green shirt looking at the red car’ was introduced to be a kind of third-party source. But this was still relying on people doing the right thing.”

Mr Ormond said that in essence, the processes within the dealership were largely the same as they were 10-15 years ago, “the difference now being that the reliability and accuracy of the data or information being collected in respect of these processes has improved considerably”.

“But our use of this data remains haphazard. Methods and processes for data collection differ across dealerships, there are inconsistencies in what is collected and how to look at it. Not to mention the formats and content.”

Mr Ormond said that a number of manual processes and data collection points are now automated.

“Fifteen years ago we had manual door counting processes in dealerships – if anything at all – in a number of sites. Now there is technology from a company like Blix that can tell where your traffic in the showroom originated, how long it stuck around and where it went. Plus how much of that traffic was unique.

“We believe that with this increase in the types and volumes of data applicable to retail automotive dealers, the industry is rapidly entering the world of big data.

“Standardisation will be the key,” Mr Ormond said, “because no-one really has the resources individually to be able to conduct any meaningful analysis of the data to make the correct decisions in today’s environment. So people are going to need help to understand what it is telling them.

“I believe that not even the OEMs have the resources locally to make sense of big data – maybe on a global scale they might be working at it – but you have to wonder whether it will ever trickle down into dealer land.

“The only way that dealers can get any real sense of the data explosion is to have some sort of body that is going to collectively put their arms around the whole lot of them and leverage off that collective investment in order to make sense of this data for them.”

Mr Ormond said that even if a Ford or a Toyota or a Mazda does achieve this trickle down into the dealership, it still creates a new piece of data in isolation within a dealership that might have any number of other brands to contend with, which have not made as much progress with processing data.

“So, as a tool for the dealer, it is still in isolation and only relates to one part of the business because the other brands are not really focused on what happens with the other brands within the business.

“The progress being made (by OEMs) is patchy with some serious world players still running their data analysis on spreadsheets.”

Referring to social media analysis, he said: “People have not even started on gathering information about what is being said about them. As an industry we are pretty much nowhere in terms of social media.”

Referring to the ability for clients using the portal to drill down into the constantly-updating data sets, Mr Ormond said: “Dealers do not have time to look at numbers on screens all day unless the numbers are presented in a way they have instant meaning for them.

“It has to flag, across integrated data flows, that this trend is good, that this trend is okay or this trend could be a problem. Even if it is just a red box around a number it alerts management that the number demands attention.”

Mr Ormond said that stage one of the service, to be launched in August, will be to provide the data from a variety of data service partners. Stage two will be making sense of it all by having a team at KPMG analysing the data and providing trend reports to customers.

Click here for: What is big data and how does it apply to our industry?

By John Mellor