In what is likely the first of its kind roll out, Nissan North America (NA) is about to embark on an ambitious plan to upgrade its external communication channels using Web services.
Scheduled to go live in the first quarter of 2004, the new network will enable Nissan NA to take its first steps towards real-time communication between its dealers, customers, vendors and the manufacturing floor, said Steve Silver, Nissan NA’s director of eBusiness.
“The Holy Grail in the auto business is the ability to bring what happens at retail, and all the data that comes out of those interactions, to share that information with the manufacturer,” said Silver. “In some cases we’re already sharing information but we’re not doing it very well.”
The program is to start small since most dealerships have management systems (DMS) ill equipped to handle Web services, said Larry Berger, Nissan NA’s manager of Information Systems.
Initially, only 15 of 1,100 North American dealers will go live with a Web services connection. The remainder will still use dial-up but current HTTP protocols will be replaced with S-HTTP, a minor but more secure upgrade, he said.
To get the remaining dealerships live with Web services, Nissan is working with its four main DMS suppliers, ADP, Reynolds & Reynolds, UCS and Procede, to upgrade dealers with DMS platforms supporting Web services. Nissan’s corporate platform is already .NET based so no upgrading will be necessary.
Today the company relies on antiquated, one-way (dealership-to-Nissan corporate) communications, said Berger, and any improvement to that system will be a welcome change.
“The reason we want to do this is it provides me with the opportunity to have two-way communications any time, any place,” said Berger. “Because a lot of the initiatives and growth in our business are going to require the ability for us to ask the dealer a question programmatically, like ‘How much inventory do you have of part X, Y, or Z?’ Today, I can’t do that.”
That’s the view from the IT side. The business case revolves around providing a more interactive customer experience that brings a higher degree of before- and after-sale value to the company-customer relationship, said Silver.
“If you look at the Nissan business plan for this appropriation what we’re trying to do is maximize our ability to deliver value to our consumers through our dealers as quickly as possible,” he said.
We’ve got tons of inefficiency in the kinds of communication and activities and interactions that we have with our customers because our data is all over the place. Our systems don’t talk to each other, some are real-time, some are not, some talk faster than others and just being able to have a much more consistent and coherent, closer to real-time data stream that triggers all these off-line events (like scheduling service) as well as on-line events (like parts and accessories sales) gives us a much greater opportunity to engage in efficient and effective communication with our customers and dealers.”
To make this happen is not very technology intensive, said Berger. All a dealership needs is upgraded DMS software, a Web browser on a PC and a good internet connection. Nissan NA is working with Microsoft’s consulting arm to ensure everything goes smoothly.
As well as streamlining communications and data collection, once in place, Nissan’s plan is to add more interactive services to its Web site. With real-time inventory levels at local dealerships available, for example, customers could, if Nissan NA decides to implement such a service, search for parts online and simultaneously find the nearest dealer with the part or the customer could order it online, pay by credit card and have it drop-shipped from the dealer. Today this isn’t possible.
“Our goal and job is to provide the infrastructure that will allow these types of projects to move forward,” said Berger. “This is something we have not been able to provide at this time.”
On the back end, switching to Web services will allow Nissan corporate to better track information and enable it to push out information and updates to its dealers via the Web. Again, this is not possible today, said Berger.
So, why Web services?
About a year ago when they were pondering the new network Web services was just coming into vogue, said Berger. Initially, his team intended to use an FTP (file transfer protocol) network but by the time they were putting ideas to paper and formulizing plans Web services were already working in-house. Seeing a perfect fit, since they were already running .NET, Berger and his team decided on Web services.
“The tightness of the integration (with) Web services means you can put that in a lot of different things and you’re still talking in a standardized format,” he said. “It doesn’t really matter what the back end is. So, I can talk to ADP, Reynolds, UCS with the exact same code on my side and I only have to develop it once.”
Cost was minimal and they already had Microsoft on board helping with the in-house work so it was just a logical choice, he said. As far as ROI goes, any system improvements would yield it since their current network is so antiquated, said Silver.
“It’s an old, costly legacy network where the expertise in supporting it is waning,” he said. “Dial-up as a protocol just isn’t really adequate to operate in the real-time environment that our business is now having to operate in and our customers expect.”
Berger’s only real concern was security. To ensure the network wouldn’t be comprised they decided to standardize on the emerging WS Security standard currently under review by OASIS (Organization for the Advancement of Structured Information Standards). SSL (secure sockets layer) guard the point-to-point connections between Nissan’s computers and the dealerships and all information is encrypted just to be sure, he said.
Whether by Web services or some other means, the bottom line is Nissan had to do something to improve communications. Toyota has upgraded its dealer network (although not with Web services), said Silver, and is reaping the benefits. And, in the highly competitive auto industry, any edge is an edge worth pursuing.
“This business is a hard enough one to do business in assuming perfect information,” he said. “So, anything we can do to streamline that process, reduce our costs in that area and make data more available to add more value to business activities is the right thing to do.”