Software outage leaves dealers ‘years’ behind schedule as they can’t drive cars – and it’s bad news for prices

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CYBERATTACKS leave dealership customers high and dry as software blackout makes it impossible to apply key incentives and discounts.

Forced to process everything by hand, customers face delays in other aspects, too.

Nearly 15,000 American dealerships were affected by a software blackout as of June 19

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Nearly 15,000 American dealerships were affected by a software blackout as of June 19Credit: Getty
Sales personnel used the software to track inventory, order new vehicles, and process payments

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Sales personnel used the software to track inventory, order new vehicles, and process paymentsCredit: Getty
The service department used it to schedule service appointments, write repair orders, and order parts

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The service department used it to schedule service appointments, write repair orders, and order partsCredit: Getty Images – Getty

CDK Global, an open-source software development platform, faced back-to-back cyber attacks last week, causing a “blackout” that left many car dealerships scrambling for alternatives as of June 19.

The software carried several departments on its shoulders, and it streamlined buying a vehicle or servicing customer vehicles.

Salesmen used the software to track inventory, process customer payments, and order vehicles from the manufacturer.

It also helped customers save by being able to apply discounts and incentives.

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“It reduces their ability to get a deal,” Ryan Callahan, a general sales manager at a Mazda dealership in Massachusetts, told CNN Business.

“It limits the customer’s leverage.”

Without the software, salesmen and financial workers have resorted to tracking and processing sales and orders by hand, costing all departments precious time.

“The financial impact it will directly have on us will take months to correct if not years,” said Callahan.

If not buying a car, taking a car to a dealership’s service center is now delayed, too.

Technicians used the software to write repair orders, order parts, schedule service appointments, and track parts inventory reported CBS.

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Almost 15,000 dealerships have been affected by the blackout.

Some dealerships are using spreadsheets to bridge the gap, but it won’t work forever.

“If you’re a major car dealership repair shop, you’re doing many fixes per day,” said Jessica Caldwell, head of insights at Edmunds.

“If you’re having to record inventory in parts by hand, that’s going to take away time you’re spending serving customers.”

Others have resorted to a more analog approach to pen and paper.

Nicolas, a parts department employee for a Porsche dealership in Los Angeles, California, told CNN that he uses “a mix of pen and paper, Excel sheets, and extra care for each invoice” when writing parts orders.

The financial impact it will directly have on us will take months to correct if not years.

Ryan Callahan, general manager of a Mazda dealership

As a result, customers are forced to wait nearly double the normal amount of time to have their vehicles serviced.

“We don’t have a clear view of stock and have to do regular inventory on our most used parts,” he said.

Robbie Jacob, a Kia owner in San Diego, California, took his car to the dealership to have his air conditioning fixed, but was turned away after being told the shutdown made them unable to schedule an appointment.

Another hurdle buyers face is registering a new vehicle – a service that was done through CDK at many dealerships.

Now they’re told to make an in-person appointment at the DMV.

Don Aycock, for instance, drove 90 miles to buy a new Buick in Florida a day after CDK Global shutdown.

How do dealerships use CDK?

Several dealership departments use CDK to streamline various processes.

Here are some of the ways dealerships utilize the open-source software development program, CDK Global.

SALES:

  1. Process customer payments, particularly when financing or performing a wire transfer. Cash or check payments are easily processed without CDK Global.
  2. Track available inventory. Salesmen could accurately track what vehicles have been sold by other salesmen and which cars would arrive soon.
  3. Order vehicles from the manufacturer. It was easy for salesmen to configure a car to customer specifications through the program and have it ordered.
  4. Apply discounts and incentives. Without the program, the price cannot be altered.

SERVICE:

  1. Write repair orders. The program allowed technicians to fill out an online repair order with suggestions to the service writer for repair, what was fixed, which parts were replaced, and which may need replacing in the future.
  2. Order necessary parts for the repair. Parts could be ordered online making ordering the correct parts more secure.
  3. Schedule service appointments.

PARTS:

  1. Track inventory of new and used parts.
  2. Order necessary parts quickly and accurately from the manufacturer.

He was able to purchase the car, but he had to make a special trip to sign the title, which he wouldn’t have had to do if CDK were functioning.

“We got a call from them today that we can come next Thursday to sign the paperwork for the title and get a permanent license plate,” he said, noting he would have to make another lengthy drive.

The company expects to be fully functioning by June 30 – but not a day before – meaning 11 days of working in the dark.

“We do feel it’s important to share that we do not believe we will able to get all dealers live prior to June 30,” the company wrote in a memo sent to dealerships.

Until then, the company said, dealerships will have to continue trudging through the blackout with analog approaches.

“Should you need to make alternate plans for your month-end financial close process, you should do so to help keep your dealership working until the applications are recovered.”

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