It’s that time of the year again when businesses and industry experts come together to restrategize for the new year.
2024 was a rollercoaster for the automotive industry. One of the issues they faced as an industry was the ransomware attack on CDK Global, a leading Dealership Management System (DMS) provider with over 15,000 users across North America. CDK provides these businesses with operational systems, which made their hack incident severely disrupt thousands of auto businesses.
The attack made it difficult to process new car deals, manage inventory, and perform essential functions, leading to significant financial losses estimated at nearly $1 billion. This has made auto dealers look for ways to improve their system security and consider integrating third-party applications that can seamlessly and confidently boost operational efficiency and, most importantly, security.
Let’s Review 4 Ways Dealerships Are Preparing for 2025
1. Enhancing Security Measures
CDK’s mass security bridge stressed the importance of a strong security system in auto dealerships. To safeguard their organizations against similar attacks, dealerships implement robust safety measures such as:
- Employee Training: Educating employees about cybersecurity basics can prevent costly mistakes. Employees who are well-trained can recognize and avoid common hacking methods like phishing and spoofing. In 2025, dealerships are set to take employee training to a higher level.
- Regular Software Updates: If you are conversant with software, you will know there are always updates to be installed occasionally. That is because bugs (loopholes) are inevitable in software. It is important to stay up-to-date with software updates to keep systems secure.
To ensure further security measures, dealerships are set to keep up with state-of-the-art technology and ensure essential system updates keep all software, including DMS, Customer Relationship Management (CRM) systems, and operating systems, up to date to reduce data vulnerability.
- Strong Passwords and Multi-Factor Authentication (MFA): Using hard-to-guess passwords and multi-factor authentication is one of the safest measures ever. With MFA, it will be almost impossible for unauthorized users to gain entry.
- Access Controls: A multi-layer security system can limit administrative access to core operational systems. With this type of security, access can be distributed according to job ranking, keeping security in check and limiting access to sensitive data.
2. Integrating Third-Party Systems for Operational Stability
The risk involved in using a single DMS has proven to be risky for dealerships. To prevent service disruption, opting for third-party software to diversify operational tools and ensure smooth operations is a necessity.
One third-party software solution that has proven to be efficient is Scan123. Scan123 is a cloud-based document management system that enables users to quickly save, organize, and access their files in seconds.
During the CDKGlobal outage, dealerships using Scan123 were able to retrieve their documents, even though sales processes were down due to the DMS outage. This experience has demonstrated the importance of having supplementary systems in place.
By integrating a system like Scan123, dealerships can access the following:
- Reliable Backup Systems: Having multiple systems allows dealerships to continue operations even if one system fails.
- Enhanced Flexibility: Third-party systems can offer specialized functionalities that may not be available in a basic DMS, allowing dealerships to tailor their operations to specific needs.
- Improved Data Management: With dedicated document management systems, dealerships can organize, store, and retrieve documents, making customer support uninterrupted and improving operational performance.
3. Developing Incident Response Plans
During the CDK attack, things wouldn’t have been so brutal if there was a response plan in place. A good response plan can provide early hack detection, identify threats, and offer data backup and restoration.
A good response plan also fosters clear communication among staff and, by extension, stakeholders, promoting compliance to avoid litigation.
Now, dealerships are fully aware of the importance of a comprehensive and well-defined response plan. Which will help reduce downtime, financial losses, and boost business goodwill.
4. Leveraging Digital Tools to Enhance the Car-Buying Experience
Sales and marketing are now beyond walk-in centers. Businesses, including dealerships, should be able to give customers a virtual reality experience by investing in tools and media platforms that support this technology.
Platforms like Matterport, ZeroLight, Unity and Unreal Engine, and Google VR Services support virtual reality tours. Some are equipped with technology that enables virtual test drives, providing a realistic driving experience.
Video media platforms, including ESPN, HULU, YouTube, and even Facebook, are great outlets to find auto customers.
In 2025, dealerships will leverage these technologies to build customer rapport and provide a seamless car-buying experience.
Conclusion
As the automotive industry gears up for 2025, dealerships are taking proactive measures to enhance operations and ensure resilience in an ever-evolving digital landscape. The CDK Global ransomware attack was a wake-up call, highlighting vulnerabilities that can disrupt the automobile industry. To counter future security challenges, dealerships are enhancing cybersecurity protocols, integrating third-party systems, and developing strategic response plans.
Additionally, embracing digital tools and virtual reality platforms is a sure way to redefine the car-buying experience, making it more interactive and customer-focused. The road ahead may be uncertain, but with these strategies, dealerships can confidently navigate the challenges of 2025 and beyond.