Technology Newsmaker Q&A: Tom Aliotti

Jan. 1, 2020
Tom Aliotti is general manager of Activant Solutions' automotive business.

Tom Aliotti has worked in the technology space for more than two decades. The vice president and general manager of Activant Solutions' automotive business, Aliotti formerly worked as COO at Xporta, a supply chain technology company, and held management positions at Cambridge Technology Partners, Control Data Corp., and Oracle.

What's the No. 1 technology challenge you encounter in the aftermarket?

There's a significant lack of awareness among mid-size and smaller distributors of the competitive value of modern systems technologies. Large distributors and groups clearly get it — they understand that solutions that make their businesses more efficient ultimately lead to a significantly better customer experience. They've got more competitive horsepower at the parts counter, they're faster and more accurate, their returns rates are down, and they're cutting operating expenses while competing more effectively against OE dealerships.

At the other end of the spectrum, we have literally thousands of parts businesses that are focused on traditional processes and which are still using 15- or 20-year-old computer systems. Many of these business owners not only lack Web access, but they have no experience operating in a Microsoft Windows-based environment. Needless to say, they're missing out on all of the competitive benefits being utilized by larger distributors and dealership parts departments.

What's most frustrating about this is that if we simply applied today's commonly accepted customer service standards to the replacement parts business, we would realize that we need to make significant improvements. How many of us would consider doing business with a bank that doesn't have online services? Would we be satisfied with a bank representative who says he'll have to call back in 30 minutes to provide our account balance? Well, why should we expect our customers — especially the owners of repair shops — to settle for poor service due to outdated computer systems?

As business owners we replace our trucks every four to five years, and at home we buy new computers, game consoles and cell phones every two to three years. Yet, when it comes to applying modern software solutions and other technologies within the aftermarket, we become fixated on the capital expense rather than the true, tangible competitive benefits. That's not the right approach to take concerning a strategic investment that could transform your bottom line.

The aftermarket is often accused of underspending on IT. Do you think this is true, and what kind or ramifications will this sort of behavior have?

The aftermarket is absolutely under-invested in IT. And it's not difficult to identify the ramifications — just look at what vehicle manufacturers and car dealerships are doing to forge cradle-to-grave business relationships with consumers. Then compare these initiatives against the typical customer experience encountered in many service dealer and parts store locations. Our competition is implementing telematics and advanced customer relationship management capabilities while thousands of aftermarket businesses are still on 1980s-era green screen computers. It's night and day.

How widespread is the problem?

There's no question that many top-tier aftermarket distributors have embraced technology as an opportunity to reduce costs and increase sales, profitability and customer loyalty. In fact, they are indeed reaping these benefits on a daily basis. We try to communicate these successes to convince their peers that technology doesn't have to be a crap-shoot — by making smart decisions, including choosing the right provider, that "expensive" new computer system can pay for itself in a matter of months.

Beyond the leading-edge distributors, there's a second tier of business owners who are just now opening their eyes to the benefits of modern technologies; in many cases, they've been spurred on by an erosion of market share or profitability and realize they've got to do something to reverse that decline.

And then, unfortunately, there's a third tier of business owners who are simply unwilling to invest in new systems, either because they're not comfortable with technology or they just plan to milk their current systems as long as they're still operational. The obvious outcome is that they will continue to lose customers until it no longer makes sense to open the doors.

Do you feel the current data and technology standards are appropriate and effective, and what do you think it will take to achieve widespread adherence to these standards?

AAIA and MEMA have done an outstanding job in creating and implementing data standards, and their work will pay important dividends for many years to come. We're seeing strong gains in ACES compliance among manufacturers on almost a monthly basis. As with any new standard, however, organizations with a commitment to long-term growth will be the first to achieve compliance, while others will follow — many at a significant distance. We're willing and able to work with any manufacturer, regardless of size or product category, to simplify the process of mapping data to the ACES and PIES standards.

Do your customers understand the distinct difference between product attribute data (PIES) and application catalog data (ACES, etc.)? Should there be more focus on product attribute data?

A vast majority of the manufacturers we work with understand the purpose and value of the ACES and PIES standards. And I think virtually all distributors and jobbers appreciate the value of these standards. In a broader sense, it's absolutely vital that we eliminate any gaps in product information that exist between the organizations that manufacture parts and the professionals who sell them. This encompasses more than just standardized data — it also requires dramatically improved electronic catalog and point-of-sale technologies for use by the parts counterperson. That's why we have aggressively invested in eCatalog technologies like VIN lookup, OE carry-forward, and the Cover-to-Cover module, as well as advanced, user-friendly computer platforms like the Activant Eagle for the Aftermarket solution and the Activant Prism system.

Because of a lack of full implementation of product attribute data standards, the aftermarket is not necessarily an appealing market to software providers. Should there be more software providers in the industry, and if so, how does the industry attract this talent?

I'm not sure I agree with your assumption that standards-related challenges are to blame for the aftermarket's lack of appeal to technology providers. This industry is virtually without peer in terms of operational complexity. Every organization within the aftermarket value chain — manufacturer, distributor, jobber, parts retailer, and service provider — has a unique set of capabilities and challenges. Each has custom processes that help create competitive differentiation. As a result, you simply cannot address these needs through off-the-shelf software. This can be a very daunting challenge for a technology firm that is seeking maximum economies of scale and maximum profitability.

To successfully serve aftermarket customers, a software provider needs to be deeply rooted in the industry; your engineers must understand the intricacies of every type of parts transaction. And your products need to address the thousands of variables impacting the user's business. This requires a significant, long-term investment that many software firms simply can't justify given the comparatively slim margins the market will bear.

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