The emergence of the Internet has fundamentally impacted every sector of American business, but it has been put to use in very different ways - depending on specific market conditions.

In the collision repair industry, the Internet has so far been little more than an additional marketing vehicle. Some body shops have Web sites that essentially let people know who they are, what they do, where they are located and how they can be contacted. The extent to which auto repair providers are found by customers on the Internet remains to be seen. Most shops have some sort of e-mail connection to assist them with the process of communicating with insurers, customers and other business partners.

As the Internet gains in popularity, our industry naturally has asked how the power of the Internet can improve shop operations and efficiency. One of these possible new uses involves the new concept of “online estimating” - or actually conducting repair estimates with a service on the Web, rather than with estimating software running on computers in the shop.

Before implementing Web-based estimating, shop owners can determine if Web-based estimating is right for their business by asking themselves the following questions:

• Is Internet access available and, if so, in what forms?
• Do I plan to use the Internet for other purposes and, if so, what?
• Who is going to make sure my Internet connection is installed and stays in good working order?
• If the Internet connection is not available, can I still get to my files?

This article will explore some of these issues, along with the advantages and disadvantages of online estimating. Equally important, it will provide suggestions about a future Internet business strategy for body shops.

Online Estimating

The very idea of conducting auto repair estimates on the Web was developed around the idea of reducing costs for body shops. The concept is that there is no need for lots of technology equipment or software installation requirements - all that is needed is a computer, a Web browser application and an Internet connection. The shop owner merely goes online, visits the service provider's Web site and enters all of the necessary information to process the estimate.

The repair estimate is calculated by the Web-based service, using the proprietary database that resides on the provider's own server, and then returned to the shop owner's computer. The user is charged a fee per estimate, rather than a flat monthly fee for the use of an estimating software system in the shop. This is the basic model of the application service provider (ASP).

Advantages and Disadvantages

Here are some primary factors that need to be weighed:

• Cost

  Web-based estimating has minimal up-front costs and the additional cost benefit of being able to operate on a “pay-as-you-go” basis. This allows some shop owners to avoid the cost exposure of a monthly estimating system contract during slow months of operation.

  However, some collision repairers could pay more for Web-based estimating than for the traditional subscription-based estimating products. Be sure to consider what an online estimating system will cost you per estimate, then calculate the number of estimates you write per week. In addition, be sure to find out if the system requires high-speed Internet connections to efficiently process online estimates, and if so, research what your Internet Service Provider (ISP) would charge.

• Ease of Use

  Another benefit of Web-based estimating is the very simple operation of the system. All the user needs to do is access the Internet and point his or her browser to the destination of the service provider. From that point, the user simply enters the data requested by the site and then waits for the service to send back the vehicle repair estimate.

  However, while the Internet is a reliable network overall, there is a risk that your employees could be shut out of using the system from time to time. By contrast, CD-based estimating systems are not susceptible to this kind of problem.

• Database and Security

  Another advantage to Web-based estimating is that there is no need for a shop owner to maintain an updated database in his or her facility. This means that it's unnecessary to rely upon the service provider for sending the CD updates and for shops to remember to install the new disc for regular updates.

  On the other hand, to conduct Web-based estimating, a shop must rely on the service provider to manage its data. The vendor captures the data, processes it and creates the repair estimate. If the Internet is not available, neither is the data. Moreover, it is still unclear precisely how secure the Internet connection is for purposes of data transmission. With the CD-based system, security issues diminish because all of those processes take place within the body shop.

  There are some other questions that shop owners should ask before moving to Web-based estimating. If locating aftermarket or recycled parts is important to a shop, be sure to inquire as to whether that function can be done on the Web.

  Also, consider whether the Web-based system has the ability to export files to the leading body shop management systems, or if employees will need to manually re-enter the estimate data into your management system.

Future Internet Business Strategy

Collision repair facilities vary from region to region, but all of them have one thing in common: an objective to correctly fix more cars in an efficient manner. The Internet can help improve efficiencies for body shops - and bring them closer to that goal - but it requires a careful business plan.

As we embark on a new year, body shops should use the Internet to improve their communication with customers, insurers and vendors. They should explore strategies for maximizing employee productivity by considering ways to provide repair updates without countless telephone calls throughout the day. They should also use the Internet to enhance their image and increase their visibility to the consumers in their marketplace. And with the wide range of products available today, it could also be time to consider the pros and cons of Web-based estimating.

The bottom line is that the Internet has the potential to dramatically impact shop operations, but the shop owner needs to be thoughtful about its most appropriate uses for his or her business.

Jamie Nolan is senior director of product management and marketing for ADP Collision Repair Services (http://www.csg.adp.com), a San Ramon, Calif.-based provider of information services for the collision repair industry.

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