With the explosion of new information technologies, owners and managers of auto repair shops are likely to feel confused about what specific products and services they need to better operate their shops. At the same time, there is no doubt that emerging technologies have helped to create a multitude of new capabilities for shop owners.

These new technologies allow shop owners to reduce paperwork, produce faster estimates, and improve communication with insurance companies. Indeed, some new software solutions can even help track the shop's productivity efforts.

State of technology in the industry
Most large and even mid-sized repair shops in the United States have adopted the use of automated estimating systems by now. In many cases, a shop's ability to participate in a direct repair program (DRP) with a major insurer is dependent on its investment in a specific automated estimating system.

For the vast numbers of smaller repair shops, however, automated estimating systems have not yet been widely adopted. This is perhaps due to perceptions that emerging technology solutions are simply too expensive - or unnecessary - for smaller shops. This perception may have been true at one time, but no longer.

There are two major categories of new technology solutions with which repair shops should become familiar: estimating systems and business management systems. These automated software systems are very important and each are quite valuable, but they are distinct and separate systems.

Estimating systems are designed to automate the writing of vehicle damage estimates. These systems simplify the identification of parts and labor required for a specific vehicle repair job. They also eliminate the potential for errors to be made in the arithmetic required for calculating an estimate, since computers are obviously more reliable than human long-hand and ten-key devices. In addition, automated estimating systems can be terrific marketing tools for seeking new business from referral sources; which do you suppose they find more impressive, hand-written estimate sheets or computer-generated laser printouts?

Business management systems provide repair shops with the ability to understand the financial side of their overall business operations. For instance, these systems can inform shop owners of their revenues and profits for each vehicle repaired. They also provide a very convenient interface with the shop's accounting and bookkeeping functions. Overall, business management systems are valuable technology solutions for monitoring and tracking the productivity and efficiency of a repair shop of any size. What's the right system for me?

For most shops, there is a gradual evolution in purchasing new technologies and building information systems. Typically, the first step is to acquire an estimating system to automatically create formal auto repair estimates. A second component is often the acquisition of an imaging product that allows photographs to be electronically attached to estimates. In many cases, the third step is to purchase a software system capable of performing analyses of shop productivity and generating basic reports. The final step in the construction of an information system is to get a sophisticated business management system that can serve as a critical tool to increase efficiencies and improve profitability.

If your shop is in the beginning stages of automation, there are some basic questions you need to answer.

• What capabilities are needed to communicate with insurers?

  It's important that repair shops invest in a system that is compatible with as many of the major auto insurance companies as possible. Some insurance companies will only accept estimates from repair shops using specific automated estimating systems.

• Is an "options-specific" system needed to consider all necessary labor requirements involved in performing repairs?

  Some systems offer parts and labor estimates for repairs, but do not automatically include all of the work required to make the repair. You may want to select a system that does the work for you. Some systems only offer labor time guidelines with special footnotes for additional time requirements the adjuster must calculate by hand, while other truly automated systems will take vehicle-specific options into consideration when selecting parts and calculating replacement times.

• Is there a "scaled-down" product for the beginner?

  Some companies offer a "lite" product with the core features of their estimating system or business management system, but they take out some of the extra capabilities and reduce the entry-level price. If you're just taking the technology plunge, this may be a way for you to get your feet wet.

• Can I add additional applications to the initial core system purchase?

  This may not seem relevant now, but it will become more important as your shop grows and as evolving technology systems become fully integrated. For example, is there an imaging product that works in conjunction with the estimating system you're evaluating? These sophisticated imaging products can be used to "attach" photographs to electronic estimates, a feature being rapidly embraced by insurance carriers.

Whether your shop is just purchasing an estimating system, planning a systems upgrade or contemplating replacing your current system, it's important to consider a few strategic issues before implementing your technology overhaul.

Assess today's business needs, project your future business volume, and evaluate your anticipated insurer communications requirements. Those core considerations should help put you on the right path.

Mondo Jacobs is product manager for ADP Collision Repair Services, a strategic business unit of ADP Claims Solutions Group, a provider of technology solutions to the automotive repair industry, based in San Ramon, Calif. Guest Editorials do not necessarily reflect the opinion of AutoInc. or ASA.

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