Posted on November 21, 2024 by Joey Green

by Joseph Green, VP of Operations, One View

 

The ransomware attacks on CDK Global and resulting data outages crippled over 15,000 dealerships and cost them nearly a billion dollars in lost revenue and operational downtime. This was a wake-up call for dealerships about the critical need for strong data redundancy strategies.

Storing duplicate data across different systems or vendors mitigates the risk of losing critical information during a system failure and enables dealerships to recover more quickly to minimize costly downtime.

Minimizing the damage from a cyber attack also helps protect employees from the debilitating effects of lost income. It’s no exaggeration to state that employees’ livelihoods depend on the employer’s ability to navigate cyber attacks and technical failures. This is especially true of commissioned employees who depend on vehicle, F&I and service sales to make ends meet.

Dealers who have protocols in place for business continuity and data recovery will better able to weather the next cyber attack. And unfortunately, we can expect to see more attacks of this magnitude. Experts agree that cyber crime is on the rise. This is coupled with the increase in devastating natural disasters like hurricanes, floods and forest fires that also have the potential to halt operations. Act now with the following three fundamental data redundancy strategies.

 

Operational Data Redundancy

When affected dealerships were cut off from the DMS the majority were left scrambling to understand current records spanning everything from deals in progress to parts inventory. This lack of operational visibility led many stores to grind to a halt.

Third-party Business Intelligence (BI) or Data Analytics products that pull data directly from the DMS provide real-time data analysis and historical look-back capabilities and serve as a backup in the case of a DMS failure. Having reports and snapshots of operations at the time a system goes down helps dealerships restore operations more quickly.

 

Historical/Archival Data Redundancy

The attack also put DMS document management under a spotlight. Many dealers rely solely on the DMS to archive dealership documents but this can be a costly mistake. Losing important information due to cyber attacks can trigger FTC fines and penalties if document retention laws are broken, leave dealerships vulnerable in the face of an OEM audit, and do long-lasting damage to a dealership’s reputation. In addition, DMS document management functionality only applies to what the system generates for the store. It will not capture additional critical items like payroll and human resources.

Redundant archiving within the DMS and with a third-party provider ensures that if key software fails or is knocked offline there’s always a backup. Third-party archiving will also capture critical items that the DMS can’t to ensure important information isn’t misplaced or lost.

 

Backup to Operational Processes

When CDK went offline dealers scrambled to find alternative methods to serve customers and accomplish primary tasks. News stories reported on dealership staff reverting to pen and paper to work deals, and of young or new employees who had no idea how to do their jobs without the DMS. At One-View, we heard from a lot of dealers who needed copies of invoices and forms for service, desking, F&I and contracts.

All dealers can learn from these stories and prepare now for future system failures. Dealerships should put together a comprehensive manual with instructions on how to to revert to secondary or tertiary processes if a system goes down. Include details about when you turn to redundant data backup, when and how to revert to manual processes, and store paper copies of your most widely-used forms.

Proactively adopting redundancy strategies will go a long way to safeguarding operations and employees from system failures. Yes, there is cost involved in storing duplicate data but it pales in comparison to the financial tsunami that a system failure can bring.

 

Learn more about the importance of data redundancy by downloading our free eBook: A Dealership’s Guide to Data Redundancy in Automotive Dealerships!