The Good and Bad of Internet Estimating - BodyShop Business

The Good and Bad of Internet Estimating

The most recent trend in Internet application is online estimating or the execution of estimates through a Web service. Is this new trend right for your shop? Consider these pros and cons before signing up.

Whether you’re attending a collision repair conference or flipping through the latest industry magazine, it’s hard to miss the increasing number of advertisements glorifying the all-new, easy-to-use solutions that allow you to run your shop more efficiently on the Internet. This powerful new vehicle for communication is continuing to change our world – much of it for the better.

Like most businesses and industries today, collision repair shops of all sizes are using the Internet in a number of ways. Applications include everything from marketing to parts ordering to banking transactions online. Without a doubt, more and more operational tasks are becoming more efficient with this medium.

Because of this success, moving additional daily business operations to the Internet seems to be the next logical step. But where do you start to sort through all the possibilities? The most recent trend in Internet application is the move toward online estimating or the execution of repair estimates through a Web service. This option would be in lieu of stand-alone estimating software that runs on a shop’s computers.

But this isn’t a decision to be taken lightly. Before signing up for Web-based estimating, shop owners need to review a number of pros and cons to determine if Web-based estimating is a good fit for their business.

Pay As You Go
The first point to consider is cost. Call it a hunch, but you probably want more bang for your buck. The attraction of Web-based estimating is that it requires lower upfront costs than traditional subscription CD-based estimating and the shop owner is able to transact business on a pay-as-you-go basis. This allows shop owners to lower the cost of a standard monthly estimating system contract during slow months of operation.

At some point, however, this low, upfront pay-as-you-go cost could actually end up being more expensive to your shop if volume is high. Since new online estimating systems charge an average of $13.95 per estimate, shops that write more than four estimates per week, for example, will wind up paying more for Web-based services than they would’ve for a basic monthly estimating system. In addition, if your shop requires high-speed Internet connections to efficiently process the online estimates, those Internet service provider (ISP) fees can sometimes become quite expensive.

Ease of Use
The second point to consider is how well Web-based estimating fits into your shop’s overall operation. Truth is, Web-based estimating does provide a very simple operation. All you need to do is access the Internet and go to your service provider. From there, you simply enter the data requested by the site and wait for the service to send back the vehicle repair estimate.

But according to data studies on the Internet, it’s a somewhat unstable platform for commerce since it’s accessible only 99 percent of the time. This means that for every 100 times you log on, there will be one time when the service can’t connect to the application provider. And this doesn’t include the times when the application provider can’t service the Internet.

While this may sound highly reliable, the numbers indicate that your employees could be shut out of using the system for a total time of three full days a year or at numerous points during any operational workday. By contrast, CD-based estimating systems are accessible 24 hours a day, seven days a week.

In addition, the Web-based systems on the market today may lack the ability to export files in a format compatible with all of the leading body shop management systems. And if the estimate database is updated but your body shop management system isn’t, vehicle data could be lost during the import/export process. When this happens, employees will need to manually re-enter all the estimate data into the shop’s management system – and time spent doing this creates a potential loss in productivity.

Also, while most subscription estimating systems can export files in a format compatible with the leading body shop management systems, Web-based estimating systems have no export capability. This means the providers of Web-based systems will need to allow BSM systems access to their files to either import into or export out of their systems. To my knowledge, no file sharing protocols are published for any Web-based system. Once again, the need arises to manually re-enter all the estimate data into your shop’s management system. This is another loss in productivity that could further impact your bottom line.

Operational limitations are also a possible concern. Today’s Web-based estimating applications enable you to write a basic estimate, but that’s about it. If locating economy parts, such as aftermarket or salvage, is important to you or your DRP compliance standing, it’s important to know ahead of time that you won’t find these items on the Web.

Responsibility for Security
It’s difficult to read a newspaper today without seeing an article discussing the potential abuses of privacy on the Internet. The primary reason for this concern is the fact that the government has become more involved with and will likely continue regulating this medium. How does that affect Web-based estimating? It means information passed between shops, Internet application providers and insurers is open to potential violations of privacy unless properly secured.

If this is a concern, then using a current CD-based system would eliminate this risk but means your shop continues to be responsible for the monthly fee and updates to software and database. But in exchange for reduced operational responsibility by using the Web, your shop must trust its Internet service provider to securely pass its data to the application service provider and trust the application service provider for processing, storage and management. Then your shop must trust the application service provider to securely pass that information to the insurance company through an Internet service provider that may not be the same one your shop originally used to create the estimate. Any adjustments to the original estimate must follow a like procedure if they’re done electronically.

It’s at this point that Internet privacy issues start to impact shop owners, and there are a number of governmental efforts you should be aware of. For example, a new federal mandate enacted Jan. 1 affects all industries operating on the Internet and provides far-reaching restrictions on how private consumer data can be used. No legitimate information provider or Internet business will allow this data to travel through the Internet unsecured since the legal consequences can be very serious. This doesn’t mean third parties can’t access the data; it just means the data must be secure during communications between the shop, application service provider and any other authorized parties to the transaction, such as insurance companies.

At the same time, seemingly tied in with the industry’s move toward open and consistent standards is the idea that the Internet will be the catalyst to make these standards possible. However, these issues – consistency and privacy – are totally separate and distinct. The first issue relates to the well-publicized Collision Industry Electronic Commerce Association’s (CIECA) efforts to create a standardized output format for insurers and shops to use in streamlining the claims process.

The second issue – that of ensuring the secure transaction of private information on an estimate as it passes through the Internet – is a necessary step that everyone in the estimating business must participate in with the onset of Internet usage. This step protects shops as well as insurers.

Private information that’s secured can include shop customers’ social security and credit card numbers, as well as information about the shop. The concern is that without securing this data, this information can be retrieved and misused, with you being the unwitting victim.

The privacy issue is just as important when it relates to the shop owner’s information. Your facility’s daily transactions should be between your shop and its business partners – not unauthorized third parties, such as intermediary data collectors.

Internet-Based Profits
shop owners need to consider a number of factors when incorporating new uses of the Internet into their daily operations. The questions you should review internally, prior to meeting with an Internet application service provider, include:

1. What Internet-related functions do I plan to use?

2. Who’s going to make sure my Internet connection is installed and stays in proper working order?

3. If the Internet connection isn’t available, how can I access my files?

4. Who will be accessing the data, is security guaranteed and what restrictions, if any, do I want to place on using that information?

5. Is there other information included in the transaction that would require the approval of third parties prior to being able to use the Web-based system?

Like all business decisions affecting collision repairers today, you need to analize the pros and cons of Web-based estimating and other uses of the Internet to make the right decision for your shop.

Brian Michnowski is senior product manager for ADP Collision Repair Services, a San Ramon, Calif.-based provider of information services for the collision repair industry.

How Web-Based Estimating Works

The concept of Web-based estimating is based upon body shops reducing the cost and time associated with creating estimates. With Web-based estimating, there’s no need to buy lots of high-technology equipment or software installation requirements. All you really need is a computer, a Web browser application and an Internet connection. You go online, visit the service provider’s Web site and plug in all of the necessary information to process the estimate.

And presto! The repair estimate is calculated by the Web-based service using the information providers database that resides on the provider’s own server. After this, the estimate is returned to your computer. You’re charged a fee per estimate, rather than the flat monthly fee that pays for the use, updates and support of an estimating software system in the shop.

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