Under French's direction, Aftersoft Network has become a leading provider of business automation and eCommerce solutions for every level of the automotive aftermarket-including parts, tires and service-which serve as the building blocks for aftermarket businesses to create virtual supply chains. Aftersoft Network now serves over 450 customers with more than 3,000 locations across the U.S., including a number of iconic brands such as Goodyear, Michelin, Midas, Monro Muffler Brake, Parts Alliance and Parts Plus. Prior to his current position, French spent four years as vice president of services and support for CarParts Technologies, the predecessor of Aftersoft Network NA, where he integrated both the professional services and support departments under one standardized methodology to improve delivery times.
Before entering the automotive aftermarket industry, French served as chief operating officer and board member for EPC International, Inc., a software applications development company for the food and beverage manufacturing and distribution industry. He has also held positions with Deloitte & Touche LLP and Hughes Space and Communications. French earned a bachelor's degree in accounting from Loyola Marymount University in California.
What's the No. 1 technology setback you encounter in the aftermarket?
I think the biggest one concerns the standards around e-commerce. Many of the big companies are all driving their own kind of standards because they have started the standards process at a certain point in time. For example, NAPA designed its standards probably five or seven years ago, so their standards are different than CARQUEST.
Even the AAIA standards have evolved over time. The biggest stumbling block that I've seen is timing — it makes everything a little bit different. That doesn't even take into account what's going on with the tire side, because most parts guys are not paying attention to tire standards. Because all supply chains end up at service dealer, we tend to get bombarded with the largest number of standards. Our VAST management product is distributed to Midas, Goodyear and the Tuffys of the world. Companies like NAPA or CARQUEST or AutoZone who sell into that channel have started trying to push electronic ordering and their own electronic catalogs, and that's causing complications because of the fact that each one of them is using a slightly different version of the standards.
Because we control our own e-commerce system, our VAST product is only talking to our e-commerce solution with one standard. No matter what we do, our communication between VAST and e-commerce is always the same. It doesn't require us to put the burden on the VAST system to handle that.
What is going on with standardization in the tire market?
Not a whole lot. What you have over there, for example, are things like Goodyear's National Accounts program. It has its own way you communicate with it when you sell tires to a Goodyear national account. Bridgestone has its own version. All those companies have their own systems. Nobody is driving a standard for electronic ordering through what I call an application-to-application model: where the point-of-sale talks directly to the warehouse through an e-commerce solution.
At least on the parts side you've got a group of people asking, 'How do we do this?' With the tire companies, they're not even asking the question. Midas, for example, is having a big push to have their dealers selling tires. Tuffy is doing the same thing. So now that these guys are getting into both parts and tires, they need to be able to electronically order both of those. The service dealers who are doing a substantial amount of electronic ordering are kind of excluded from that with tires, so now you've got limitations.
But because we've got our own e-commerce solution, it allows them to make that single electronic order, whether it's for parts or tires look uniform and consistent. We're able to simplify that all into one item that removes that burden from the point-of-sale system.
The aftermarket is often accused of underspending on IT. What kind of ramifications will this sort of behavior have?
I don't think it's necessarily that they're underspending on IT. I think one of the problems I've seen is that they're spending their money in the wrong spot. If you look where IT money is going today, it's going to pay somebody for a catalog. Since content is king in the aftermarket, many people are putting a lot of money into paying for a catalog, or putting money into transaction fees to do electronic ordering.
The national content providers have controlled the content for a long time, but now the national parts distributors are starting to do their own content. That money that could be used for technology solutions is being gobbled up by either a catalog fee or transaction fee, limiting a company's ability to really spend on technology. People are not separating their technology decisions from their content decisions. They end up paying for a short term solution instead of something they can build on.
That's what I think is happening to the IT dollars. They are getting absorbed in these short-end short solutions that are tied around content, as opposed to a solution that can get them where they want to be in five years. That's creating an overall slowdown in technology investment, as I see it.
Do you feel that current standards are appropriate and effective, and what do you think it will take to achieve widespread adherence to these standards?
I think standards have had a benefit. It's driven people to think about these things. But because the automotive aftermarket is so huge, and there are so many different ways people are doing things, to get to the point where everybody is following a standard is really a 10- to 20-year project.
People are implementing various standards along the way so the standards are still evolving. Now you have people continually investing in altering their data to meet the standard, as opposed to just getting started. We follow more of a plug-in model, where you plug yourself into the network using whatever standard you've adopted, and then you can drive connected solutions around that. We do this through our OpenWebs product, which is our e-commerce piece. It's a universal switch. If you've got an Activant system, you can connect using that platform. Or you may have your own solution out there. We have different gateways that help you connect to it.
That type of relationship is really the more important piece. People are getting the benefits out of it, but it still allows the standards to evolve, so when somebody does get to a standard and it is agreed to the integration will be much simpler. But the bottom line is you don't need those standards to drive your connectivity.
Do your customers understand the distinct difference between product attribute data (PIES) and application catalog data (ACES, e-catalogs)? Should there be more focus on product attribute data?
We deal with people up and down the supply chain on both parts and tires, so it depends on whom you talk to. Smaller service dealers have no clue. All they care about is the ability to get their catalog data, and the ability to see what they're buying.
As you move up the chain, it really becomes more important to the providers of that data to understand the difference. Obviously, anyone that's a provider of that data definitely understands the value of it, but they have implemented it in their own way.
The AAIA standards around ACES are done one way. But companies have implemented the AAIA standards differently among themselves. You get variants of those standards.
The key there is the fact that the providers understand the differences, but the service dealers just want something simple that works consistently.
Because of a lack of full implementation of product attribute data standards, the aftermarket is not a necessarily appealing market to software providers. Should there be more software providers in the industry, and if so, how does the industry attract this talent?
The largest challenge in the aftermarket, and it's always been this way, is that whoever controls the content controls the aftermarket. With these standards, people are now able to create catalogs on their own, and are looking at how to get that down to the service dealers. So that has taken away that barrier of entry that's previously been there.
Over time you're going to see a lot more of the benefits of separating the technology and content decisions. I think that's the key to more technology companies coming to the aftermarket. You need that connectivity, from the service dealer software all the way up to the manufacturer and everywhere in between.
Once that supply chain is connected, it's going to bring other technology companies, including some with peripheral offerings like financial management or fleet management. You're going to see these different technologies that are able to work off of that supply chain, but the supply chain has to be built in a way that's not tied to content.
How have companies such as Wal-Mart, which are forcing many of these suppliers to adopt new data standards and engage in e commerce, impacted the aftermarket?
They are large enough to drive that relationship with the manufacturer. Where we will start seeing some of these changes is with service dealers trying to drive these initiatives across their franchisees.
Service dealers are the guys with the power because they ultimately control the customer. Over time, now that they're getting connected, they can pay attention to their own initiatives, and the larger companies will be able to guide suppliers in that direction.
What I think you're going to start seeing over the next few years are more of those relationships in that connected world, using standard communications that are not necessarily driven by content.
We're seeing that in our customers on both the service level and parts distributor level. They want to control the rules and they want to have that relationship directly, without going through a central hub or going through a tollbooth, so to speak.