I know from my time as a Controller that digital contracting sounds like a no brainer for the dealership. The benefits are there: less paperwork, less storage costs, faster funding, and delivering that “friction-less” experience we’re all hearing so much about. It’s no wonder digital contracting is the new popular kid on the block.

I believe digital contracting and the paperless dealership are the future, but rapid growth will take time. Dealers and solution providers are still trying to get comfortable with how to integrate solutions, keep costs down, and manage the process. A smooth, paperless experience is hardly widespread or the norm yet for dealers.

As a recent Ward’s Auto article put it, digital contracting is already here. But it’s a fractured process and dealers are setting themselves up for failure if they expect plug-and-play solutions.

The digital contracting landscape right now is like a game winning strategy without a playbook. Sure, it sounds great in theory. But how do you put it into practice?  The dream of an entirely digital solution takes more work than expected and implementation can be messy. If your dealership is considering signing on to an digital contracting solution, review these factors first:

The process. The promise seems to be that digital contracting technology will give you a consistent process for every deal. That’s rarely true. There is efficient digital contracting for parts of the process, but when you get to additional paperwork like manufacturer incentives, warranty documents and DMV or regulatory documents, the process is still manual. States also vary on which documents they will accept with an electronic signature.

Your bandwidth. Do you have the people and the technology to implement digital contracting? You may have to make a large investment to upgrade your systems.  A large auto group has plenty of money and people to throw at the problem; a five-store group may not. This reminds me of an article I read about Elon Musk needing 200 people for a project. His company hired the people in two days, but it took 50 people to hire them and another 50 to on-board them. My point is that the behind-the-scenes work and employee time are hurdles dealers still must clear.

Bumps along the road.  As interest has spiked, more large dealer groups are giving digital contracting a try. But it’s not a smooth road. Proctor Automotive in Tallahassee, Florida, brought on a digital signature solution that, in theory, collected a digital signature once and then applied it to all the necessary documents. It took 18 months for the signature product to work as expected.

Your customers. Not every customer will be comfortable signing digital documents. A true friction-less experience means meeting customers where they are in their personal buying journey. Asking customers to purchase only one way is a great way to create friction. Don’t ignore what your individual customers want. Serra Automotive, for example, uses its digital finance solution to create forms, but very rarely do customers choose to use the iPad to sign contracts. Instead, paper deal jackets are scanned and saved to the cloud via a third-party document management platform.

In a recent article on modern retailing, author David O’Brien hit the nail on the head when he wrote that no matter what technology you use or how you describe it, dealerships are still built on people dealing with other people. Meet the needs of individual customers and monthly profits will increase.

Digital contracting can be another tool to meet those needs, but there are still hurdles to clear. Consider all the factors before you buy into a game winning strategy that may not yet offer the playbook you need to succeed.