Episode 28: Chris Walsh, President of Reynolds and Reynolds

Tune in now for Episode 28: Jason Stein interviews Chris Walsh, President of Reynolds & Reynolds, to discuss the latest in cybersecurity and the aftermath of the recent industry-rattling moment. 
 
We also talk AI, productivity and dealers unlocking the ability to do more with less. Chris Walsh has been with Reynolds for more than 35 years, holding various leadership roles in business development, operations, quality control, sales, marketing, and support.

0:00 Intro 
4:14 Big Picture Lessons from the Cyber Attack
8:50 Opportunities in the aftermath 
13:38 Low-hanging fruit areas for AI 
17:53 Looking forward to the Reynolds and Reynolds Dealer Summit 

Check out The Presidio Group on Linked In - https://www.linkedin.com/company/the-presidio-group-llc/

And The Presidio Group's Website - https://thepresidiogroup.com

Transcript

Welcome into the eighth episode of season two of Full Throttle, the Presidio group's automotive industry podcast. I'm your host, Jason Stein, Director of Multimedia and Events at Presidio. On a regular basis, Full Throttle serves as the industry's meeting point for great conversations with leaders across the automotive world. 

What I'm seeing is, you know, I think you saw it in Covid, and then it continued, you know, past Covid, and you've seen it at different inflection points in our industry where, you know, I think the really smart dealers are going back and focusing on the blocking and tackling, you know, of their business and how to get a little bit more, you know, back to the basics. I think the, you know, the CDK cyber event, you know, caused that, you know, it's like, you know, how do we desk deals? Well, if we don't have technology, you know, are we not able to desk deals? Well, certainly, you know, you are able to desk deals. You just got to go back to the future a little bit and you know, do it kind of the old fashioned way.

The shiver that ran through the industry in July was one of epic proportions. The cyber attack and ransomware that occurred at CDK global didn't just affect the DMS giant. It also rattled the industry and left everyone considering what could occur within their own operations. One could imagine that at other DMS companies, the moment was sobering and real. Reynolds and Reynolds reached out with an offer to assist dealers as well as reflect on their own best practices. Today, about a month later, we find its president, Chris Walsh, in the calm, following the industry storm. But also cognizant that this is a time for the company and every business to pay attention to the threat that is very real. Chris has been with Reynolds for more than 35 years, holding various leadership roles in Business Development, Operations, quality control, sales, marketing and support. Today, we catch up with him on that topic and others, including his interaction on a regular basis with dealers across the country. Among the issues he's hearing about, IT management, compliance, insurance, employee training and, of course, cybersecurity. There is also the issue of Reynolds assisting dealers who are trying to unlock the next big breakthrough in productivity, including AI and a changing digitized process. We hit all of those subjects with the president of Reynolds and Reynolds in the aftermath of the cyber tsunami today on Full throttle.

Hi. My name is Chris Walsh. I'm the president of Reynolds and Reynolds, and this is Presidio's Full Throttle podcast.

A great big welcome to you, Chris. It is a pleasure to have you on the program. I know you're out traveling, seeing a lot of dealers. We're going to talk about that, but thanks for taking the time. 

Oh, it's always a pleasure to talk to you. Jason, good to be here.

Thank you. And whether you're visiting stores or bringing dealers to Reynolds headquarters in Dayton, I know that there are many subjects that are top of mind. We're going to get into some of that. What kind of conversations are you having? Are you having right now?

I mean, you know, we have a lot of, you know, general conversations that, you know, the great thing about, you know, kind of being on the road and talking to customers and prospective customers is every dealership is different. Every dealer is different, through every conversation is a little bit different that it makes it fun, you know, but there's some common threads of what you know people are interested in talking about right now. Certainly, you know, given you know what happened in July, you know, cyber security is something that is top of mind for, you know, probably pretty much every dealer that I talk to, and then a general, you know, discussion around, you know, whether it's, you know, operational efficiency, or how can I do more with less people, or how can I take better advantage tech with with technology to create, you know, a better consumer experience, a better experience for, you know, my associates. Those seem to be, you know, kind of the general themes that you know, we end up landing upon and spending most of the time talking about.

So let's get into it. Because it was, it has been so top of mind. We've talked to dealers on this program about it. But what are your big picture lessons, or the big picture lessons that the industry got as a result of the cyber attacks on CDK global?

Yeah, well, I mean, I think the the overall message that I think this sent certainly to us. I can't speak for the entire industry, but I feel confident everybody got, you know, something similar is this could happen to anybody you know, and it's not, you know, it's not an isolated thing. It's happened, you know, in lots of industries, to lots of companies, some very large companies. So it's hit automotive in, you know, kind of a major way with CDK. But I think it's, it's caused, you know, certainly us to reflect on, you know, what are we doing today? And we've been, you know, focused on and interested in cybersecurity for over five years, you know, so we've been we recognized it as a threat a long time ago, we've been doing a lot internally, you know, to protect our infrastructure and protect our customers. We purchased Proton, an IT management compliance and cybersecurity company about two and a half years ago. We built a security operations center in order to manage our infrastructure and our Proton customers. But you know, when I, when I think about, you know, what's going on, I kind of break it down into, you know, five kind of layers, you know, you have, you know, IT management. So how are you managing your infrastructure, your local area network, your wide area network? You certainly have compliance. You know, are you compliant with legislation out there? Are you documenting what needed to be document what needs to be documented? And you know, are you doing the things you know that you need to be doing? Do you have the right processes in place? And then cyber insurance is another layer, you know, something that we're interested in, or we're actually interested in, coming out with an actual cyber insurance offering to customers. So that's an in kind of the works for us, employee training and then security and monitoring, and, you know, the last two, employee training and security and security and monitoring, I think are good ones to really shine a light on, because, you know, one they're they're pretty actionable. You know, from a dealership's perspective, they can have a pretty big impact on, you know, how secure your network is and they are things that if you don't focus on, can really have, you know, negative impacts. So think about all it takes is one email to one associate at whatever level that he or she opens up, clicks on an attachment and, you know, it starts, you know. So, again, you know that that that employee training on how to efficiently manage, you know, email is, you know, really a critical piece of this and something we certainly recognize, and I know a lot of viewers are, but I see those five layers as being, you know, kind of the keys to making sure that you're doing all the right things. 

You were very helpful. You offered your help to the industry, you offered your help to dealers when, when all of this occurred. There had to have been a moment where you say, you know, there, but for the grace of God, go I. Right? I mean, isn't there a how vulnerable is the retail automotive ecosystem to these kinds of attacks in the future?

You know I think, I think it's probably, you know, relatively vulnerable, you know, one given, you know, the scale of the automotive, you know, ecosystem, right? It's a massive ecosystem. It's not just dealers, you know, it's OEMs, and it's third parties, and, you know, it's, it's the, you know, the lending institutions that are out there. So there's lots of, you know, entry points, you know, into that ecosystem. So I think it's, you know, relatively vulnerable. I can't compare it to, you know, healthcare, or, you know, manufacturing, how we do, there's our manufacturing element, but other industries outside of automotive, not sure I can compare it to those. But, you know, we feel good with what we have been doing and what we are doing, but we also, I think we approach this, and I think you should approach this with, you know, a level of humility and recognition that you know this could happen to you. This is something that we need to be diligent about. We need to be thinking about, and we need to be focused on it every day, and we need to constantly be looking at, okay, what are we doing? And is it the right things to be doing? Are we doing it the right way? And is there a way to do it better, to provide an even more security for our company and for our our customers? So it's an everyday kind of thing for us, and I'm sure for many people in the industry.

And to that point, are there opportunities in the aftermath of this big disruption for vendors, those in the industry, to develop new products that help reduce dealerships exposure to attacks in the future.

I mean, I think there are. I mean, there's been, you know, there's been attacks in our industry, and you read about some of those, and you know, the various, you know, automotive publications that are out there, you know, and I won't name the organizations, but you know, there's been ransomware events with individual dealerships, and some of those dealerships have been, have been large. So, you know, I do think there is an opportunity to, you know, have an offering that is available for dealers to take advantage of where they may not have, either the people, the intellectual capital or just the general knowledge to be able to to protect their environment as well as they should. So that was, you know, a key motivator for us when we act, when we acquired Proton, to be able to offer, you know, have an offering that says, okay, we can protect your IT infrastructure, you know, for you and help with some of the employee training. We can also help with, you know, compliance, make sure you've got documentation and you're doing the right things, and that we can also provide, you know, the cyber security piece where we're doing, you know, intrusion testing and monitoring and those kinds of things to to make sure that we're continually challenging the customer, that they're doing everything they need to do, and that we're doing everything we need to do in order to be safe.

Ironically, technology could be the answer, despite the fact that technology is the culprit, right? 

Yeah, it's kind of funny that it worked that way. 

Right, right. But it is about reducing risk, reducing customer risk, I guess, and also creating workarounds that help dealership operations run more smoothly should something like this happen again. I know you're hyper focused on all of that, and I want to go back to something that you said earlier. Doing more with less. Dealers are really craving the next breakthrough, the next unlocking moment in technology, aren't they?

Yeah, I think they are. I mean, there's a couple kind of common themes that I hear when we when we talk to talk to customers and prospective customers. You know, there's certainly a need, or a require, a desire to have more mobility, you know, in their, in their in their operations. And by mobility, I'm talking about things like having the service advisor, have the ability, you know, to do things on a phone. Have a technician with the ability to do things on a phone, so they're not so much tethered to either a PC or a tablet, and they can be out, whether it's interfacing, you know, with the customer, or, in the case of a technician doing more in their stall versus leaving their stall, you know, to do other things and creating better shop efficiency out there. So there's those kinds of things. I think there's a real need and a desire to have a connected platform, single logins across all your applications, a single automated reporting set a unique identifier, single unique identifier, you know, for every customer. So, you know, think about, you know, how you could interact with with a consumer. So Jason Stein comes in the store. The more I know about Jason, the more I know about his past buying behavior, you know, demographic information, maybe digital information that I can capture from his activity on, you know, our website, the more I know about Jason, the better I can interact with you, the better I can predict what you might be likely to do next. So when you think about that, you're you're likely to have a more relevant conversation with Jason. So you're talking about the things that are important, you know, to him, and what he's about to do, or what he wants to do next. And you can also market, you know, to your customer, you know, much differently. So those are, those are some of the things that, you know, we talk a lot about. E-Contracting is another one, another big focal point, I think, in the industry in general, that you know, we've been focused on for a couple of years now. And, you know, I tell our product teams, you know, all the time that I believe it's, you know, a top five project for Reynolds and Reynolds, because it can drive so much value, you know, to a dealership, both operationally and economically, that it's really something that could be, you know, really important to our customers going forward.

When you spoke at the Presidio retail Conference this past spring, we touched on the area of AI, which, of course, you can't have a conversation these days without either talking cybersecurity or AI. So what are the low hanging fruit areas for AI. Where are you seeing some, some immediate progress for dealers?

Yeah. Well, I think the first thing that you know, from my perspective, that I try to keep in mind, is that, you know, we don't want to use AI to solve one single thing you know, over, I think over the past 20 or 30 years, we've tended to in the industry solve problems like, you know, one problem at a time, or one department at a time. And I think to approach AI like that is probably not the most efficient way to approach it. But I think when you think about AI, that you need to have this underlying, you know, kind of AI layer that all the tools that you're using and building kind of pulls, you know, from that layer, that way, you've got a much more, I think, holistic approach, because you're leveraging a wider, you know, array of data. But I think some of the, some of the low hanging fruit that we're either doing things with now or doing things and trying to do more in other areas, you know, what can we explore that we're maybe, you know, not delving into? So I think, from a low hanging fruit perspective, I think you know customer interactions, you know whether it's chat and text. I think there's opportunities to leverage AI there. Phone call, review and resolution opportunities there, and you can really connect AI with your CRM tool. From that perspective. Prospect identification and outreach. You know, who's likely to buy? What are they likely to buy? What's the best way to communicate with them? And then, you know, used vehicle merchandising. Used vehicle acquisition and merchandising. I think there could be a real role there for that. And we've been looking, spending a lot of time looking at AI relative to our auto vision platform, which is a used vehicle acquisition and merchandising platform. And then I also think, you know, you can connect some processes there, you know, think about used vehicle acquisition and merchandising. You know, we can connect our reconditioning process into that, you know, workflow by leveraging tools like that. So our recontract platform, you know, and auto vision can become one, synchronized, you know, workflow, you know, through utilization of things, you know, like AI. So it's a, it's a really interesting you know, position, or really interesting you know, opportunity, I think, for us and for the industry in general. 

You have such a unique window into where the industry is on a regular basis, because, as we said, starting off this conversation, you talk to so many dealers. So it's been three or four months since we talked to you at the Presidio event. What are you hearing now in terms of, you know, the term that we've coined, the great normalization.

Well, it does seem to be, you know, our inventory levels seem to be, you know, leveling off a little bit. You know, what I'm seeing is, you know, I think you saw it in covid, and then it continued, you know, past covid, and you've seen it at different inflection points in our industry where, you know, I think the really smart dealers are going back and focusing on the blocking and tackling, you know, of their business and how to get a little bit more, you know, back to the basics. I think the, you know, the CDK cyber event, you know, caused that, you know, it's like, you know, how do we desk deals? Well, if we don't have technology, you know, are we not able to desk deals? Well, certainly, you know, you are able to desk deals. You just got to go back to the future a little bit and, you know, do it kind of the old fashioned way. So I think there's those kinds of things that are happening. So, you know, I think there's, there's a lot of that that's going on and just, you know, getting back to the basics and focusing on things like fixed operations. And what can we do, you know, better there to keep our customers, you know, in our dealership and in that kind of infinity loop once they buy a car, and maximizing customer throughput when they are in, you know, a dealership, creating a unique consumer experience, whether it's digitally or, you know, in store in an analog environment, and connecting, you know, those that digital and in store experience so you that you have a, you know, connected consumer experience as they flow through a digital into an in store experience.

Wonderful. You're going to be in front of a lot of dealers at your retail summit in a couple of weeks, August, 19 and 20th at Lansdowne resort outside of Washington, DC. What are you most looking forward to?

Well, what I'm most about, I guess the thing I'm most looking forward to is just connecting with, you know, dealers and the industries. We have retailers there, we have OEMs there, we have people outside of, you know, those worlds, you know, captives and those kinds of, you know, people are there, and it's really interesting to me to talk to and listen to their perspective on the industry as it exists today and where it's going, because everybody looks at the industry through a different lens. And I think being open to how people look at it is really interesting to me. And I just, I like connecting, you know, with people, whether they're customers or even if they're not customers, and listening to their story, and you know what they're focused on, I'm really interested in listening to people like, we have Mike Stanton from NADA coming. We have Vince Sheehy and Ed Wheaton, two very successful, you know, retailers that are going to be there, really interested in what they have to say, we had a lot of requests, as you might imagine, for, you know, some sessions around cyber security and and those kinds of things. So we have Will Farley, who is our Chief Privacy Officer and Vice President of data strategy, he's going to be doing a session. We have Frank Abergnalli as a guest speaker. If you don't know who Frank is, he is, who the movie, Catch Me If You Can was based upon that Leonardo DiCaprio starred in, really, really interesting, fascinating guy that has a really good message from, you know, his his book and his movie, and connecting it to, you know, our industry and our world today. So it's, I heard him talk once, and he's really fascinating and highly entertaining. And then our chief information security officer, Nikhil Kalani, will be there, talking about cyber security and answering questions about, you know, what Reynolds has been doing and what we are doing uh, you know, to do everything we can to provide a safe environment for our customers. We will, we'll announce a acquisition during that it'll probably be publicly announced maybe the next week or 10 days, but we will announce an acquisition there. We're going to have, we've got some best ideas and best product competitions in front of a live audience that always seem to be, you know, really popular and really fun events to either participate in and listen to. So really a jam packed, you know, day that, you know, we're really excited about. This is our second year of doing it, and, you know, we we're going to, you know, we're really excited about, you know, connecting with the industry and that to that kind of a format. 

Register at reyrey.com/amplify I was the moderator fortunate to be a moderator with a couple of Indy car drivers last year at the Indianapolis 500. It is a well attended, great event. I wish you the best of luck. Thanks for coming on the program and for telling the story of where we are today and maybe what we need to be thinking about for tomorrow.

I appreciate it Jason. Always great to talk to you and look forward to seeing you in person hopefully soon. 

Great. Thank you, Chris.

Take care.

Thanks again to my guest, Chris Walsh, president of Reynolds and Reynolds. Thanks for listening to full throttle. Come back to us again later in the month for our next interview on this platform. Email me with suggestions. JStein@thepresidiogroup.com or go to the website the thePresidiogroup.com you can also follow us on LinkedIn. Thanks for listening to the program. We'll see you next time you.