Cloud-Based Dealer Management Systems: What to Move First

A cloud-based dealer management system (DMS) runs on the vendor's servers and is used through a browser, so the dealership stops maintaining its own DMS server. The harder part is the move, not the software: clean the data first, rebuild every connection second, and cut over at a month-end with a downtime plan ready.

At a glance

• A cloud-based DMS moves server upkeep, backups and updates to the vendor, but the dealership stays responsible for protecting customer data under the FTC Safeguards Rule if it finances or leases vehicles.
• The June 2024 CDK Global cyberattack affected about 15,000 dealer locations at once, so any shared, vendor-run DMS needs a written plan for days when it is unavailable.
• The order of a DMS move matters more than its speed: list connections, clean records, decide what history moves, test with a sample, then cut over and reconcile.
• Customer-facing tools such as the CRM and texting usually run as separate systems, so changing the DMS and the CRM in the same month doubles the retraining load.
• Shiftix Cloud is not a DMS; it is a customer operations platform that works alongside the DMS a dealership already runs or is moving to.

What a cloud-based dealer management system is

A cloud-based dealer management system is a DMS that the vendor hosts and maintains, which staff open through a browser or app instead of software installed on a server at the store. The DMS itself does the same core jobs either way: deals and F&I paperwork, inventory, parts, service repair orders and the dealership's accounting. For a fuller description of those jobs and where a CRM picks up, see what a dealer management system does and doesn't do.

Vendors use "cloud" for two different set-ups, and the difference matters when comparing offers:

• Built for the web: one shared application that every dealer logs into, updated by the vendor for all customers at the same time.
• Hosted: the dealer's own copy of an existing DMS, moved onto servers the vendor runs. Procede, for example, describes its Excede hosted service as running the application and data on Microsoft Azure with no on-site hardware (Procede hosted services page).

Both remove the server from the back office. A hosted copy may keep the old screens and update schedule, while a web-built system usually changes how staff work day to day. Ask any vendor which of the two it is offering.

Cloud vs. on-premise DMS: what changes for the dealership

Moving from an on-premise DMS to a cloud-based one changes who runs the servers, how updates arrive and where the risks sit, while the dealership's processes and data stay its own responsibility. The same six criteria are used for each option below; the descriptions are general, and any single vendor may differ.

On-premise DMS

• Who runs the servers: the dealership or its IT provider, including hardware replacement, power and cooling.
• Backups and updates: scheduled and checked by the dealership or its IT provider.
• Access from outside the store: possible, usually through a VPN or remote desktop the dealership sets up and secures.
• Outage exposure: a failure affects that dealership only, and recovery depends on its own backups.
• Cost shape: licences plus hardware, IT time and replacement cycles, which are easy to leave out of a comparison.
• Who it suits: dealers with capable IT support, an investment in existing servers, or specific requirements about where data is kept (Salesforce dealer management software guide makes a similar point).

Cloud-based DMS

• Who runs the servers: the vendor or its hosting provider.
• Backups and updates: handled by the vendor; the dealer should ask how often backups run and whether restores are tested.
• Access from outside the store: through a browser or app from approved devices, which helps multi-rooftop groups and managers who work off-site.
• Outage exposure: an internet outage at the store or a problem at the vendor can stop work, and a vendor-wide incident hits every customer at once.
• Cost shape: a recurring subscription, usually driven by users, locations and modules, plus conversion, training and integration fees.
• Who it suits: dealers who want to stop running servers, groups with several locations, and stores that need remote access without building it themselves.

Neither model is automatically cheaper. Compare the full cost over several years, including staff time, conversion, integration fees and the cost of leaving, not the subscription against a server quote.

Security and compliance: what moves to the vendor and what stays

A cloud DMS moves day-to-day security work to the vendor, but it does not move the dealership's legal responsibility for customer information. The FTC says most automobile dealers who finance or lease vehicles are financial institutions under its Safeguards Rule (FTC Safeguards Rule FAQ for auto dealers). RV, marine and powersports dealers that arrange financing should check with counsel whether the same applies to them.

Under the Rule, a covered dealer must oversee its service providers: choose providers able to keep appropriate safeguards, set security expectations in the contract, monitor their work and reassess them periodically (FTC Safeguards Rule guide). A DMS vendor holding customer and finance data is one of those providers. The same FTC guide lists safeguards a dealer must have, including:

• Encryption of customer information on its systems and in transit.
• Multi-factor authentication for anyone accessing customer information.
• Secure disposal of customer information no later than two years after it was last used, unless there is a business or legal reason to keep it.
• Notice to the FTC within 30 days of discovering a breach involving the unencrypted information of at least 500 consumers, a requirement in effect since May 2024.

In practice, ask the DMS vendor to show how it meets each of these, put the answers in the contract, and keep a record of the review. This article is general information, not legal advice.

Plan for the day the DMS is down

A dealership on any vendor-run DMS needs a written plan for running sales, service and parts while the system is unavailable. In June 2024, ransomware attacks on CDK Global affected about 15,000 dealer locations across North America; some dealerships switched to paper, and services were restored in phases until early July (TechTarget, "The CDK Global outage", citing an Anderson Economic Group estimate of more than $1 billion in collective dealer losses). The incident does not show that a cloud DMS is less safe than a server at the store, but it does show what happens when many dealers depend on one provider at the same moment.

A downtime plan can be short. It should name:

• How deals are written, and which paper forms are pre-printed and stored.
• How repair orders are opened and parts are issued.
• Where today's appointments and customer phone numbers can be found if the DMS cannot be opened.
• Who decides when to switch to the plan, and who re-enters the paper work afterwards.

Customer contact records that also live in a separate CRM or communications system are one reason a store can keep talking to customers during a DMS outage, provided that system does not depend on the DMS to run.

What to move first: a DMS migration order

The safest order for a DMS move is to understand and clean what you have before any data is converted, then test, then cut over. The steps below are a recommended sequence based on the vendor migration guides listed in the sources; your new vendor's conversion team will have its own checklist, and theirs should take priority where they differ.

1. List every connection to the current DMS. Write down each system that sends data to or takes data from the DMS: the CRM, website and inventory feeds, OEM and lender links, accounting, parts ordering, payroll and texting. Each one must be rebuilt or confirmed on the new system.
2. Clean customer and vehicle records. Merge duplicate customers, fix phone numbers and email addresses, and close out stock units that are long gone. Errors moved into a new system are harder to find later.
3. Decide how much history moves. Agree which years of deals, repair orders and accounting detail convert into the new DMS, and which stay in an archive the store can still read. Keep the Safeguards Rule disposal requirement in mind when deciding what to keep.
4. Map fields and test with a sample. Check that each field in the old DMS lands in the right field in the new one, then convert a small set of customers, vehicles and open repair orders and check them by hand.
5. Rebuild and test the connections. Confirm each connection from step 1 works on the new DMS before go-live, including what the CRM receives when a vehicle is sold or a repair order is closed.
6. Train by role. Sales, F&I, service advisors, parts and the office each need training on their own screens, close to the go-live date.
7. Cut over at a month-end. Accounting is easier to reconcile when the switch follows a month-end close. Keep read-only access to the old system for look-ups.
8. Reconcile after go-live. Check inventory, open repair orders, receivables and the first month's reports against the old system and bank records before retiring it.

Should the CRM move at the same time as the DMS?

Changing the CRM and the DMS in the same month is usually best avoided, in our view, because sales and BDC staff would be learning two new systems while customers keep calling. Moving the DMS first and the CRM later, or the reverse, lets each change settle. The exception is a CRM built into the DMS platform, where the two move together by design. Whichever order you choose, confirm the CRM connects to the new DMS before the switch; the automotive CRM guide explains which records each system should own.

Questions to ask a cloud DMS vendor before signing

The questions below cover the points most vendor pages leave out: data ownership, exit, outages and integrations. Ask for written answers and attach them to the contract.

• Is this a web-built system or a hosted copy of an existing DMS?
• Who owns the data, and in what format can the dealership export all of it, including history, if it leaves? Is there a fee for that export?
• What uptime does the contract commit to, how is it measured, and what happens if the vendor misses it?
• How often are backups taken, where are they kept, and when was a restore last tested?
• How does the system handle encryption, multi-factor authentication and user roles, and how will the vendor support the dealership's Safeguards Rule review?
• How quickly will the vendor tell the dealership about a security incident?
• Which of our current connections (from the migration list) are supported, and do any carry extra fees?
• How much history converts as standard, and who checks the converted data?
• What is the procedure, and the vendor's support, during an outage?

Whether a vendor publishes its pricing varies; most quote by users, locations and modules, so ask for the conversion, training and integration costs to be itemised as well.

Where Shiftix Cloud fits during a DMS change

Shiftix Cloud is a customer operations platform that works alongside a dealership's DMS; it is not a DMS and does not replace one. The Shiftix Cloud CRM describes the DMS as the operational system of record, while Shiftix Cloud brings the customer, vehicle, lead source, conversations, appointments and next steps together in one record for sales, BDC, management and service teams, with AI assistance that is human-controlled: staff review and approve.

When this guide was checked in October 2026, the Shiftix Cloud integrations page listed CDK (Drive), Reynolds & Reynolds, Dealertrack, Tekion, Lightspeed, Dominion, Procede, EverLogic, IDS, PBS and others as DMS integrations, and said that availability, data direction, permissions and setup are confirmed during implementation. A dealer changing DMS should check the new system against that list and confirm the details before go-live.

If a DMS change is part of a wider review of how leads and customers are handled, the complimentary Revenue Leak Audit looks at lead response, follow-up, conversion, customer retention, accountability and workflow, with no obligation and no software purchase required.

Next steps

The right next step depends on where the dealership is in the decision:

• Still deciding between cloud and on-premise: compare several years of full cost on both sides and run the vendor questions above against at least two cloud vendors.
• Already chosen a cloud DMS: start the connection list and record clean-up now, before the vendor's conversion schedule begins.
• Running an RV, marine or powersports store: compare vertical options in the RV dealer software guide, the boat dealer software guide or the powersports dealer software guide.
• Unsure what the DMS should own versus the CRM: read dealer management system vs CRM before the vendor demos.

Frequently asked questions

Is a cloud-based DMS always cheaper than an on-premise DMS?

No, a cloud-based DMS is not automatically cheaper. The subscription replaces server, backup and IT costs that are easy to undercount, but conversion, training, integration fees and the cost of exporting data on exit are added. A fair comparison sets several years of full cost for both options side by side, using the same number of users, locations and modules.

Does a dealership have to stop selling during a DMS conversion?

Not for the preparation, which is most of the work: record clean-up, field mapping and test conversions happen while the old DMS is still in use. How much the cut-over itself disrupts selling depends on the vendor's conversion process, so ask the vendor for the cut-over schedule, what staff can and cannot do during it, and how deals written that day are entered.

Can a dealer group move to a cloud DMS one rooftop at a time?

Often yes, though it depends on the vendor and on how the group's accounting is set up. Moving one store first lets the group test the conversion and training before the others follow. The trade-off is a period of running two systems, which complicates group-level reporting and any inventory or parts shared between locations, so ask the vendor how it handles a mixed period.

Sources

• FTC: Automobile Dealers and the FTC's Safeguards Rule, Frequently Asked Questions
• FTC: FTC Safeguards Rule, What Your Business Needs to Know
• TechTarget: The CDK Global outage, explaining how it happened
• Salesforce: Guide to Dealer Management Software
• Procede Software: Hosted Services
• Verifacto: DMS Data Migration Best Practices
• Shiftix Cloud: Integrations