Incorporating New Computer Technology Increases Profitability

Donna Englander
Posted on January 1, 1993

Scott Solombrino cut almost 57 days off his billing cycle by offering clients computerized billing

Imagine being able to cut almost two months off your billing cycle. Through the innovative use of computer technology, Scott Solombrino, president of the Dav El Livery Network, was able to accomplish this task.

In an effort to keep his company’s computer technology as up-to-date as possible, Solombrino has not only incorporated new, quicker ways to bill clients, but will soon be linking the 327 network affiliates with a new computer system. He forecasts that the limousine industry will one day progress like the airlines and car rental companies with all reservations and billing being handled on a national computer network.

“Everyone has said the one ingredient we need to improve on is not cars, drivers, sales, or accounting, but the computerization of our industry and in our business specifically,” says Solombrino. To meet the goal of increased computerization, he has worked with clients to ease their reservations and billing needs. In addition, he believes getting his affiliates online will bring his company to the next level in providing service to his clients around the world.

Experimenting with Technology

Solombrino is concentrating time and money on the computer technology because he believes there is such a demand from his clients. “Companies want to see the computer development. They want to see that growth internally within your own communication system,” he says.

In order to give his clientele what they are looking for, Solombrino has been experimenting with different systems. He has installed a few experimental modems in clients’ offices. With these modems, the clients can directly enter their reservations into the system. Additionally, Dav El is hooked into the American Airlines Sabre reservations system.

“We don’t find there is a great demand for people to use these things most would rather fax or phone in their reservations. Clients aren’t comfortable with the computerization in our industry yet. It’s a matter of the people we do business with not realizing that the industry is maturing. It is going to take a few more years for people to get that attitude,” he predicts.

One problem area that Solombrino hopes to avoid is becoming over computerized. Because limousine company clients tend to be top executives and other VIPs, the person making the reservation needs to be assured everything is done right. “You don’t ever want to have your clients calling up and speaking to a voice-activated recorder that goes directly into a computer system without them ever actually talking to another person,” adds Solombrino.

Billing is one area that Dav El is finding fits in well with computerization. The company is sending diskettes to clients “that include all of the billing information. The client then simply downloads the information directly into his own accounts payable system and will generate a check usually in three working days. “This has worked out tremendously well and we are doing more of this type of billing around the country,” he says.

According to Solombrino, every client that utilizes this type of billing went from paying the bills in 30 to 60 days to paying in three to seven days “They just send around an office memo and have people approve the charges Once it goes into their computer system, they actually feel comfortable enough to just cut the check,” he says.

Not every company is jumping at the chance to try this new system though. Many companies don’t have a centralized billing department and can not accommodate this service. “We thought every company would want this, but that is not the case,” he adds.

Updating Old Systems

A recent article in the Los Angeles Times explained a problem NASA and major corporations are having with stored information. The data they gathered 10 years ago was being stored on tape that can’t be read by computers today. Additionally, the information became garbled and often, if there was an older computer available, the tape simply melted.

This is an extreme example that illustrates the need to keep up-to- date with the current computer technology Big government agencies and corporations can experience these problems just as easily as a small limousine operation can.

Solombrino realized the set back his company suffered due to lack of an updated computer system. “If you aren’t computerized today, you can definitely stifle your growth,” he explains. “We’re living examples of that. We should be much farther along than we are now. I’m positive we couldn’t handle the growth because we didn’t have the computer accessibility we should have had “

The computer system at Dav El is constantly being upgraded. Solombrino employs a full-time computer programmer and an assistant to troubleshoot any glitches that might occur and to make sure all of the affiliate’s computer programs are compatible,

“In order to grow, we need to buy new systems,” he adds Dav El’s computer system is currently being utilized to its maximum capabilities The problem the company is now facing is that it needs to add certain capabilities, such as centralized reservations and billing, for the entire network.

To meet its growing needs, Solombrino hired computer consultants to update the current software. He estimates the conversion of the software will cost $100,000. “David Klein [founder of Dav El] was actually the first livery operator in the country to be fully automated. So we have lots of experience with computerization,” he says.

Since Klein started the computer system 25 years ago, Solombrino estimates the company has spent at least $2.5 million on software, programming, and hardware. “The computer hardware for the affiliates around the country cost over $1 million—which will go out the window the day we convert.

“We are currently looking at Hewlett-Packard, IBM, and a number of different systems to run the new software package. There is also a possibility we could go to a smaller system due to the changes in computer technology, pay half what we would otherwise pay, and do all the functions we need it to perform,” Solombrino explains.

Getting On-Line

Even though many Dav El affiliates now have the capabilities to interface with each other via modems, the new software will perfect this capability. “This is a very important aspect of the new system because it will eliminate the errors that you could have making reservations using telephones or too many faxes,” according to Solombrino He hopes to have the affiliates on-line by June 30.

Currently, all affiliates are required to fax a completion form for each job to the New York headquarters within 24 hours. Once the form is re­ceived in New York, a person will input the data into the system Dav El generates its billing twice a month from this office.

In the future, all billing will be input directly into each affiliate’s computers. “We have people around the country who do nothing but job completions. We think that staff can be cut in half over a period of time. If we can pick up three days on our billing cycle, that can generate millions of dollars in money because the interest will be accruing in our bank accounts instead of our client’s accounts,” he claims.

Because of the anticipated decrease in the billing cycle, Solombrino believes he will be able to pay the affiliates faster. “We have always paid our affiliates every 90 to 120 days. The reason for that is you have so many third party billings and it takes that long to collect the money. If we can speed that up by 20 days, I think our people will be thrilled,” he adds.

Additionally, all reservations for the entire network will be processed through the new computer system. Solombrino estimates the system will be handling 15,000 reservations per day worldwide. He adds, “We could actually be handling more reservations than that. We haven’t kept track of the number of reservations we handle. We go by revenue.”

Start Small

In order for other operators to avoid the pitfalls his company experienced by not having a computer system that could handle the company’s needs, Solombrino advises every operator to get computerized. “Everybody should be computerized because if a small operator is ever going to get big: he should start out as organized as possible when he is small. Once you fall behind, it’s very expensive and difficult to try to catch up,” he says.

For the small, one-car operator, Solombrino suggests getting a personal computer to do word processing and store information, then buy a specialized limousine software package. As the operator grows, he can upgrade both the software and hardware to suit his individual needs He also recommends that larger operators get custom-designed software to fit their needs.

“At the very least, every operator should have billing computerized. That’s the most tedious part of any limousine business. The dispatch and reservations can come later. At 25 to 50 jobs a day, the reservations and dispatching should be computerized. If you are doing a couple of hundred jobs a day, you should definitely be computerized or you will have problems,” he adds. 

Related Topics: computerization, financial software, Scott Solombrino, technology

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