Your Friendly, Neighborhood Value-Added Reseller (VAR)

Who does not enjoy a good ERP implementation from time to time? I do! That was not written in sarcastic font, it was a sincere outburst of joy. You get to travel to distant lands, meet new and interesting people, and crush them with an ERP implementation. Well, pre-COVID we used to get to do that. Now we get to Zoom or TEAMS new and interesting people and meet their cats. All is not lost. In addition to our amazing clients, we still get to work with some fantastic Value-Added Resellers or VARs. Almost all the big ERP packages have credentialed and respected VARs that help implement their products. What is that? You are not familiar? Well, read on and find out all about it, in 1,517 words or so.

The whole idea of the Value-Added Reseller or VAR is just what it sounds like. It is a business model where a seller (VAR) purchases a product from a software supplier (Microsoft, Oracle, SAP, etc.) and provides customized or additional features/services to increase its value. The VAR resells the souped-up product at a wee bit of a premium. The great thing about VARs is that they offer flexible pricing, customizable contracts, and after-sale services. They can extend the life of your ERP implementation with post-go-live updates and maintenance. The big vendors? Well, I am not bad-mouthing them, they have a different sales strategy and markets. I find that they mostly sell mostly out-of-the-box solutions and not as much of the niche, business-specific aftermarket services, tools, and custom kits. The gorillas like SAP will customize as you see fit, but I do not believe you will get the personal focus and attention like with a VAR. Big Oracle, SAP, and Microsoft focus is on larger corporations and not necessarily medium or smaller-sized companies.

VARs tend to manage a smaller portfolio of clients. As I said above, you will get a more personal touch from a VAR than from a software giant. I am not being snarky or pejorative to my large software friends. VARs simply can’t afford for clients to fail. The VAR customer pool is typically smaller, their margins are tighter, and clients tend to voice their displeasure all over the internet to other potential clients. As it turns out, it is a big world, but we travel in very small circles. A VAR’s reputation is literally dollars in the bank and even one bad implementation will dramatically affect their ability to win future business. The flip side is that a few VARs do prequalify their clients. If you are not a good fit for their specific services, they may not elect to take you on as a client. They are not being picky or elitist. Just like you, they have a low threshold for failure and will probably recommend another VAR that is a better fit. Another thought to consider is that the gate swings both ways; maybe they are not a good cultural fit for you; perhaps you should swipe left on them.

I believe VARs are aligned to achieving client success in the fastest possible time. So, to deliver victory at the finish line in a scripted schedule, they are usually on-site and very involved. The cost of failure is unacceptably high for both partner and client, so they make sure they are giving solid advice, helping clients make the right decisions, and providing workshopping and training. To help grow their business, they usually have more than one team and a stable of a select few software solutions that they focus upon. Additionally, they hire more seasoned consultants with decades of experience. They tend to have an intimate understanding of the strengths and weaknesses of multiple types of software, enabling them to better guide our clients to a best-fit solution.

Not all VARs are not cut out of the same sheet of cookie dough. In addition to the myriad of unique and varying requirements that exist across the various business verticals, consumers need to consider multiple factors when deciding on partnering with VARs. Some VARs are quite skilled in a particular product line while others shine in other areas or business verticals. It is important that you work with a VAR that has past performance with a company quite like yours. 

It is a pretty postcard, isn’t it? Then why on earth would you hire a third-party consulting firm like LTA? Can’t the VAR ensure success on their own? They could, but I believe is a less risky road with a third-party transformation consultant. Let’s break this down a bit more and begin with VAR negotiations. Some ERP vendors and systems integrators would love nothing more than for you to simply sign their contract without engaging a third party to help you negotiate. The impact on their profits and commissions can be huge, so some VARs will go to great lengths to ensure that you don’t involve LTA or other third parties to help you negotiate. Some will go so far as to offer immediate discounts to bypass a more formal negotiation process. Sadly, a few will badmouth consulting firms. At LTA we provide a critical bridge between your company and the VAR. LTA will step up and protect your company's interests to ensure that you do not get inadvertently step into the muck and end up with a financial or contractual mess. LTA is a low-risk investment with a positive upside. In most cases, the discounts we uncover offset the costs of our consulting services and more. Specifically:

• LTA starts by being laser-focused on VAR hourly rates.
  • It is rare, but some VARs are clever at arranging total costs to be more in line with what you want to hear, but not necessarily what you need to hear. 
  • LTA can help you determine the total cost of ownership, and help you navigate through sincere but overly optimistic assumptions, that may undervalue the realistic costs and timelines of your project.
• LTA will ensure that you have the right to approve or replace the VAR team.
  • Some VAR consultants are exceptionally well qualified and have a great track record but, for some reason, are not a good cultural fit with your company.
  • You will be spending a lot of time and money with the VAR. You and your team need to be comfortable and confident in all the resources. LTA will help you select a VAR that has a deep bench of talent.
• VARs do a great job providing their unique services. To complete the circle, LTA fills in the gaps between VAR and the client. How?
  • We set realistic expectations with you and the VAR to ensure everyone understands their responsibilities. Specifically, what your company team will be responsible for during the implementation.
  • We also look for areas that can be missing from VAR contracts, such as change management, data management, and tailored training.
  • LTA will ensure that the workshopping is on track, your processes are tight, and that training is sticking with the end-users.
  • LTA will facilitate weekly project team meetings and monthly steering committee meetings. Honest and continuous horizontal and vertical communication is key during the project.
• If possible, LTA will be onsite – if that stupid COVID would just go away. We know that it is crucial to sit in the same mud as the project team. LTA will go the distance alongside you. Remote engagement seems to be the watchword today, but there really is no substitute for being on-site. Our focus is especially keen during that last mile to the finish line.

LTA works well with vendors and VARs.

We view the client/VAR/LTA team as a three-legged pot. You need all three legs to keep the pot upright and the goodness/success/synergy cooking inside the pot. We are the catalyst for success and a critical link to a smooth go-live and successful transformation. LTA embeds our employees into your company, culture, and project team to ensure they are getting what they need when they need it. We anticipate risks, give an experienced voice to leadership, advocate for your team (and sometimes prod them), and work with the VAR to ensure that everyone’s implementation is a success. We enjoy our collaboration with VARs. We focus on ensuring their efforts are maximized and that the VAR team is not squandering their precious talent and time on chasing rabbits, herrings, or dead ends. Finally, LTA checks our egos at the door. We are focused on you, the client, and believe that teamwork makes the dream work. Our goal is an uneventful and successful go-live, and the ability to prosper years after go-live. 

 Do not take my word for it. Speak to the VARs that have worked with us in the past as well as some of our former clients. I assure you they remember me well as I do have a colorful back catalog. Playing well with others is not just polite; it is good for business and much more fun during the implementation.