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ERP VARs Vetting VARs for ERP Implementations

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By Rick Cook

How about a VAR for ERP?

When you implement an ERP system you've got several places to look for help. The ERP software vendor may offer implementation services, there are independent consultants, VARs, and other options.

Using a VAR (Value Added Reseller) is one of the most popular choices for small and medium businesses implementing an ERP system, and VARs are increasingly being used in large, global, enterprise deployments. Like all your choices, VARs have advantages and disadvantages and you need to understand the strengths and weaknesses of each of your options in order to make the best decision.

The Importance Of People

One of the most important factors in choosing an ERP facilitator has little to do with what kind of partner you choose. It is instead critical to know who will be actually doing the work. It's important to nail this down solidly in the software contract negotiation phase.

Most ERP software consultants will have more than one person who can do the implementation and most of the time there will be very different levels of skill involved. When a potential partner tells you they have X years of experience in implementing ERP software and they have handled Y successful projects, that's important information, but what is more important is how much experience and how many successful implementations your proposed project manager and his or her team have.

Typically even a large company will have one or two “stars” who have extensive, solid experience in successfully implementing ERP projects, and a bunch of people who are still learning the business. These others may have credentials and certificates testifying to their ability, but in ERP implementations, nothing takes the place of solid experience.

It's not uncommon for vendors to bring in their most seasoned people during the sales cycle and then substitute much less experienced staff to actually manage your project. Obviously this is anything from sub-optimal to a formula for disaster.

Whether it's a VAR, the ERP software company or an independent consultant, it's important to specify who will actually be doing the work, by name and with supporting resumes. Ideally this should include specifying how many days a week, and which days, the team leader will be on site. Don't be surprised if the price goes up if you insist on this, but that's better than not having the services of someone who's been around the block a few times.

The Advantages Of VARs

There are several business advantages to choosing a VAR to implement your ERP system.

Locality—Chances are a VAR will be local, sometimes within the same city. Note that this isn’t assured, but it’s more likely with VARs than other kinds of implementers. This makes it much more convenient during the implementation and it can also save you money on travel expenses.

Special Knowledge—Most VARs started out in the business selling and integrating enterprise software and supporting hardware. While some may not know as much about the application software as the ERP software publisher, they are likely to be a lot more knowledgeable about the hardware, networks and potentially complex issues such as system integration and software customization. This underlying infrastructure support is important and knowing it better may give the VAR an advantage.

Understanding Your Business—Unlike ERP software vendors and many consultants, VARs tend to specialize in vertical markets. They not only resell the vendor's ERP system, but they tend to sell and implement it in particular industries. This helps them provide the services you need to implement your system with the minimum amount of hassle. The more the implementer knows about your business and how it operates, the more likely you are to have a successful implementation.

Small Business Expertise—Often times VARs are small business specialists. They understand the problems and constraints of small businesses. This is especially important because small business is not the norm for many ERP vendors. A VAR who has been working with small businesses for years can be particularly valuable.

Potential Disadvantages Of VARs.

Possible Limited Ability To Customize—Some ERP VARs are contractually prevented from making major modifications to the source code of the software. This can be a problem if you need to add functionality to the application. On the other hand, major surgery on an ERP system (as distinct from customization, which can be extensive) is a questionable proposition to begin with. It runs up the cost considerably, makes it hard to stick to a timetable, and causes big problems when its time to upgrade or replace the package.

Fewer Resources—Most ERP VARs don’t have the number of consulting resources like the software vendor does. The VAR’s pockets aren’t as deep and its human resources tend to be more limited. This can be a major consideration if the implementation goes suddenly sideways.

This also applies to financial stability. An enterprise software vendor is more likely to be around in a few years if you need them.

It used to be that VARs were the only choice for ERP implementation. Many vendors typically worked through VARs and the network of ERP implementation consultants wasn't well developed.

That's changed. Today you have many more possible choices to help you get your ERP system running successfully. ERP VARs are still widely available and often a great option for implementation help, just not the only option. End

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Whether it's a VAR, the ERP software company or an independent consultant, it's important to specify who will actually be doing the work, by name and with supporting resumes.






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