Raising the VAR

Choose your value-added reseller carefully -- you'll be living together for a long, long time.
John XenakisApril 3, 2001

Buying accounting software for your company should not be a solo effort. The success of an accounting software implementation may depend as much on your choice of an independent local dealer or value-added reseller as it does on the software vendor.

“The VAR is a partner,” says Dan Lubin, VP of IS for The Folio Group, a Worcester, Mass., manufacturer of trade show booths. The company is using accounting software from Great Plains Software Inc., which it obtained through the reseller

“The key to successful implementation isn’t just purchasing good software,” he says. “The key is integration [with your existing systems and business processes]. We look for formalized installation and integration from the VAR; we look at the strength of the VAR, as well as the strength of the application software itself.”

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Anyone Know a Good Tailor?

Accounting software is designed to work with a wide variety of industries. However, each business has its own nuances, such as its own purchase order approval process, its own credit approval process, and a variety of forms. The VAR is expected to be an expert on the accounting package, and can make the necessary modifications to make it conform to the particular practices of your business.

The customer’s relationship with the VAR can get very close, according to Charles Chewning, president of Solutions, a Richmond, Virginia-based consultant on selecting an accounting software package. “I want the VAR to know everything about me, first and foremost — They should be interested in me and my problems, rather than just trying to sell me a box.”

Specific custom features for your company are often necessary because businesses can differ so much in terms complexity. And don’t go by size alone. In fact, small-or medium-sized businesses can be even more complex than large ones at times because limited manpower often requires that employees wear many hats.

Even if a package has a specifically needed feature, there may still be limitations that preclude its use for some companies. “For example, I looked at a package that had 99 categories for sales-tax reporting,” says Professor Harley Courtney of the University of Texas at Arlington. “For a lot of firms that would be quite adequate, but for a mail-order firm, that limitation would be a big problem — because they have to deal with thousands of categories.”

In fact, sometimes fairly substantial modifications are required.

That’s what Rosco Laboratories Inc. of Stamford, Conn., had to deal with when it selected Navision software from NavisionDamgaard US late in 1998. Since Rosco is an international business, they selected Navision because of its multinational features. They also preferred Navision because, unlike other midrange accounting software vendors, it doesn’t use independent VARs, but instead uses company-owned “solution centers” for installation and support.

“You know how your business operates, and they want to tailor the software to your needs,” says controller Vincent Cavaliere. “It’s hazy at first how to do it exactly, and the solution center is there to guide you.”

He indicates that it’s a cyclic process. “You say that you want the software to satisfy this need, and they make the changes based on what you give them,” he says. “It’s give and take along the way. I’ve learned from experience that the solution centers make the changes, then you have to come back and say that it isn’t exactly the way you want it.”

Invasive Surgery

However, there’s a drawback to certain kinds of alterations: If the core accounting software modules are modified to meet the needs of the customer, then the customer is unable to use new versions of the software without making the custom changes once more to the new version.

Because some of the changes required to modify the core modules, Rosco has avoided implementing any upgrades to Navision, according to Cavaliere. “The version we’re currently using is meeting our needs, so until we complete the customization, we won’t do an upgrade.”

However, not all accounting software customization requires changes to the core modules. All but the lowest-cost packages (those under $3,000 or so) provide some sort of capability to make modifications to systems that are outside the core modules, so that the modifications will work without further programming, when the accounting software itself is updated.

Safe Alterations

If you’re planning to purchase and customize accounting software, here are some guidelines to the kinds of changes you can make without affecting the core modules:

  • Most packages provide a method for redesigning screen forms, even adding a limited number of new fields to accommodate the business. For example, you could add a special 4-digit “product type” field stored with each line item on a purchase order.
  • Generally, many packages store with each general ledger transaction a 10-digit, 20-digit, or longer transaction code, and the software permits you to break that code up into segments. For example, you might break the transaction code up into 5-digit segments representing department number, product type, or other business-specific encodings.
  • Some packages provide a “workflow” function for companies that have special approval processes. For example, you can specify that a purchase order over $10,000 must be approved by two vice presidents, and the workflow software will enforce that requirement.
  • Many packages provide for a method to write code, usually in a programming language like Microsoft’s Visual Basic. In many cases it’s possible to write programs which “add on” to the functionality of the accounting software without actually modifying the product’s core modules.
  • Every package contains a report writer that lets you design a wide variety of customized reports.

According to Folio’s Lubin, “It’s important to have a VAR that can customize the software if that’s necessary, but a lot of companies will take the custom route far too quickly, and you end up with something more costly, and sometimes less reliable,” he says. “You make a modification, it gives you a 2% increase in efficiency, you have to back out and replicate your changes in the software for every upgrade. So we’ll go to that kind of customization only if absolutely necessary.”

Five Rules for Selecting a Value-Added Reseller (VAR)

Most accounting software vendors will refer you to a VAR in your local area. Here are some guidelines for selecting a VAR:

(1) Select a VAR who wants to know about you and your problems, rather than just trying to sell you a box. Select someone who acts more like a consultant than a reseller.

(2) Select a VAR with business experience, so that he’s capable of taking your business apart into individual processes, and do a needs definition for your business.

(3) Select a VAR who can refer you to other clients or customers who are as similar to you as possible. Contact these referrals and ask how good the VAR is.

(4) If possible, select a VAR with some industry expertise in your industry, or at least in an industry similar to yours. Select a VAR who’s made customizations to the account software similar to those that you’ll require.

(5) Select a VAR that you’re going to feel really comfortable with — you’re going to be business partners.

Source: Charles Chewning, Solutions