Things to Consider When Choosing a Software Reseller

10/10/2011 Konnie Seago ERP

The choice of a VAR (Value Added Reseller) to assist with your software implementation is just as important as the choice of software itself. With an ERP implementation, the cost of services will often exceed the cost of the software. A bad implementation of good software can result in total failure.

When comparing proposals from multiple VARS, the bottom line can often be misleading. Generally, resellers have very little flexibility in the pricing of the software but there is a huge amount of flexibility in the pricing for the implementation itself (the services).

Implementation services can include analysis, design, custom modifications, custom reports, testing, training, setup, data conversion and go-live support. The pricing for the services is based on estimated hours required to do the work. There can be a huge disparity between the work that is included in each reseller’s estimate. The key to making the right choice is to be able to compare apples to apples. This may require a detailed breakdown of the estimated hours and dollars so that a valid comparison can be made. For example, one reseller may include training in their estimated hours for “implementation” while another may exclude them from the proposal entirely. This is not apparent when all hours are lumped into one number under the heading of “Implementation.”

Another area for concern is custom modifications. Do all resellers understand the requirements and have all resellers included estimates for all custom modifications in the proposal? Many resellers will simply include a ‘bucket’ of service hours in the proposal that is based on a percentage of the software cost. The actual number of hours required to develop and test the modifications could be much more or much less. The proposal should include itemized estimates for each modification. This allows you to see how much you could save by removing any one of the requirements and it also helps to ensure that each modification has been considered individually.

What kind of training is available? Most software companies offer some kind of online training at no additional cost. While this is an inexpensive approach, it is not always successful. The online training will not include training for any custom modifications and it may include training for many features that will not be utilized by your team, resulting in confusion. Online training will be done with a demo database that will have data that is foreign to the users and will often make it hard for them to understand how the functionality will be used with your own data. The most successful training is generally face to face training that covers only the functionality that will be used by the group and allows users to ask questions. The company’s workflow and internal processes should be incorporated into the training so the users gain a clear understanding of how everything will flow at go-live.

Does the reseller have the resources for a successful implementation? Many resellers will make the resumes of their staff available for review. This can be helpful in determining the experience and qualifications of the individuals from the reseller’s team that will be handling the implementation. Another good question is “…which of these resources will be available to work on our project?”

Does the proposal include service hours for project management? If there is insufficient project management, the implementation is likely to be over budget and unlikely to be on time. Insufficient project management is another leading cause for project failure. The project manager is generally tasked with ensuring the project is both on time and on budget. When changes to the original scope are needed, the project manager should submit an estimated impact to the cost and the timeline for approval. This practice prevents surprises and keeps both parties informed.

These are just a few critical areas that should be considered when choosing a VAR. When there is a significant difference in the proposed service costs provided by different VAR’s, it is important to know the components in each proposal before choosing one VAR over another.

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