Navigating the ERP Sales Process: Successful VAR Selection

Buying Enterprise Resource Planning (ERP) software is a lot like buying a car. The purchase is infrequent, and the buyer usually has little experience in the sales process. On the other hand, the Value-Added Reseller (VAR) salesperson, is very familiar with the ERP sales process, and as a result, enjoys a decided advantage which tilts the playing field in their favor.

Selecting a VAR that best meets your needs, helps to ensure a successful implementation. By following a few commonsense tips and best practices, such as thoughtful VAR identification, due diligence and a comprehensive review and selection process can help ensure a successful VAR selection.

An ERP implementation is controlled using a specific methodology. Many software publishers provide some type of implementation methodology for use by their VARs. An example implementation methodology appears below. The example illustrates five implementation phases. Note how the pre-sale activities i.e. Navigating the Sales Process” precedes the implementation.

Best Practices

This post provides some best practices to help ensure that you select the VAR which best suits the needs of your organization.

In my experience, four top best practices have emerged that can have a positive impact on a successful VAR selection.
• Visible executive ownership
• Align your requirements to company strategy, goals and objectives
• Take a look at more than one firm
• Get to know the VAR finalists

Visible Executive Ownership

Visible executive ownership is the number one success driver across all ERP implementation tasks and phases. It’s also very important during the ERP pre-purchase process, including VAR selection.

Employees look to company executives for both direction and the level of importance placed on company initiatives. If the executive team doesn’t visibility support the ERP purchase and implementation, and communicate its importance, chances are that the rest of the project team won’t take the project too seriously.

Company executives need to ensure that the project team understands why the ERP is being purchased, how it helps the company achieve its strategy, goals and objectives and why all of the hard work ahead is important to on-going success.

Casually announcing the project by e-mail or word of mouth is not sufficient. Build and convene the project team and formally communicate the project and executive project involvement.

Align Your Requirements to Company Strategy, Goals, and Objectives

Whether formally documented, or in everyone’s collective memory, somewhere there is a set of company strategies that are used to help set company direction. Company strategy awareness plays an important role in purchasing an ERP. The purchase should align with and support company strategies.

For example, if the company is considering expansion through opening new locations, or through acquisitions, be sure that the ERP purchased is strong in multi-entity transaction processing and provides the ability to track transactions, then easily report them, at the level of detail needed.

Defining and communicating strategies is not an easy process. Doing it correctly requires a lot of thought and planning. There are several tools that can be used to assist in strategy development. These tools offer easy to use software that assists in streamlining strategy creation, revisions and updates and can help you get your strategic planning started on the right foot.

Question potential VARs and determine if they have experience implementing an ERP in companies with strategies and goals similar to yours. As in the example above, if your company is considering expansion and acquisitions, be sure the VAR you select has the experience and staffing to effectively implement an ERP in that environment.

Take A Look at More Than One Firm

There are hundreds of VARs that sell and install ERPs. VARs come in all shapes and sizes. Consider some of these options to help in searching for a VAR that suits your needs.

Reach out to your contacts. You’ve probably made contacts through trade organizations, prior positions, past employees and social media. Select contacts whose opinions you respect and find out if they’ve been through this process in the recent past. If they haven’t personally, they may be able to refer you to someone who has.

Set up a call or a lunch. Discuss their implementation and how happy they were with the VAR they used. These contacts are usually pretty honest and will give you the “straight scoop”. As far as I’m concerned, this is the best way to get VAR leads.

Another way would be to ask your accounting firm. While I don’t like this as much as the first method, at least the accounting firm has a vested interest in your company’s success as they have a relationship to manage. As a result, they’ll be careful in their recommendations. Many accounting firms have a relationship with one or more VARs. Some accounting firms actually are a VAR themselves.

Finally, if needed, attend a tradeshow or search for VARs on the internet. I really don’t put a lot of stock in these sources, as you have no real idea who these companies are, so you need to rely on references. I’m not a big fan of vendor supplied references. Think about it, would you provide references that were less than positive, to a potential customer?

If you need to go down this path, due diligence is key to selection success.

If you choose the tradeshow or internet search method, be sure that you complete a higher level of due diligence. Earlier in my career, I was involved in a project where we selected a VAR that we discovered at a tradeshow. They had a great tradeshow presence, very smooth salespeople and provided stellar references. We bought in hook, line and sinker! We didn’t do any other due diligence beyond casually speaking to the references.

When the project started to go south, we found out that the references were for projects completed awhile back, the VAR didn’t keep up with technology as they said they had, and several “key” employees had left the company.

An expensive lesson learned.

Get to Know the Finalists

Set up some introductory meetings with the VARs you’re interested in. Have them meet with a few of your project team members. Go over some of your important requirements and see how the VAR responds.

If the response to everything you discuss is “out of the box, or no problem” be wary. Probe a bit and make sure to get thoughtful feedback, maybe with some general information as to how major requirements will be addressed. Don’t forget to document important statements or promises.

See how the VAR team fits into your company culture and how your team interacts with them. Get the VARs down to a short list (2 or 3 tops) based on these initial meetings.

Convene project team meetings with the VARs on the short list. Don’t let the VAR include only their management and sales team members in the meetings. Have them include the staff members, who will be involved in the project.

Face to face contact is the best indicator to determine a VAR’s “fit” with you company culture. If they don’t feel right during the initial meetings, you probably won’t like them at all once the implementation starts, especially if things start to “heat up” a bit.

Finding the VAR that you’re comfortable with, is very important so don’t shortcut this.

Conclusion

Proper planning and preparation can positively impact the VAR selection process. Considering the best practices presented and avoiding the pitfalls described can help ensure a successful VAR selection process.