Implementers and VARs and OEMs (Oh My!)

When selecting a new ERP system, much of the selection process tends to be focused on the software product. And while the product you choose is certainly important, the success of any ERP project hinges on the implementation.

Implementation simply refers to the professional services necessary to get you fully up and running with the ERP software you’ve selected. These services can include:

  • Requirements Gathering
  • Business Process Mapping
  • ETL (Data Extraction, Transformation, and Loading)
  • Configuration
  • Training
  • Change Management
  • Integration

There are a variety of different business models for software implementation, each with their own pros and cons. In this article, we’ll walk through them and review some of the positives and negatives of each approach.

Implementation Partners

Under the Implementation Partner model, the software is sold to the customer directly by the software vendor, and implementation services are provided by a 3rd-party business.

At Bizowie, we use the implementation partner model, because we feel it provides the best possible value to our customers. Some of the advantages of working with an implementation partner include:

  • Customers have a direct business relationship with both the software vendor and the implementer. This means that both parties are incentivized to provide an excellent experience for the customer.
  • Additional service options are available beyond just those connected to the ERP product. In many cases, ERP implementation may entail needs beyond those connected directly to the ERP. For instance, an e-commerce system may need to be upgraded or reconfigured, or IT/network hardware may need to be purchased and installed to accomodate the new system. Implementation partners are often able to provide additional value-add services that ISVs and some resellers cannot.

However, not all implementation partners are equal. You should carefully vet the implementation partner you’re working with to ensure they’re a great fit for your project, asking questions like:

  • What is your experience with the ERP product you’ll be implementing? Have you successfully implemented it before? Have you implemented other products, and if so, how does it compare to those products?
  • Who will be working on our project? Are they experienced with the ERP product? Are they based in our country or offshore?
  • Is your team well versed in both the technical and non-technical (business process, accounting) side of implementation? Both are very important to the success of an ERP project.

VARs (Value-Add Resellers)

Under the Value-Add Reseller (VAR) model, the software is purchased at wholesale prices by a reseller, who resells it to customers and also provides implementation services.

Working with a VAR can simplify the ERP purchasing process, because you only need to work with a single vendor, who provides both the software and implementation. However, this can be a risky choice, because you only have a business relationship with the VAR. If your relationship with the VAR goes south, the software vendor has little incentive to help you, since you are just an end-user and not their customer.

When vetting a VAR, good questions to ask include:

  • What incentive does the software vendor have to make sure the software is a perfect fit for our business?
  • Will custom programming be required to meet our needs?
  • What will our costs look like when it’s time to upgrade, and how will any customizations play into these costs?
  • If we want to work with a different VAR down the road, is it easy to “port” our data to another VAR who supports and implements the same product?
  • Who will host the software? Will our data be housed in secure data centers? Is there redundancy across multiple data centers and geographic regions?

OEM Implementation

Under the OEM Implementation model, the software is sold to the customer directly by the software vendor, who also provides the implementation services.

As with VARs, an OEM implementation simplifies the purchasing process, since only one vendor is involved. Additionally, less vetting is required, since one can assume that the creator of the software will always be very knowledgable about their own product.

However, an OEM-led implementation often still requires 3rd-party involvement. Software OEMs generally are not able to support software or hardware other than their own, but the scope of implementations almost always involves more moving parts than just the ERP system.

Additionally, software OEMs generally do not have the same level of professional services “firepower” as a dedicated consultancy, who can often provide business process mapping, accounting advice, data transformation, and a business-oriented (versus technical) approach to implementation.

If you’re looking at an OEM-implemented product, consider these questions:

  • Who will be working on our project? Are they located in country or overseas? What are their credentials/background and will we have a well-rounded experience from a technical and business perspective?
  • Will you be able to provide value-add consulting or support for other technology that plays a part in our overall ERP strategy, but is not part of the ERP product? (e-commerce, hardware, BI or data warehouse systems, etc.)
  • If not, do you have partners you’d recommend for these services? Are they experienced with your product?