When the going get tough, the tough get better. And while it’s not the worst of times in accounting software reselling, it’s not the best of times either.
Like what you see? Click here to sign up for Accounting Today's daily newsletter to get the latest news and behind the scenes commentary you won't find anywhere else.
Selling financial software has gotten harder as the market has become saturated. The economy hasn’t seriously hurt the business yet, but it’s certainly not helping as sales cycles slow down.
Many resellers are selling more sophisticated systems. Increasingly, the smart ones are offering infrastructure services, and customer relationship management applications are contributed to the top lines everywhere.
But the attributes needed to be named as a Killer VAR go beyond product. They include the commitment and character of the people running value-added reselling organizations.
From technology savvy to great marketing to providing a nurturing environment to out-servicing the competition, these organizations have found the secrets to success.
Which really aren’t so secret, anyway.
UNDERSTANDING CLIENTS’ NEEDS
Like many firms, the SBS Group has difficulty finding qualified staff. Unlike many software resellers, however, the company has an intern program.
But beyond simply looking for interns with spark, CEO Jim Bowman and his staff put the interns to work gathering information about client needs
“We undertake a market research project at least twice a year to gather information about what’s important to clients who are seeking new accounting systems,” says Bowman. And most of the work is conducted by the interns via telephone and email surveys.
With several hundred prospects and clients surveyed, SBS is often surprised at what the end-user wants. And it’s often different than what resellers believe, Bowman explains.
“A perfect example is that traditionally case studies have focused on ROI. The customer cut $500,000 of cost. Most customers don’t identify with that,” he says. “They are more likely to respond if you show them case a study where the software helped them enter a new market or provide a new product or service.”
Understanding client needs has been a key to the operations of the company, which was named Dynamics SL Partner of the Year for 2007. Bowman says that “a commitment to deliver a total solution even when that includes total components outside of Dynamics SL
SBS operates from Baltimore to Fairfield County, Conn., and from Montauk, L.I., to Harrisburg, Pa. Within that area, it serves a number of financial services companies, primarily private equity firms, asset managers and portfolio fund companies.
The company also has markets in life science, tapping into the large number of pharmaceutical, biomedical and research organizations in New Jersey. Other markets include construction manufacturing, professional services and wholesale distribution.
There is also an active SharePoint and network infrastructure business. The latter is very important since a “fair amount of customers want one throat to choke,” Bowman says. “They don’t want to get into a contest between their hardware guys and their software guys. As solutions like SL and GP incorporate more features of the underlying stack, just to install and support GP and SL requires a fair amount of network knowledge.”
The three-year old college intern program, by the way, has shown results. About two to four interns are brought into the market or programming and development groups—not into client-facing departments.
Besides providing extra hands, “it gives us an ability to look for that rare piece of gold, that one kid who has an affinity for our business and who can turn into an excellent employee,” Bowman says. “We have two interns we actually are converting into employees.”
—Robert W. Scott
USING TECHNOLOGY KNOW-HOW
The Central Consulting Group is about a lot more than just selling the Deltek Vision line to a target market of architectural and engineering firms.
“We approach installations from a very solutions-oriented perspective,” says Jim Falkanger, one of the three partners who founded the St. Paul, Minn.-based organization seven years ago. “It’s not just sale of the product, it is implementation, planning and training as well as beta conversion and go live conversion. Our model has been a model of selling the software and working with the client to plan the implementation which will than include training.”
The three, Falkanger, John Nelson and Steve Stoltz, have backgrounds in handling deployments of business management software and computer hardware systems from JD Edwards and Hewlett-Packard.
In fact, the three were building their own project accounting system when they heard about Deltek. They decided to halt their own development and resell Deltek.
However, Falkanger and his partners applied their expertise in writing several custom applications for extending Deltek Vision’s value by making it integrate with back-end systems, such as human resources applications such as Ceridian, used by CCG’s clients.
Other than Falkanger’s having taken a few accounting courses in college, the partners had highly technical educations. Stoltz was an electronic engineer. Falkanger has a master in computer science. Those backgrounds have shaped CCG’s approach.
“We have always been about the process of looking at a total solution,” Falkanger says. Besides using the technical background to write utilities and integrate applications, the team also makes sure systems work before clients begin using them daily.
“We have even added mock go-lives where we facilitate a simulated go live with the intent that we want to test the staff,” he says. “It’s one thing to have consultants observe them. It’s another to have to process invoices and time cards.”
The company, which had $4.5 million in revenue in 2007 received the Deltek Partner New Business Award and Deltek Performance Level Award when the vendor gave out its first channel awards this year. CCG has offices in Dallas and St. Paul, along with sales offices in Boston and consulting offices in several other cities.
Falkanger says his company “prepares “client data to better work with Deltek,” Falkanger says. CCG helps clients to customize their view of project management data including time and materials, accounts-payable and receivable, and updates on client fees paid as fixed fees or as a percent of a project’s estimated final cost.
Although CCG provides training, the educational needs of clients differ from those for users, such as manufacturers, who buy general accounting software and usually have a good deal of turnover.
After the initial training, most A&E firms do not need more instruction according to Falkanger. He continued, “there are many clients who have the same controller and bookkeeper for 10 to 15 years. They don’t need remedial training, unless they hire someone new or choose to active a new feature.”
CLOSING THE VALUE GAP
There are few things in the business of selling financial applications that are more important to Todd Fitzwater of Demand Solutions Group than closing the value gap.
The gap is the difference between what software purchasers expect from their accounting software applications and how those programs actually perform.
“The value gap can be closed in a number of ways—throw out the application and get a new one or hire someone like us to close it and you’re going through and open and close routine versus constantly measuring where the value gap is and making micro-adjustments to keep that gap closed,” explains Fitzwater, who once implemented enterprise products such as Oracle and SAP at Fortune 500 companies for whom he also helped establish strategic business policies relating to their technology investments.
That systematic approach shows in DSG’s methods for preventing such gaps within the business of its prospects and clients, whose organizations typically have less than $50 million in annual revenue. Of his roughly 56 customers, the majority are high-tech firms with 25 to 30 seats on average.
Demand Solutions Group meets with customers to help them assess which types of on-demand applications they need and which ones they don’t, providing them with a DSG Roadmap. If users become frustrated because their businesses are changing and the software no longer meets their initial needs, the dealer tunes it to meet their new needs, a process called DSG Revitalize. Then, Fitzwater’s organization keeps in touch with customers to make sure this fine-tuning continues, a process called DSG Optimize.
Regardless of their size, Demand Solutions Group’s motto is “Your success is our contract.” There’s no commitment, if the customers aren’t happy they can leave anytime.
Founded in 2005, Demand Solutions Group is headquartered in Los Gatos but whose 20 employees mostly work throughout the country through virtual offices, has been one of NetSuite’s top four resellers for the past three years, with revenue climbing from roughly $1.1 million in 2006 to $2.4 million in 2007, and Fitzwater projects roughly $3.5 million for 2008.