There are key aspects of an accounting and ERP VAR’s business dynamics that are – it is safe to say -- drastically different from even five years ago and a decreasing few like former Tectura chief executive and founder Terry Petrzelka have the full perspective on how the profession has changed.
Petrzelka, now a management consultant and advisor, took the time to answer some pertinent questions regarding how today’s VARs differ from those at the beginning of the profession’s lifecycle, or even just a few years ago and – more importantly – how they can and need to progress to remain in business.
AT: What has changed most about the consulting/reseller profession over the past 10 years and why?
Petrzelka: I believe the pendulum started to change direction with the emergence of cloud technology as a service, the reliance on the Internet for whatever anyone wants to find out or research, and the acceptability of customers to trust and use cloud services – this has ushered in a major new player in the game, what I would call the New Guard.
People like myself/my generation who are set in their ways of working, thinking and solving issues normally worked in the areas of marketing and sales in what I would call the traditional methods and we expected technology partners [publishers] to partner and work together as we always worked together.
Today, products are being bought differently with the emergence of a more sophisticated, more prepared customer fostered by the New Guard of technology social-oriented buyers, their whole approach in choosing a business partner and business solution is totally changed in more and more cases each and every day. This change in the life of the reseller profession and how to become relevant to this new way of selecting a business partner is to me the most dramatic change that has occurred in the consulting/reseller and it’s only just begun.
In the past, prospects/future clients used to worry if a partner had the resources to meet their timelines. The paradigm was more about having the people with some understanding of the prospect’s business or had referrals from a prospect’s contacts that stated the partner had great success in doing new projects for them or minimized the downtime for doing upgrades.
These days, social networks are starting to overrun the older processes that existed even just a few months ago. Prospects still desire and want a partner who understands their industry, but they also want fresh ideas, not just best practices, and they find the evidence and validation they need through social networks. This is the new dynamic and it’s totally different even from just a few months ago. It’s the New Way of doing things ushered in by the New Guard.
AT: How should consultants/reseller partners be preparing for the next 10 years, or even the next few?
Petrzelka: A reseller/channel partner cannot depend on publisher software margins anymore. Firms need to find a means to create recurring revenue streams, focus on what they can do, partner where additional services are needed, and put all attention to their existing base to deliver these services in a way that positively impacts those clients. Mining the existing base of clients to develop repeatable, affordable, unique high-value services is what it is all about.
The ability to deliver varied services to your client base is also an on-going challenge because all firms cannot afford the cost of developing the expertise to deliver the multiple services that a client needs for their business so, partnering with other firms is key here; building trusted alliances is an approach to deal with this service delivery issue.
Another great method to deliver a varied, effective set of value-added services is through a program like Microsoft’s Master VAR Program. The inherent feature of the Master VAR program, depending on the sophistication of the Master VAR’s approach in managing, operating the network provides the Master VAR with the skills, expertise, service offerings of all partners who are part of the network to make a significant difference with each client whose partner is a member of the Master VAR’s network.
Whether you form an alliance, join an existing, authorized partner alliance or join a network like the Microsoft Master VAR program, this is paramount for all partners unless you are one of the few successful enterprise system integrators of today or those that are trying to be, this must be top of mind for all firms over the next 10 years.
AT: Where have accounting/ERP vendors failed or not done enough in channel relations + where do they excel?
Petrzelka: Publishers are dealing with more competitors with major new ERP solutions and are focusing more of their attention to their internal business issues rather than investing in the other part of their business model – the channel partner. Over the past three to four years, the publishers have put channel partners in the position of having to go on their own more and more in the area of marketing which means more investment.
At the same time, publishers are demanding more and more certification requirements, which means additional investments by the channel partner. And then, to top it all off, publishers are raising the bar on what is required for channel partners to maintain their current software margins levels only which a few have been successful in doing.
In order to generate leads today a partner has to do more than email blasts, trade shows, and the like. But new methods of lead generation are not cheap; it takes a major new investment in people, tools, and techniques.
Publishers need to offer transitional support to assist the channel partner to re-tool their marketing strategies and efforts to generate leads to help them get found. Instead, they are letting the partners deal with this issue themselves.
Even if a partner has the investment dollars to market, my guess is that 80 percent of the channel partners still need the mentoring, coaching, training and guidance.
My question is if the publisher had chosen to hire employees to perform these roles, I am sure that they would give their employees what they need in training, support, guidance, management, and research in order to make them successful in their roles and in return the company would be successful as well. So why should the publisher act any different than they would with an employee when dealing with the channel? Why not give the channel partner the training, the tools, etc.?
Again, as I stated earlier, lately publishers have either raised the bar to keep the same margins or reduced them with the net effect that the channel has to invest more in marketing. To me, the publisher who assists their channel to retool will be the winner in the ERP solution battle of the future.
