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Accounting

The Case for Becoming a VAR

Column: The QuickBooks Advisor

From the June 2009 Issue

For small and medium-sized businesses, it’s one thing to have a well
functioning GL system, but it’s a huge jump beyond that to have a complete
business management system that tracks and manages all of the key business processes
in the business. For example, even if your clients have a smooth-running accounting
system for AP, AR and Payroll, when you really think about the requirements
for efficiently tracking and managing purchasing, inventory, forecasting, CRM,
time and project management, document management, and web store, you quickly
realize that without customized, integrated solutions in these areas, the overall
efficiency of the operation still has BIG needs.

Fortunately, there are companies out there to help you as you try to create
the most efficient business processes for your clients. Over the years, these
vertical solution companies have morphed from “all-in-one” system
providers to what I call “add-on” developers. By add-on, I don’t
mean to imply that these applications are “small,” but rather that
vertical solution developers are focusing more on integrating with products
like QuickBooks to share data instead of building GL capabilities into their
products.

I first wrote about this opportunity two years ago, but recent developments
in the market give us more solutions, better integration and broader consulting
opportunities. This is great news for those of us who focus on helping small
business clients with their accounting systems because it gives us tons of opportunities
to expand the practice from accounting software into other value-added services.

Before discussing how you can exploit the new opportunities to become a Value
Added Reseller (VAR), let’s first look at the technology and market developments
that have given rise to these new opportunities.

The Internet has now reached critical mass. For years, I’ve
been talking to accountants and their clients about moving many business-critical
systems to the Internet, but recently the logjam seems to have broken. With
near-ubiquitous availability of the Internet, we can pretty much assume that
everyone has fast, always-available Internet access.

Accounting software is now “open” to third-party developers.
Since 2002, when Intuit opened up QuickBooks with its SDK (Software
Developer’s Kit) which allows third-party developers to read and write
data to the QuickBooks database, there has been a steady flow of new solutions
that are now reaching maturity. And since QuickBooks has become a “platform”
for other applications, many other vendors are following suit. For example,
both Sage and Microsoft have open platforms with Peachtree and Office Accounting.
So while the mid-range software market has always been more open as far as add-on
integration is concerned, this new development in the low-end is finally beginning
to pay dividends in the broad low-to-middle market.

Several mature, vertically focused software companies have begun targeting
the small business world, specifically the QuickBooks market.
This
includes companies like Business Objects (Crystal Reports), MISys (SBM), Alterity
(Acctivate), Salesforce.com, eBay, Yahoo!, Google, Sage (ACT! and Timeslips),
Bill.com, PayCycle, SmartVault, BQE Software, and several others. What’s
interesting here is that since these companies have developed links to QuickBooks,
the whole ecosystem of QuickBooks add-ons has benefited. For example, the very
existence of a QuickBooks link in Crystal Reports gives rise to a whole submarket
for end-user customers, consultants, custom developers and even other commercial
software companies.

Consultants (specifically QuickBooks consultants) and tax and accounting
firms who either employ them or refer clients to them, have started to fully
embrace the idea of recommending and installing add-ons to solve many of the
previously unsolvable client problems.
Many have begun specializing
in add-on integrations such as QuickBooks Point of Sale, BillQuick, Fishbowl,
Results CRM, MISys SBM, and others. In addition to these, there are many more
REAL applications that solve REAL customer problems and yet still allow the
client to keep their QuickBooks installation in place. This is a compelling
story for the experienced QuickBooks consultant because it allows that person
to expand on existing skills while maintaining an advantage over other consultants
for whom QuickBooks expertise is lacking.

Re-engagement with the existing client base. With more integration
options from which to choose, many consultants are going back through their
client base and initiating new projects to tackle problems around advanced inventory
management, CRM, POS, mobile solutions or advanced construction management.
In addition, these new technology options allow consultants to engage new, larger
clients with a broader set of needs than was characteristic of the typical QuickBooks
client a few years ago.

So with all these developments, the opportunities are getting more interesting
every day. Do you see the similarity to how past markets thrived after the critical
foundation technologies were in place? For example, imagine how difficult it
would have been for Google or eBay to even exist without the Internet first
becoming available. But once that foundation technology was available, literally
thousands of companies were formed and thrived by harnessing the technology.

It’s essentially the same type of thing going on here with the new “open”
software marketplace where applications talk to each other. That foundation
makes so many solutions possible, and many of the “solutions” are
more about integrating multiple systems than they are about installing any particular
product. And this integration requires business process expertise from consultants
who make a living by studying and implementing technologies.

At the same time these technology foundations form, the typical QuickBooks
consultant is finding a whole new type of client. One that doesn’t flinch
at spending thousands of dollars for their business management system, and one
that has no problem assigning in-house technical experts to assist the outside
consultant with the planning, design, implementation and even support of the
system after it’s installed. This is a new phenomenon for the numerous
QuickBooks consultants, and many are jumping at the new opportunities to become
VARs for these new software solutions.

The question is whether this new world is right for your firm. To help you
answer this question, consider that there are essentially two types of consultants
in the small business consulting community. Some are focused techies/accountants
who love working directly with clients to install/setup/troubleshoot/etc. the
general ledger and add-on solutions. They continually school themselves on new
techniques, technologies, software solutions, customized solutions and business
process design. These are the top technicians when it comes to designing and
installing the most streamlined business processes. I estimate that about 70
percent of The Sleeter Group’s Consultant Network members would fit this
general description, and our network of over 600 members represents a good cross-section
of the most serious QuickBooks consultants in the United States and Canada.

The other 30 percent are focused more on attracting new clients, selling complete
systems and bringing teams together to solve a broad range of business process
issues in the mid-range market. They are generally less technically focused,
but often have teams of IT professionals, accounting/tax experts and other software
experts with specific skills in QuickBooks, add-ons, industry-specific solutions
and custom software development.

These people are exactly the ones who can take full advantage of these new
opportunities. If this is you, consider becoming a VAR for a few best-of-breed
add-on solutions and foster close relationships with vendors who can feed leads
to you and help you qualify, sell, install and support their solution.

However, before you jump into the VAR world, first consider what type of firm
you are or what type of firm you want to build. If you want to build the “best
QuickBooks techies” firm, then becoming a VAR might not work well for
you. The reason is that vendors want their VARs to SELL their software, and
you’re not likely to have the best sales skills if you focus your business
totally on the technical side. However, if you want to build sales, marketing,
departmentalized technical skills in QuickBooks, add-ons, custom development,
business process design, business consulting, etc., then finding a good VAR
relationship may be a great fit for you.

Feel free to reach out to The Sleeter Group or any of our consultants if you
need someone to help you think through how best to take advantage of these new
opportunities.

 

See inside June 2009 issue

RFP — Is the Cookie-Cutter ‘Request For Proposals’ Still Relevant?

Column: Real Clients, Real Stories

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