VAR Power: An SMB's Best Friend

By Lauren Simonds | Posted April 05, 2006

If you're driving down the highway and your car suddenly breaks down, do you pull over, grab the toolbox out of the trunk and crawl under the hood to make a repair? Not likely. Chances are you pull out your cell phone and call a tow truck to haul the vehicle to the nearest garage. Because smart as you are, you probably don't know your camshaft from your catalytic converter, and your car will be in much better hands with a trained automotive professional.

The same truth applies when it comes to small business and technology. If, for example, you need network storage, you face a daunting challenge. And as smart as you are, you probably don't know your NAS from your SAN. When it comes to technology, a local solution provider — also known as a value-added reseller, or VAR — is the trained professional you need to select and install the right hardware and software systems.

Breaking Down the Challenge
A recent survey conducted by the Yankee Group found that the biggest challenge for more than 50 percent of small business managers with 20 to 99 employees is integrating the various stand-alone applications and systems that they own. More than 40 percent worry that inadequate IT resources keep them from using technology to meet their customer needs.

Steve Hilton, the director of small business strategy at the Yankee Group, says that fear is a big hurdle, but help is available. "Small businesses typically don't have the talent within their company to identify, acquire and implement the technology they need," he said. "There's a lot of fear because they've all heard horror stories of companies spending a lot of money without being able to get the technology online. But local VARs are in a position to overcome these issues."

Even companies that do have someone on staff to handle IT issues can run into trouble, according to Russell Morgan, president of the non-profit Information Technology Solutions Providers Alliance (ITSPA). "The lone IT staffer is typically a generalist and doesn't have the skills to handle a wide variety of tech issues. If you need to integrate your Web site with your accounting program, it's a daunting prospect, and most small businesses can't afford or can't find people with the right mix of skills."

The big tech companies — Microsoft, Dell, HP and others — spend a tremendous amount of time and money promoting their individual products. But Morgan says that for small business, the integration of those products happens at the local level. He says small businesses should look to local VARs when they need to bring technology into their business.

"Independent technology consultants are readily available, trained to evaluate and implement solutions that minimize disruption, reduce system fragility and deliver systems that streamline operations and improve productivity," says Morgan.

Given how much money small businesses spend on technology, it makes perfect sense to protect that investment by working with a VAR. According to the Yankee Group survey, small businesses with 20-to-99 employees spend about $70,000 per year on IT. Companies with two-to-19 employees spend $16,000 a year.

A VAR's technical training and expertise can help small businesses improve the products and service they offer their customers and mitigate the fear of technology turning into a bottomless money pit. "When you need tax advice, you go to an accountant. When you need legal advice. you find a lawyer. When small business owners need technical advice, they should turn to a local VAR," says Morgan.

Pick a VAR, But Not Just Any VAR
Now that you're sold on the idea of a local VAR, you'll need to find one that's right for you. Here are a few ITSPA-recommended tips to help.

  • Get recommendations: Talk with colleagues, friends and family. Check with peers within your industry or call your local chamber of commerce
  • Check major manufacturers: The Web sites of companies such as Microsoft, Dell, HP and Intel usually list local certified partners
  • Contact ITSPA: They can help match customers with providers
  • Ask for references: Ask each VAR for two or three clients for whom they've done similar work. Ask the client if the work was done on time, on budget and whether it met expectations

Once you've narrowed the field to a few potential candidates, interview them to determine which company best suits the way you work. Here are a few essential tips on what a VAR should provide:

  • A proposal that describes the economic benefit (i.e., a cost analysis that includes the ROI)
  • An upfront assessment plan outlining the current state of your company's technology and a road map that details what will be accomplished
  • The proposal, assessment and road map should be written in business terms — not in technical jargon-ese

Morgan and Hilton both emphasize that last point about business language. The best VARs can discuss your technical needs in business terms such as inventory and cash flow. Don't settle for a VAR that doesn't. "If they can't give you the cost/benefit analysis in plain business language, then they aren't the right VAR for you," says Morgan.

Lauren Simonds is the managing editor of SmallBusinessComputing.com

Do you have a comment or question about this article or other small business topics in general? Speak out in the SmallBusinessComputing.com Forums. Join the discussion today!


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