Interviews with Dynamics GP VARs – Entrepreneurial Challenges and How to Beat Them

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Believe me when I say that I understand from first-hand experience the challenges that come with operating an ISV in the Dynamics space. So to understand our customers better I set out to hear their own experiences with installation and operation.

Lee Sherwood of Sherwood Systems started his steel fabrication firm in 1979, naming it the Sherwood Manufacturing Company.  As his business started to grow he looked at various computerized management systems. During his search, he met a developer and it was suggested they could create a new accounting package using a database called Informix and an accounting package from the software firm FourGen.

As the development of this bundled package progressed, fully equipped with new install knowledge and a base product, Sherwood now had a resalable item. Sherwood was then able to establish Sherwood Systems as an accounting and business systems reseller. Sherwood was soon recruited to be a Great Plains VAR and sell the Dynamics GP product due to their skill sets working with large clients and a Relational Database.

Sherwood Systems General Manager, Pauline Zorz, has been through the journey from a small start up to a firm that has been recognized nationally many times for their work and their customers.

“I often compare us to the tortoise and the hare fable. We aren’t the fastest at growth or the first to embrace all the suggested avenues our channel would like to mandate, however we make it to the finish line many times over where others don’t even get close,” says Zorz, “The evolution from Great Plains to Microsoft and their channel gave us a big advantage over new partners due to our skill sets with relational databases and customer development tools. We were much more self-sufficient than other firms. We have no debt and thus have more flexibility than firms that deal with cash flow issues or huge payrolls. Our carefully planned growth has given us a tactical advantage which I believe allows us to remain a solid success. When the economy took a big dip many firms had to cut costs and lay off good portions of their staff.  We didn’t have that problem and I am proud to say we weathered that experience with very little impact.”

“Great Plains selling to Microsoft and the policy changes within the channel have been far more difficult. We should all appreciate the rules and pressure to do things a certain way in any channel environment – but when it’s all said and done we answer to our customers and our team and we do what they need. We never put these needs aside simply to meet what our channel initiatives may be at the time. Our wisdom and our commitment to the customers’ needs first have been our guiding principal.”

Zorz continues about how market forces have been their biggest challenge.

“As ERP Systems continue to become commodity items, prices have dropped dramatically and we have watched our margins being cut by 50%, it is much more difficult to operate a business. Think about the impact on things such as cash flow, salesperson compensation, consulting ratios, and consulting hourly fees. We have had to look at creative ways to engage the customer more often and deliver greater value in a decreasing dollar market. These changes have been our biggest business challenge.”

When asked what the greatest reward has been from working in the reseller business, Zorz was fully equipped with her answer.

“We watched as Arizona was named a highly in-demand market and many larger national firms flooded the market with new offices and new people and made wild claims they could not deliver on. Most of these partners had no accounting product background yet could sell our products, and most had no clue what was involved. They treated the sale the same as selling an off the shelf word processing package. As they failed, many customers became disheartened and we became a landing base for many orphan customers. These orphans are now some of our most loyal clients”, says Zorz, “Being referred to as a solidly respected partner has been a really gratifying reward.”

With rumors still swirling about the possible discontinuation of Dynamics GP, Zorz stands still in her confidence, citing revenue stream as a reason for its continued lifeline.

“We have heard these rumors countless times and they just don’t ring true. If you look at the revenue stream of Dynamics GP say versus Dynamics AX, Microsoft can’t afford to drop the product. I am sure the product will continue to evolve. In fact I read just today about the new update release schedule that will deliver enhancements to GP almost monthly. Does that sound like a plan to kill a product?”

With Dynamics AX being prepped and marketed as the product of the future, it’s hard to say if resellers like Zorz and Sherwood Systems will push forward in gearing efforts toward that market.

“Someday, maybe, but not at this point. You have to understand that AX is a completely different product for a different market and implementation methodology. GP typically is a great fit for firms in the 5 -100 million dollar revenue range, with a great deal of off-the-shelf functionality and rapid implementation discussed in terms of weeks. AX is a custom deployment type product for larger firms or companies with large numbers of divisions or international locations. Implementations for AX are outlined in terms of months. That is a huge cost and complexity difference.”

“The Cloud is more costly if all you do is run the numbers and most firms simply look at the total costs over time. Now we can talk about all the advantages with respect to lower capital outlay, better security and backup, and lower deployment costs, plus upgrade savings, but the mindset to validate these tends to be embraced more by younger entrepreneurial types. Like everything we do, we ask a lot of questions; we listen, learn and then advise our customers based on our experience. No one solution is best for everyone and no matter how many times I see this in marketing pieces, time has proven us right.”

That’s the deal with being a VAR in the Dynamics space – it’s all relative. But you can narrow down your search by talking to the right people who’ve been in the right space all along.

About The Author:  Curt Finch is the CEO of Journyx, a Certified Microsoft Partner. Journyx maximizes the value of Microsoft Dynamics by adding enterprise time tracking. Journyx Accountlink for Microsoft Dynamics allows companies to quickly implement a complete time tracking solution using existing business data in Dynamics. Connect with Curt on Google+.

by Journyx

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