There are problems in the implementation. VAR engagements typically involve a timeline of waypoints and deliverables, so missed obligations are frequently the first sign of potential trouble. "A good warning sign that something is not correct with a VAR is that agreed upon timelines and deliverables are being missed," says Greg Schulz, founder and senior analyst at Storage IO.
The VAR doesn't help you solve problems. A VAR should take ownership of their own solution, including the software, hardware and other products that they provide. This means a VAR should be expected to invest sweat equity in their work rather than "finger pointing" or deferring service and support back to an OEM. "If they're not putting themselves in the middle of helping you solve the problem, then you could have just bought from the OEMs directly," says William Peldzus,
The VAR becomes an order-taker. A good VAR is proactive in their dealings with a customer after the sale -- diligently working to maintain or improve relationships with their active clients. A VAR that consistently sits back and waits for your call may be cause for concern. "If the VAR just becomes an order taker, that's a warning sign that they're not really investing in the relationship," says Peldzus. Although this certainly does not guarantee that there is a problem, it can foreshadow risk factors such as inadequate staffing or other internal problems at the VAR.
The VAR "disappears" entirely. A lack of communication can also be taken to extremes. "The VAR disappears, does not respond to calls or emails or is not seen even when there is another deal on the table," Schulz says. A VAR that is unreachable or unresponsive may suggest a much more serious problem -- this often signals the end of a relationship with a VAR.
There is high personnel turnover. Excessive or chronic turnover may be another warning sign to consider. "A lot of the value-add is the 'people part' of the relationship," Peldzus says. "For example, you're getting a new contact every four or five months or the 'techies' that you really liked working with have all moved on." This may be a sign that the VAR is consolidating (shedding personnel) in response to declining business conditions or faces other internal management problems that are causing excessive turnover.
The VAR pushes a limited portfolio. A VAR that routinely suggests the use of their manufacturer's product -- even when that product may not be the correct fit for your needs -- may not be the best supplier to work with. A good VAR should be willing to tell you when they don't carry the best solution for you. "If you get a VAR that says 'the only/best solution is what we have in our portfolio', chances are that they don't have your best interests in mind," Peldzus says.
Don't forget periodic reviews. Above all, review the performance of your VARs periodically just as you would review the work of any employee. Evaluate the results of past and ongoing work, and determine the state of your relationships. "Do I really feel that this VAR comes in and puts my company's badge on and really is looking out for my best interests?" Peldzus says. "If they're not, what's really the benefit?" ***
This was first published in October 2006