Should you purchase a Payroll HR system from a value added reseller, VAR?

Many software companies offer sales, consulting and training services for their HR systems or combined Payroll and HR systems through other independent companies, called business partners or value added resellers, a.k.a. VAR’s. The question addressed with this article is are you better off to work directly with the product vendor or work with one of their partners? The answer, just like most things, depends.

I might come across as a little biased with this article since I actually worked as an HR information system (HRIS) business partner for ten years but I will try my best to be objective. Realize that with all of the advantages I point out for working with both, it all depends on how skilled the vendor is versus how skilled the VAR is. This determination you will need to make based on replies from references and the number of years experience the VAR has.

Benefits of working with a VAR
• Localized system support and services
• VAR may offer multiple products
• The partner may, in fact, have more experience than the vendor offers
• VAR may offer add on products or services not offered by vendor

Localized support and services is one of the reasons HRIS Payroll vendors work with business partners. The advantages from local support for the customer are obvious. I have, for example, a couple of clients located within a thirty minute drive from my house. With the ability to link into someone’s computer or provide training over the web, there are many services that had to be provided onsite that can now be offered over the web. There are, however, still times when there is no substitute for someone actually arriving on-site to address your issues. Over the years I found, for whatever reason, that I discover far more while on-site than working remotely. Thus, I believe I offer clients improved service by being on-site. The additional obvious benefit of localized support is that when on-site training or services are required, the cost of travel is likely far less than working directly with the vendor, unless they are located in your vicinity.

Many VAR’s now offer multiple products. The advantage during the sales cycle is that the VAR is able to review your needs for a system and make a recommendation of which vendor's product provides the closest match to your determined needs.

As stated previously, VAR’s, or Business Partners, are independent businesses that sell and support other HR and payroll systems. Many times these partners have been in business for a longer time than most, if not all, of the employees working directly for the vendor. We offer one product by a VAR on this site. Dresser and Associates has been working with the Sage HRMS product for over twenty years. Obviously, the experience they have obtained with that system is going to be superior to that of anyone working directly for Sage directly. Those that work directly for the vendor may have been fired, promoted, or left the company. And technical support departments or consulting staffs typically have some of the highest turnover rates in a software company.

The last benefit I would like to mention when working with a partner is that often times they are more familiar with other third party products or may have created their own to enhance the Payroll or HR vendor’s application. For example, my company created several custom interfaces for specific industries we worked with. The vendors did not offer the same.

 Questions to ask before working with a HRIS Payroll system VAR
• How long have they been in business with the HRIS system you are considering?
• How many implementations has the vendor performed and exactly how many has the individual, who will be setting up your system, performed?

These two questions determine the “depends” caveat I referred to earlier. If the VAR has just started working with this software company, you might want to consider working directly with the HR vendor. If they are brand new to the HR information system, they may be certified but unless they have a number of implementations under their belt, they won’t be as skilled as someone working directly for the vendor who may have greater experience. Don’t automatically assume the consultant employed by the vendor is going to be experienced; everyone has to perform their first install. Just don’t let the first one be you. Ask questions about the actual person who will perform your implementation to make sure. If they just became a VAR for the payroll HRIS application, they may or may not end up still working for that vendor a year down the road.  So the benefit of localized support may be tossed out the window. When it comes to implementing any software application, but especially Payroll HRIS systems, experience is the greatest teacher. In short, make your decision primarily based on who, of the vendor and the VAR, has the most experience.

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About the Author

Clay Scroggin worked in the Human Resource and Payroll Software Industry for more than fifteen years. During that time, Clay, and those who worked with him, have assisted hundreds of HR professionals with their HR software needs. In 2007, Clay began working on, a site dedicated to assisting HR professionals with their search, selection, implementation and use of HR systems. The site contains several tools to assist HR professionals with their software research including a HRIS/HRMS Software Selection Tool.

Be Sure to download our Free HRIS Buyers Guide which provides a detailed ten step approach to selecting HR Software.