December 4, 2023


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The VAR 100: Lifelines in a world gone mad

What a year. As retailers, restaurants and countless other businesses closed down, technology resellers were not just open, but scrambling to keep up with demand around cloud services. Business was good for the VAR 100 in 2020, but it was more than that — they provided essential lifelines to clients that wouldn’t have made it through without their accountant and technology partners.

First, and most obviously, cloud technology was suddenly a necessity instead of a suggestion. The VARs on our list this year hired staff to keep up with demand in cloud implementations. Cloud implementation created pathways to more business: Now clients needed strategy. Data analytics, forecasting capabilities and more became indispensable tools for companies figuring out how to hold on until the worst passed.

It also led to some VARs expanding into new verticals, like the life sciences, a business area that was also thriving during the public health crisis, and e-commerce, as retailers and restaurants nationwide needed to move their operations online.

But it was not all opportunity and big wins. Some VARs made the difficult decision not to “trim the fat” and cut employees when business was uncertain. But that paid off in 2021, as things get back to normal and business is back up. Retaining staff was one of the best decisions DWSi made last year, for instance, allowing it to ride the tech adoption momentum of last year without missing a beat.

VARs were the unsung heroes of 2020, making sure clients got online and survived the pandemic in a way that would let them pick back up again in 2021 and keep going.

No more talk about the cloud?

There is no question that last year was a special year for cloud technology. For years, the accounting profession has straddled the line between cloud and on-premise software, with some firms helping clients who are resistant to change, and others serving clients who are very future-ready. The pandemic pushed everyone to embrace the cloud very quickly, but 2021 is a year of walking a different line: figuring out how to keep up the momentum of cloud adoption and use, and not let it lag as things get “back to normal.”

“The pandemic was not a one-off,” said Alex Solomon, co-president of Net at Work. “Today it’s a pandemic, 10 years ago it’s a recession, before that it’s Y2K, and now the urgent need is cybersecurity. You need to get ahead of it, and you need to have a partner that understands technology and embraces it.”

Solomon went on to explain that the pandemic was like an “artificial recession” — the finance and business repercussions weren’t due to a weak market, but to a completely unrelated event. Because of that, businesses are bouncing back quickly as normalcy returns, and they are raring to gain back time lost last year. “Because of that, I don’t think we’re going to backslide on tech adoption now,” Solomon added.

“Technologies like video conferencing, cloud-based office applications, cloud-based accounting and ERP systems had already transformed the business landscape by providing flexibility and agility, but the pandemic has proven these technologies to be more than a luxury — they have become essential,” explained Marcus Wagner, founder and CEO of AcctTwo. “As the economy starts to revive, we plan to advocate for businesses to fully embrace these cloud technologies and outsource their non-core functions so that they are better prepared for future disruptions.”

The pandemic has made the cloud a necessity instead of just a possibility. Going forward, businesses will be free to explore new technologies that will enable success, springboarding from already being set up in the cloud.

Video killed the in-person meeting

Despite not being in person, communications between VARs and their clients increased for many last year. This was a natural consequence of clients needing urgent help, but they also felt more comfortable when their consultants were in touch with them frequently. Technology like video conferencing became the norm, and now feels indispensable.

“Technology is more important than ever, but how we have communicated personally has changed forever,” said George Mackiewicz, president of CAL Business Solutions. “The need to be face to face may never be back to the level it was pre-pandemic. Video calling has become the norm, and is very important in trying to keep that face to face relationship.”

Video calling is not just a stop-gap. The simple tool allows consultants to communicate with clients without wasting time traveling, and that lets communication happen more frequently.

Data analytics, forecasting and more

Once clients were in the cloud and successfully working remotely, they quickly realized they needed more help. Some needed guidance applying for Paycheck Protection Program loans. Others needed strategic help to keep them afloat through the pandemic. Access to data analytics capabilities became invaluable for businesses to get real insight into their numbers and make plans for getting through the tough time. Some companies started performing forecasts several times a month to keep up with how developments around COVID were changing sometimes week to week.

“Because they require access to the most up-to-date information in a very digestible format, we have seen a big increase in our clients’ focus on data analytics and visualization,” Matt Armanino, CEO of Armanino, said. “Prior to 2020, many clients were slow to engage and did not feel knowledgeable in this area. However, throughout the year, this took off and led to many opportunities for educating and helping our clients to optimize the use of their current systems — specifically their reporting functionality, identifying where there may be gaps, and providing solutions through tools such as Alteryx, Tableau, and Power BI.”

“Some made the transition to all remote work easily, but some needed to accelerate plans, and some needed immediate support to continue operations,” said Matt Kenney, partner, business applications for RSM. “We also saw a need for increased budgeting and forecasting tools and consulting especially around cash flows. In times of uncertainty, any visibility a client can get is very valuable.”

New business opportunities

The pandemic was not all about triage and lifesaving for VARs last year. It was also about opportunity. The VARs on our list continued growing, sometimes through acquisitions, as usual, but some of that growth came from investing in new lines of business as the pandemic created opportunity.

For example, RSM saw opportunity in the life sciences, and the firm invested in taking on more of those clients. “The awareness of health topics led to increased investment in life sciences,” said consulting services partner Brian Becker. “We were able to help many of those types of organizations quickly put internal systems in place to support their research. This trend included governments putting increased investment in public health case management, which resulted in opportunities for RSM to support those large projects.”

And of course, e-commerce was another big opportunity for VARs in 2020. Many firms on the list this year reported an influx of business moving clients onto e-commerce platforms urgently. Net at Work was fortunate enough to have developed a robust e-commerce platform before the pandemic hit, so last year, the company saw a lot of momentum for its erpCommerce product.

The most valuable asset

People. It’s not that VARs didn’t perform layoffs last year — some did. But most firms reported an increase in hiring, especially in the area of cloud technology. Alta Vista Technology hired new staff and expanded its marketing reach to capture new leads needing to move off on-premise software. CrossCountry Consulting hired a number of experienced leaders and subject matter experts in the areas of artificial intelligence, automation and data analytics.

CrossCountry was also savvy enough to realize early on that having their workforce go completely remote would require extra tending of employee relationships, and work to keep the firm culture thriving.

“The pandemic has given the firm a new perspective on how we hire, how we retain, and how we communicate,” said co-founders and managing partners David Kay and Erik Linn. “CrossCountry grew by double digits in revenue during a very trying year and it is because we came together, showed respect for the mental toll that the pandemic was taking on the employees outside of work, and showed that same respect to our clients. We also put additional emphasis on making adjustments to how our teams communicate so that we could continue to serve our clients not only through our local markets and offices, but at a national and international level, as well. From a recruiting standpoint, this has made the company more competitive and has given us the ability to hire and retain top talent globally.”

DSWi took a very deliberate approach to retaining staff, even through a difficult time. And now that approach is paying dividends, as competitors who did layoffs struggle to catch up in 2021.

“Even through the worst of the pandemic, we did not have any layoffs or furloughs,” said owner Andy Holdaway. “Many businesses around us went into survival mode and reduced non-essential staff, but we’re a consulting services provider, and our people are our strongest asset. Even if holding on to everyone meant losing money in the short time, there was consensus among our management that it was both the right thing to do for our people and for our business to find ways of cost cutting other than staff reduction. Fast-forward to June 2021, we see many businesses around us struggling because they need more re-staff and can’t find the right people. The lesson that we’ll continue to carry forward post-pandemic is that our employees are assets, and whatever loss we may have incurred by retaining them during tough times should be seen as an investment and not an expense.”

See the full list of the VAR 100.