Backup job fails with a SQL VSS Writer error after installing ACT! Software

Challenge

If you have an ACT! Software installed Veeam Agent for Microsoft Windows job or Veeam Backup & Replication job with Application-aware processing fails with the following:
 

Failed to create snapshot. Error code -2147212300. 'Backup job failed.
Cannot create a shadow copy of the volumes containing writer's data.
A VSS critical writer has failed. Writer name: [SqlServerWriter]. Class ID: [{a65faa63-5ea8-4ebc-9dbd-a0c4db26912a}]. Instance ID: [{1d68f503-11fd-4591-9cf4-90e034386ae9}]. Writer's state: [VSS_WS_FAILED_AT_PREPARE_SNAPSHOT]. Error code: [0x800423f4].'
Cannot create a shadow copy of the volumes containing writer's data.
A VSS critical writer has failed. Writer name: [SqlServerWriter]. Class ID: [{a65faa63-5ea8-4ebc-9dbd-a0c4db26912a}]. Instance ID: [{1d68f503-11fd-4591-9cf4-90e034386ae9}]. Writer's state: [VSS_WS_FAILED_AT_PREPARE_SNAPSHOT]. Error code: [0x800423f4]. (System.Exception)

At the same time these errors appear in Windows Application log:
 

Log Name:      Application
Source:        SQLWRITER
Event ID:      24582
Level:         Error
Keywords:      Classic
User:          N/A
Computer:      TEST
Description:
Sqllib error: Failed to create VDS object. hr = 0x80770005.

Log Name:      Application
Source:        SQLVDI
Event ID:      1
Level:         Error
Keywords:      Classic
User:          N/A
Computer:      TEST
Description:
SQLVDI: Loc=IdentifySQLServer. Desc=Initialize. ErrorCode=(1332)No mapping between account names and security IDs was done.
. Process=5728. Thread=70504. Client. Instance=ACT7. VD=.

Solution

Perform the following steps in order to fix the issue:

1. Open SQL Server Configuration Manager.
2. Navigate to  SQL Server Services.
3. Select an appropriate instance (e.g., SQL Server(ACT7)).
4. Change Log On  from  Built-in account: Local System   to   Built-in account: Local Service