The IISADMPWD Replacement Tool will work with local passwords. (A fancier way to say this would be that it works with NT accounts in the SAM). Just set the Context type to Machine and set the Store name to the name of the machine (not the FQDN) on the Admin page of each IISADMPWD Replacement Tool web application. You might need to set the Service account name and password as well but try it first without these values. IISADMPWD Replacement local password management is absolutely part of the software solution.
Go to the IISADMPWD Replacement Tool page for more information.