Don't Be Left Behind: How to diversify and future-proof your company

By Deborah L. O’Mara | Apr 15, 2016
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What does security’s future hold? How can electrical contractors position their security and low-voltage divisions to embrace current technology, while proactively addressing customers’ future needs? Because so many new and evolving services are coming to the physical security industry, it can be difficult to assess where the real profitability will lie. But one thing is certain; companies that diversify and bundle services to their customers will most likely remain successful.

That’s good news for astute electrical contractors (ECs). The days of installing security systems and reaping double-digit profit margins from hardware are gone. Except in extremely large enterprise design/build specifications with multiple locations, you will be lucky to make even a small profit on hardware. So where does that leave you once the system is completed and commissioned? How can you continue to increase a job’s profitability after you leave? The answer is by offering new, cutting-edge amenities.

The proliferation of Internet protocol (IP) systems and cloud-hosted security management programs enables contractors to diversify into areas beyond traditional security, such as video verification, audio, energy management, temperature controls and other building automation systems. A variety of maintenance services—many of which a contractor can provide remotely—also open the door to additional, recurring monthly revenue after the installation.

Diversify, bundle and succeed

Have you witnessed the capability of drones or heard about the Internet of Things? These technological innovations are only two reasons contractors must look to the future to protect their businesses and profitability, according to Mike Simon, managing partner, Connected Technologies LLC, Crystal Lake, Ill.

“Contractors need to focus on diversifying their services, adding new markets and capabilities in order to stay successful,” he said. “Cloud-hosted security management interfaces available today allow contractors to bundle services and use one single interface to control all these different types of systems for all their customers, and that’s a big bonus. With this mindset, they can protect their company’s future profitability.”

With cloud-hosted solutions, a web browser and Internet connection grant contractors access to all of their customer’s locations from anywhere in the world.

“Cloud hosting is a lot more flexible for both the user and the contractor, and it’s not something that has to be maintained at the customer location,” Simon said. “That provides additional efficiencies in the way of remote system maintenance and savings by avoiding truck rolls and costly on-site visits.”

Using a simple interface also makes for a “stickier” customer because it gives the user services they need and use on a daily basis.

“In other words, they won’t be able to do without it,” he said.

Integrated, intelligent options

Access control is one particular segment that’s outpacing even video surveillance, intrusion and fire systems. The major technological trend is the rapid movement of customers to IP, said Robert G. Lydic, global vice president of sales, Isonas, Boulder, Colo.

“The reasons behind this transition are very interesting,” he said. “What we have found is that the technological advantages of IP are only the tip of the iceberg. Customers are expressing a strong desire to be free from proprietary systems. They want an open-architecture system that allows them to easily integrate with other technologies such as video surveillance, HR systems, time and attendance, visitor management, biometrics, and other business-process technologies. Most access control systems have historically trapped the end user into only using their products with limited interface abilities and made it painful to escape their proprietary world. Customers see that the move to IP allows them more options and frees them from proprietary jail.”

Customers want to be able to select from a wide range of services in order to meet their current and future needs, he said. IP- and cloud-hosted solutions allow for greater integrations to other systems and can grow new scopes of work for contractors to expand their businesses.

“Customers want to interact with their system in the way it is easiest for them. This enables use over their smartphones, tablets, PCs and other electronic devices,” Lydic said.

ECs have to look at new ways to gain revenue streams after the installation.

“Everything is changing,” Simon said. “Smartphone controls and biometrics are the way things are headed. If you are providing your customers with access control cards and fobs, you are not doing anything to future-proof your business or your customer. Soon, those devices will be old technology. It’s time to think about the future and how your company can be 
part of it.”

About The Author

O’MARA writes about security, life safety and systems integration and is managing director of DLO Communications. She can be reached at [email protected] or 773.414.3573.





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