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New Business Model: Provide Continual Service, Not Just Installation

Electrical contractors used to focus on the initial construction phase of a building. This was the “bread-and-butter” phase where contractors made their money. That business model is not the model for today or tomorrow.

If you are still in that mode for gaining business and revenues, your company is working from an obsolete 20th century business model, instead of a current “intelligent amenity” service model that covers the lifetime of the building or business campus. You are losing money because you are not identifying and pursuing more lucrative contracts and ongoing building modifications which must be made when key tenants move in and out.

You are in an ongoing service business today, not a single “construction-phase only” installation business.

This new business model is identified in my book, LOCATION LOCATION CONNECTIVITY. Discussed are the new opportunities from making buildings more redundant in their power and network infrastructure to support tenant applications to adding new network capabilities like Wi-Fi and wireless capacity for supporting the new “edge” technology of the 21st century: smartphones and tablets.

If you want to be successful as an electrical contractor today, you need to understand the multi-disciplinary convergence which happened in the real estate market.  There has been a convergence of real estate, infrastructure, and technology, in order to address and improve regional economic development and sustainability. Understand that, and you understand the real market you are selling into today as well as tomorrow.  If you don’t look at all this changing your marketing approach, you are limiting your potential business and project engagements as well as your profits.

An intelligent amenity must be kept current

Look at the advent of the intelligent building concept about three decades ago (in the mid-1980s). Certain architectural rules of thumb have become totally obsolete from designing commercial buildings with “5-watts-per-square-foot” to “phone lines for every 200 square feet.” Those “tried-and-true” formulas don’t apply to today’s market anymore. Depending on the type of corporate tenants who move into a building, the requirements for both power and network connectivity could change dramatically. Infrastructure needs to be added as well as reconfigured depending on the corporate tenant and their technology requirements.

This has also impacted the way electrical contractors should view their opportunities and what is needed to augment their skill sets for ongoing business.

In the past, you had two different companies addressing the high-voltage and low-voltage parts of the building’s infrastructure. Separate firms and resources were used to install those amenities. Once the installation was done, the job was done.

Today, some electrical contractors have seen it is advantageous to offer both types of installation as well as performing ongoing maintenance (and modifications) because it is a continually changing “intelligent amenity” in the building and business campus for technology-dependent tenants.

Instead of being a “one-shot” construction-phase opportunity, installing and maintaining an “intelligent amenity” of either power or network communications (or both) has become a continual service opportunity going well beyond the construction phase.

The idea of “intelligent infrastructure” providing intelligent amenities (redundant power and broadband connectivity) to support mission critical applications, creates new opportunities that go beyond the initial construction phase. New management strategies and best practices need to be established as well as followed when it comes to business development for electrical contractors.

New approach equals new revenues

This is definitely a growth market and many others are hyping the growth by pointing out to the expansion of the Internet of Things (IoT) and all the new devices it will engage and encompass. The big variable they miss is the IoT is only as good as the internet of reality it has to run on (i.e., the network infrastructure).

Today, there are corporate, mission-critical applications accounting for one-out-of-three applications in their facilities. That number is growing to one out-of-every-two applications as organizations depend more on critical applications needing to be supported and serviced by redundant and reliable infrastructure which has no single point-of-failure.

Don’t get caught up in the hype. Nothing is going to run right if the infrastructure cannot support the anticipated growth, whether it be in the number of devices or the amount of power they need to run applications.

The year 2020 is supposed to be when we begin to see huge shifts to IoT. That is not that far away. If we have 10 billion devices today, based on the predictions made by companies like CISCO and Morgan-Stanley, we might see that new total move up to 50–75 Billion devices.

The big question will be, “Can the current infrastructure handle that type of increase in both devices as well as traffic to each of those devices?” The short answer is no. There needs to be much more redundant infrastructure built out and maintained to support all this new traffic.

View IoT as an opportunity you must plan and take advantage of, as more real estate property management firms seek out real expertise to install new infrastructure capacity as well as new applications to handle the growth in both applications and traffic.

About the Author

James Carlini

Contributing Editor

James Carlini, MBA, is a strategist for mission-critical networks, technology and intelligent infrastructure. He has been the president of Carlini & Associates since 1986. He is author of "LOCATION LOCATION CONNECTIVITY," a visionary book on the...

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