In the integration business, things come in cycles. Remember the days of slide projectors, three-gun projectors, early LCDs and projectors being wheeled into rooms instead of being installed?
With each new cycle came new opportunity for us…and the end of the ability to make money in a certain way. The good news was that these “cycles” had fairly long lifespans. The new and old cycles overlapped well, which gave us months (if not years) to prepare for the change ahead. Even though it was change, we could change at our own pace. Most of us dealt very well with these cycles; today, however, things are different.
We see cycles growing more condensed. We learn about a new trend and it goes obsolete almost as quickly as it happened. First we saw projectors become commoditized; then our beloved flatpanels. Videoconferencing went from a complex integration solution to something that most of us can do from our handheld devices. Electronic whiteboards have gone from being the hottest thing in education to things that are widely available and easily integrated. With apps and mobile technology, so many of the tasks we used to think we needed a room to do can be done right on a device.
But there’s good news here, too. These cycles are no different than the old ones we experienced, except for one thing: The rate of change is much faster. In order to deal with this, it’s paramount to have a plan to evaluate business strengths and “pivot” when necessary.
Recognizing this challenge should no longer be something integrators struggle to do. If you look up, it’s obvious that your cheese has been moved. The challenge now is for savvy integrators to create plans to deal with this change. After endless conversations with integrators around the country, too often, I hear that there is no contingency plan: no strategy for how to react when our most successful services become commoditized.
This is why NSCA is focused on developing plans that integrators can follow. Every integrator has to assess its company’s technical competencies and seek out adjacent opportunities to maximize those capabilities. For example, maybe your company was really good at handling presentation technology in classrooms and meeting rooms. As the internet became bigger, however, other companies started coming in to install network cable and CCTV. Many savvy integrators understood this skill-set crossover and added those products and services to their list of marketable solutions.
Nowadays, the adjacencies still exist, but they may be a little less obvious…and they may not be as directly similar. (They may be “adjacent,” but they may also require a different stream of revenue, such as moving between hardware installation and pure services.) Take the adjacencies of understanding video communication and selling subscription-based cloud services for collaboration, for example. I’ve seen many integrators dig in their heels, wanting to continue to sell hardware-based video solutions. It’s hard to argue, however, that most companies don’t necessarily need a complex, integrated system to use video to achieve the result they’re looking for.
I also see similar parallels with control systems. For years, proprietary control systems were a differentiator for integrators. They tied our hardware together, made disparate devices easier to integrate and offered great profit margin when it came to selling the programming. Today, more and more solutions use TCP/IP to control devices with drivers, making control simpler and not requiring nearly as much hardware.
These new adjacencies are good opportunities for integrators to pivot their businesses in a direction that makes sense for customers. Such change means taking a different approach to business (and likely anticipating an impact on company cash flow). I won’t deny for a moment that this is difficult. However, making the shift is the only way companies in our space can stay relevant and deliver the solutions the market needs.
We have quite unique communication, security and collaboration skills, and the adjacencies are there for the taking. We just have to see the opportunity to change in a way that will be good for us in the long run, even if it’s dinging us for the short term.
After the success of last year’s Pivot to Profit event, where more than 175 people gathered to learn how to “pivot” to manage the disruption headed toward our current revenue models, we’re bringing Pivot to Profit back in 2017. Plan to join us September 28-29 at the Crowne Plaza Hotel O’Hare in Rosemont IL, as we take you from “why” to “how” when it comes to “pivoting” to achieve a higher profit. Go to www.nsca.org/p2p for details.