Business

What Are Today’s AV Service Providers Facing?

More than a decade ago, I was an advocate for the many benefits of delivering audiovisual consulting and design services within the context of a larger design firm. By having many services under one umbrella, a firm was much better positioned for seamless collaboration. It also often allowed deeper involvement in a project from the earliest stages of proposal development, leading to better solutions and better delivery.

Today, I find myself with a different perspective that favors a leaner model. Was I wrong back then? I don’t believe I was. All those benefits are, indeed, true. But they come at a price. Over the past decade, the market has evolved quite a bit, resulting in a much different business environment in which we now need to deliver projects.

The AV field is maturing and is following an almost identical trajectory to where the IT industry went a decade or two ago. Products are becoming increasingly more commoditized, and the amount of sales direct to end users is growing every year. Like IT, this can be attributed to multiple things. Technology is now woven throughout every part of our lives, from our cars to our laundry rooms. As consumers become more familiar with current technology, it’s only natural that they would become less reliant on getting that information from others. Many manufacturers are responding to that shift in market demand and are increasingly making products more readily available directly to the end user.

Although products have become more commoditized, they have also become much more sophisticated and more complex to configure and operate. Enter “Solutions Providers.” Again, taking a tip from the IT playbook that has already played out, as an industry, our focus will need to shift away from the traditional “Integrator” or “Consultant” mindset and move toward a more encompassing “Solutions Provider.” Some companies have already been quick to embrace this; others will likely resist the change with every ounce of their being. What does this shift look like? Managed services, leased equipment, hardware as a service, unconventional integrator/consultant partnerships, heavy focus on technology master planning and enterprise strategy, and software programming to name a few.

There is no shortage of opportunity for industry professionals to provide meaningful and much-needed value to our customers. But does what we provide today have to look much different from what we provided a decade ago? Absolutely!

Not only are the services that provide value changing, but how much value they command has also changed. Firms with nontraditional business models have disrupted the industry, creating a market with lower fees and lower margins. Is this bad? Obviously, it depends on who you ask! For service providers? Absolutely. For the end user? Not necessarily.

In some instances, these disrupters are delivering inferior quality and expertise so, as in all things in life, you may get what you pay for. In other instances, however, companies are responding to the culture-wide push toward leaner business models. Firms that don’t respond to this either already have or will soon begin to lose out. End users are less willing to pay elevated fees for multiple tiers of administrative overhead and other corporate expenses that have little direct benefit to them.

Lean business means identifying and removing all the unnecessary waste that goes into a project delivery, while still ensuring that consistency, quality and service are maintained. We need to be focused more on adapting our way of doing business to what’s in the best interest of the customer, rather than trying to convince the customer to see the value in our way of doing business.

So, can large service providers succeed in today’s business climate? Yes, but they need to remain lean and agile. We can find multiple examples of what were once giant firms that have essentially imploded or are in a state of gradual decay. And…they need to become “Solutions Providers.”

Although I was a huge proponent of the large integrated design firm with a lot of horsepower a decade ago, I now believe that, whether big or small, lean and agile are key characteristics of the firms that will be successful in today’s new marketplace.

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