NSCA POV: Business Transformation Meets Post-COVID-19 Recovery


It’s no longer just ‘forward-thinking’ integration companies that are focused on evolving their strategies.

The low-voltage integration industry has long acknowledged the importance of evolving traditional business models and strategies to sustain success; however, the reality slap of the novel coronavirus (COVID-19) has escalated that need. Integration-firm leaders must react and adapt more quickly than they have in the past.

Consider the ongoing dialogue in the integration market about project- and product-based revenue models versus service-based ones. Over the past decade, it has been impossible to attend an integration-industry event or read a trade publication without being confronted with a business case for transitioning to more of a service-driven model. However, the needle hasn’t moved very significantly. Findings from the NSCA 2020 Business Outlook survey show that only nine percent of integrators earn more than one-third of their revenue by selling services, and a whopping 43 percent say service-related sales account for less than five percent of their revenue.

Drawing on my experience interviewing and chatting with integration-firm leaders over the years, I believe that almost all understand the importance of shifting to a service-based revenue model. But, of course, it’s not an easy business transition, and it requires dramatic restructuring with a long-term outlook. Making such a commitment is even more difficult when business is strong—and the low-voltage integration industry has enjoyed several years of momentum.

In other words, as the adage goes, “If it ain’t broke….” It’s asking a lot of a company to make a commitment to “fix” something that’s not obviously problematic.

Unfortunately, due to economic and social impact of the COVID-19 pandemic, there are several aspects of the traditional low-voltage integration business model that are now broken—or, at least, bent. Now is the time to take business-transformation priorities very seriously.

Integration Industry Pivot Point

The COVID-19 crisis, as well as the ongoing recovery, has led to defining moments for the low-voltage integration industry. The same has been true for NSCA. We are aware that, for many integration professionals, the most recent physical industry networking opportunity was our 22nd annual Business & Leadership Conference (BLC) in February. There was an undeniable air of positivity during the event, at which how to manage growth was a central theme.

Soon after BLC, as the economy and the integration market were in the grip of COVID-19, NSCA turned our focus to business continuity. We committed to providing NSCA members with articles and resources aimed at helping integration companies stay in business. Now, as we approach NSCA’s next annual conference—2020 Pivot to Profit (P2P), scheduled for September 22 to 23—which, of course, we’re providing as a virtual experience, our focus has shifted from simply staying in business to recovery and a reboot of the industry. P2P has always been about helping integration companies with business transformation, but, this year, 2020 Pivot to Profit Virtual (2020 P2Pv) reflects how high the stakes have become. The market demands that integration firms transform their business in several ways.

NSCA has identified a number of business-transition priorities that we recommend integration firms consider, all of which will be explored at 2020 P2Pv:

  • Rebuilding revenue and cash flow: Integration companies saw revenue streams and cash flow dry up during the COVID-19 pandemic. As integration firms rebuild and reposition for success, company leaders should prioritize finding new sources of revenue and securing cash flow.
  • Emerging technologies: By nature, integrators are charged with solving customers’ needs with technology. Those needs have shifted. It’s time to explore technologies that help clients with evolving needs related to communications, spacing and health monitoring.
  • Litigation readiness: Running an integration business in the COVID-19 era carries new legal concerns. Put another way, it’s very possible that employees will sue their companies. Company leaders must educate themselves about avoiding and preparing for potential litigation.
  • Jobsite logistics: Any post-COVID-19 reboot plan should include new policies and project-management processes for jobsite health and safety precautions.
  • Recalibrating business processes: Human resources, sales engagement and group gatherings are just a few examples of elements of the integration business that should be revisited.
  • Scaling up (and down): Some NSCA member companies might be scaling their business up to take advantage of new customer demands, but COVID-19 has caused many to scale down. NSCA is focused on helping integrators prepare in both directions.

The low-voltage industry is resilient. Another defining moment that NSCA has witnessed throughout the COVID-19 crisis has been how remarkably durable so many companies have been. With their backs against the wall, we’ve seen company leaders make tough decisions and dramatic shifts in order to preserve their businesses and serve their customers.

These business-transformation processes are far from over and, in some ways, they’re just beginning. At 2020 P2Pv and after it, NSCA is here to support integration firms as they recover and reboot.

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