InfoComm is also well aware that the increasing complexity of integrated solutions is creating challenges for its members. Labuskes adds this wrinkle: not only are the back ends of systems increasingly complex, but end users increasingly have an expectation of total simplicity in terms of interface and their interaction with technology.
“It’s more and more difficult for our integrators and our end users to understand all of the various components and the communication between those components,” Labuskes says. The flip side of that, he adds, are the “changing equation of expectations from the end user” and the “greater impact of the expectations of things to just work.”
Labuskes says InfoComm has programs committed to helping its membership overcome these challenges.
“Delivering that means that we’re going to continue to invest in certification for individuals and for companies. We’re going to continue to enhance the APEX [Audiovisual Providers of Excellence certification] program. We’re going to continue to look at how we help individuals to certify themselves as experts. We’re going to continue to push for standards. We’re going to continue to enhance our educational offering and our thought-leadership pieces and the work that we’re doing across the globe for the industry.”
Wilson emphasizes that the issue of getting up to speed and in sync with manufacturers is critical, but he’s careful not to lump all firms into that category. “There are the haves and the have nots,” he says. Firms that were quick to focus on network-centric solutions, remote diagnostics and the growing role of IT within their clients’ organizations are doing well, but he says “the vast majority of our members” need to evolve quickly.
An IT director or professional is the most common decision maker within clients’ organizations, according to one-third of survey respondents, far outpacing facilities managers, construction, general contractors and all traditional point persons. In fact, as the role of IT increases, those other parties’ purchasing influence is going down dramatically, Wilson says.
“In order for our dealers to be relevant and not entice the manufacturers to sell their solutions directly to the end users, we’ve got to make sure that our skillsets are on par with the innovation that is taking place out there right now,” Wilson says. “So we’re in a mad dash to align the technology roadmap of our leading manufacturers with that of the vast majority of our integrators.”
One way NSCA is doing that is through a program it hopes to announce and explain at its Business & Leadership Conference, February 25-27 in Dallas. The idea is for NSCA to take the pulse of individual integration firms’ overall readiness for the changing business climate by essentially auditing firms and letting them know how ready they are in several categories, including working with IT and network integration.
NSCA will go so far as to benchmark one company versus the field and grade them on their readiness. If they’re not, it will assess how to get ready, what kind of investment they’re willing to make and how long it will take.
“What I’m seeing is a level of sophistication that is going to rapidly be upon on us and the expectation is that channel partners or system integrators be ready to be a value-added piece of that transition,” Wilson says. “If we’re not, we have to do some soul searching. If we’re not relevant in the new technology economy, what the hell will we be left doing? If we’re not ready to sell to IT managers, IT professionals, if we are simple contractors hoping that the architect, or construction will have stuff relevant to us, that can be a pretty limiting factor.”
Same Problems, Different Year
The idea behind CI‘s Integrator of the Year is to choose a firm that is doing something well that other integration firms ought to also try to do and do well. Pretty simple.
A couple of factors made selecting Eatontown, N.J.-based Yorktel as the 2015 CI Integrator of the Year an easy choice. One is that 91 percent of surveyed integration firms say that they have less than a third of their annual revenue under contract. Another is that Yorktel, with nearly half its revenue stemming from managed services, is completely and culturally committed to selling service. It rarely will bid on a project that doesn’t include service.
The major takeaway is that selling managed services required Yorktel to make a major shift in approach that started 20 years ago. Founder Dr. York Wang hired Ron Gaboury as CFO, now CEO, and to develop within the company what’s now known as managed services.
“There’s an investment that goes along with providing these services, both in terms of infrastructure and the talent pool,” Gaboury says.
Seeing that investment pay off can take time, of course. AV integrators have been pounded over the head with the importance of generating service revenue amid dwindling margins for years. That the numbers aren’t shifting percentage-wise is perplexing.
Part of the problem might be that non-behemoth integration firms, while they can improve their ability to sell service, still struggle to implement service programs particularly for projects outside of their geographic comfort zone, says Chris Bianchet, president of Herman Integrated Services, which is launching a nationwide service network to support its dealers service contracts. “Service business is still one of the most profitable margins left in our industry so don’t be scared,” he advises.