2017 CI: State of the Industry Report

“They don’t want to hear about the why anymore. They get that. They’re tired of us preaching that,” he says. “They’re saying, ‘All right. We drank the Kool-Aid. Now show us exactly how to structure the deals, how to set up the back office, how to manage these agreements.’ They’re taking it to the next level.”

What once was a pitfall for many in managed services is becoming an opportunity. The same can be said of selling to customers’ IT directors.

PHOTOS: Inside the 2017 CI State of the Industry Report

Asked about which position is their customers’ most typical decision-making point person, about a third of respondents say it’s an IT director. Then another 28 percent say it’s a manager type position. Very few, meanwhile, 5 percent, say it’s a facilities manager.

“There has certainly been a downturn in the facilities department being the decision-maker. That we know,” Wilson says, adding that NSCA member companies are seeing more influence from business unit directors, which he figures falls into that 28 percent category.

“More of our systems are being sold at the division level or department level where they’re seeing our systems tie into their business decisions.”

In all of those cases, Wilson adds, the IT department has the final say. “The IT department, while they may not be our primary decision-maker, they can shut everything down.”

One clear reason why they might shut down a potential sale, Wilson says, is when an integrator doesn’t demonstrate credibility “through documentation, psyche, insurance, and wherewithal on the IT space.”

End users have very clear expectations of what they get from us. If we can’t demonstrate that to them in their language, we’re in trouble because someone else will.”
—Dave Labuskes, InfoComm executive director

Again, however, the flip side is that integrators that can demonstrate that credibility can win over customers’ critical decision makers and sell them solutions.

That’s when the “wonder” happens, said InfoComm executive director David Labuskes during the recent 2016 InfoComm AV Executive Conference.

“Our industry is about creating wonder and experiences. We’ve become a strategic asset, but IT was always at the table. The best route we have to getting a seat at the table is to say ‘you need us because you need wonder.’ End users have very clear expectations of what they get from us. If we can’t demonstrate that to them in their language, we’re in trouble because someone else will.”

The silver lining in Labuskes’ warning is that there is a formula there that small, mid-sized and large integration firms can follow.

It’s the same with managed services. It may be easier for a large firm to structure itself for successful delivery of managed services, but it’s not unattainable for smaller firms. If $38 million Genesis Integration, a firm that admittedly was stuck in the transactional sale mud for years, can shift to doing it successfully, other small and mid-sized firms can, too.

There’s no doubt that the cards are stacked in favor of the larger firms. Wilson admits it.

He’s not particularly worried about AVI-SPL, Diversified, Whitlock and the other relatively behemoth firms that sit at the top of the industry. He’s not even that concerned with the extremely small and focused firms.

“I think we’ll still see a lot of the mom-and-pop, the 10- and 12-person companies that focus on a single market or single technology.”

What Wilson is worried about is what once was the sweet spot in the middle: integration firms with 50 to 200 employees. “How many of them are going to be left?”

Based on the momentum heading into 2017, it’s safe to assume that plenty more are heading for the off ramp.

However, for the ones forging ahead — the surveyed 181 that are relatively optimistic about the road ahead — here’s to fighting the good fight.