Security Execs Cope With Growing Pains
While renewed business has put bounce back into integrators’ step they must tread carefully to avoid being tripped up by a number of obstacles. In an exclusive roundtable, managers from five leading firms discuss how they are transforming to adapt to new technologies and services.
New technology is not only changing the types of products, solutions and services security integrators can offer — some would say must offer — it is transforming the very essence of what it means to be a security integrator. Additionally propelled by end users’ heightened technological savvy, budgetary pressures and ferventness to optimize efficiencies, a metamorphosis is well under way for forward-thinking integrators. These providers are adopting new solutions-oriented business models that require overhauling and enhancing competencies and skillsets throughout their organizations. Though the order is tall, the potential payoff is monumental.
For its annual Bright Ideas Issue roundtable, SSI gathered five successful business leaders together for an extensive face-to-face discussion about how they are finding sure footing amid this dynamic, shifting landscape. The penetrating discourse, which took place during this year’s PSA-TEC event outside Denver, featured company Presidents Enrique (Henry) Olivares (APL Access & Security, Gilbert, Ariz.), Robert Vezina (Life Safety, Buffalo, N.Y.) and Kurt Will (Will Electronics, St. Louis); and Vice Presidents Jamie Bumgardner (Prime Communications, Elkhorn, Neb.) and Larry Simmons (Tech Systems, Duluth, Ga.).
Although these executives cite varying levels of growth and profitability as they adjust to and forge ahead in the new security integration paradigm, all are encouraged by this year’s revenues and anticipate great future returns. They understand that, more than ever, being successful today requires pushing through the pains to achieve the gains — even if it means changing the fundamental nature of your company and its personnel. Read on to discover how they are making it happen.
Looking at the year so far, what has been bringing a smile to your face?
Henry Olivares: Strength in our commercial sector, overall economic improvements that’s happening now. When the recession hit we were lucky that although commercial slowed down government picked up the slack. They were spending a lot of money and we were doing the larger projects around the country. The economy didn’t affect us that much. But now that the commercial is coming back that’s putting a smile on my face. We have more than one source. Now the government is slowing down and commercial is picking up. I see a lot of corporations moving into Phoenix. A lot of companies are moving to bigger buildings, expanding, and that’s bringing us in for more security.
Jamie Bumgardner: We’ve spent the past 10 years investing a lot of mental and monetary equity into the organization and what we’ve seen the past couple of years is our company reaching that next level of maturity, so we’re pretty optimistic. Between that, the investment we made in the company and the focus we’ve really established the past few years, it’s going to be a good year. In addition to that the economy is doing better every day. So every indicator we see is a positive one.
Kurt Will: We’re pretty excited about our sales volume and how we got there. We went through a couple of rough years in 2011 and ’12. We decided mid last year to do a deep dive on our account base and see where the business is coming from. Found out that we really need to get much more focused on a smaller number of customers. We kind of blew up and reworked our sales force and our whole process as to how we engage our customers. It’s showing benefit.
Robert Vezina: We had a meeting with the managers of the company and talked about what we should do this year in order to continue to grow the business. We’re getting really good at retail service work. We felt we should get a dedicated salesman to continue to build that business, and also parlay that into loss prevention in the construction side of retail. We’ve got people that sell that, so that’s all coming to fruition. We’ve got some really nice new accounts this year.
Larry Simmons: I’ve been with the company five years and this is the best period I’ve seen. We’re strong in topline growth, but more impressively we have double-digit bottom-line growth. The only goal we haven’t hit, although we are almost 95%, is gross margin. We’ve got a good start, and I’m optimistic about the rest of the year. The other thing that really brings a smile my face is we’ve had a really hard three-year focus on recurring revenue in the form of service contracts aimed at a client’s ultimate satisfaction. We focused three years growing that and we’ve exceeded our wildest expectations.
BONUS ONLINE MATERIAL: Security Managers Discuss Adopting New Technologies
There are two sides to every coin. So what is causing you gray hairs this year?
Simmons: It’s two parts; one is the continuing rise in health-care costs. How do we give the employees insurance they look for, their families covered, without continuing to raise premiums to them? Because suddenly we had huge increases to the company. It’s always been a challenge but it looks like it’s getting worse, not better. The other piece is margin erosion. Margins are going down. Manufacturers are impacting the margins we can charge. When you look at MSRP and what you pay, they pretty much control your margin. That’s a bad trend. The behavior of some manufacturers is putting gasoline on the fire. That’s a real concern since we have no control over it.
Vezina: What’s giving me gray hair is more than half our business is service-oriented, so the field management software is very important to us. We felt the need to upgrade so we did that this year. It’s tough getting it implemented. It’s affecting all the employees. They have to learn how to use it and get all the bugs out. But it’s a means to a better day.
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