It is no great stretch to understand why hosted or remotely managed access control services are fast becoming one of the leading means for installing security contractors to increase recurring revenue.
Shrinking margins on products and other squeezes on profits are forcing dealers and integrators to alter their traditional business model. End users across a range of market niches are feverishly hunting for organizational cost reductions and increased operational efficiencies.
The nexus between the integrator and the customer is a service the customer will see value in and therefore be willing to pay a monthly fee to receive it. Managed access control provides that special connection to the customer.
Generally, at a basic level, the customer is provided with the hardware and installation for the doors they want to control. A Web-based portal is used by the client to manage their own software-based system; the monthly fee includes hosting the access control database, plus technical support if needed. Among an array of upsell opportunities, the integrator can handle all badge printing and card administration, assign access rights, print reports, conduct health checks of the access control system, offer service contracts, and much more.
SSI interviewed several installing security contractors whose companies have recently undertaken the transition to offer managed access control. If you're considering a move into this new service offering, there is much to learn from the shared experiences of these providers.
Overcoming Internal Obstacles
Providing managed access control services makes good business sense for multiple reasons, which will be explored in this article. Still, successfully adopting the software-based services model oftentimes entails organizations first overcome significant impediments. This can be especially true for installing security contractors whose business structure has long been based on selling and installing security hardware.
"What we found is you have to rebuild a lot of internal processes," says Tim Feury, CEO of Marietta, Ga.-based Altec Systems. "We've been doing it for two years and every time you think you are getting close, you uncover a whole bunch of other processes you need to revisit."
Among the internal changes needed to offer managed services at Altec, a member of the PSA Security Network, Feury created a customer support structure that mirrors an IT help desk.
"Tickets come in most of the time via E-mail or through our customer portal," he says. "We are able to set up workflow and various things to route it to the right person."
Kansas City, Mo.-based All Systems launched its managed access control portfolio in earnest in 2009 when it provided a Brivo solution to a local school district. The district's IT department appreciated the idea of someone else managing a technology that was unfamiliar to them, no matter that it resides on the district's network. School administrators liked the fact they had an experienced security professional to manage cards, schedules and access rights.
While signing on the school district proved to be a major success, All Systems has experienced its fair share of growing pains. Its first major obstacle was changing the sales and marketing effort to focus on recurring monthly revenue (RMR) rather than looking for big ticket systems, says Scott Lord, the company's vice president.
"Our business model has always been turnkey integrated solutions on a mid to large scale. I created a new division of our sales team, complete with a different compensation package, to make the selling of managed services a priority," he says. "It simply did not work well to have 'system sales' people adding this to the sales playbook."
For Guardian Systems, a Nashville, Tenn.-based Honeywell Commercial Security Systems (CSS) authorized dealer, ramping up its IT skillsets has been a priority since jumping headlong into managed access control services about one year ago.
"We had to go out and add IT people to our staff and that was a little more expensive than what we were anticipating," says Jason Tolleson, a sales/project manager for the company.
So far Guardian Systems currently staffs two full-time IT personnel with plans to transform its tech staff even further. "Ultimately, at least half of our techs will be formal IT," says Tolleson.
What Markets Are Hot? Cold?
So which market niches are proving to be fertile ground for managed access control solutions? Suffice to say, many. However, there appears to be a good deal of agreement among service providers that enterprise-level and other large-scale end users can be a tough nut to crack.
"While we work closely on many large-scale, highly complex projects for the government and critical infrastructure segments, we typically find that these segments have in-house resources dedicated to managing access control," says Jacky Grimm, director of security solutions at North Canton, Ohio-based Diebold.