How Security-Net Leverages Collective Mindshare & Resources to Realize Greater Success
SSI spoke with a half-dozen of Security-Net’s members to find out how their unity is helping them navigate challenges such as the pandemic and supply chain ordeals and propelling them toward new opportunities and success.
Exton, Pa.-headquartered Security-Net is federation of integrators founded in 1993. Launched with four initial members, the network presently encompasses leaders from 19 companies totaling approximately 60 regional offices and 1,400 professionals.
With a focus on commercial, industrial and government security solutions deployments and dedication to best practices sharing, in recent months the organization has added five new partners as it continues to broaden its reach and the depth of its capabilities.
Seemingly, Security-Net has solved the age-old conundrum of being able to provide the scale of national coverage yet still deliver personalized, local service. SSI spoke with a half-dozen of the group’s members to find out how their unity is helping them navigate sea-change challenges such as the pandemic and supply chain ordeals and propelling them toward an ocean of new opportunities and success.
What have been some of the challenges presented by the pandemic? How has it impacted revenues and what are the lingering effects?
Roy Stephenson, Director of Business Development, Utah Yama Controls: When the pandemic started, Security-Net was on top of it. We started having weekly meetings, talking about what everybody was doing, what could be done, the challenges we were all facing. It was really helpful to share those ideas. I learned so much from the members about what they were doing to mitigate the risk for their employees as well as other people. That was quite amazing and a very big success story for Security-Net.
In Utah, the pandemic didn’t affect us that much. We shut down for two to three weeks, but since that time our business has been essentially off the hook. I don’t know if that’s just federal money or things that are floating around, but we’re up 25% year-over-year annual growth. Others may have had a different experience with it.
John Krumme, Chairman & CEO, Cam-Dex Security: Similarly, we are extremely fortunate. Our growth in 2021 was 18.5% over 2020. At the end of 2020, we were about even, just a little bit ahead of 2019. We considered that a win. As we contemplated in March 2020 what we were going to do as a number of our customers were closing their offices, starting to consolidate, relocating from buildings as people were going home to work, they were taking that space and reconverting or making changes.
All the Security-Net partners came together weekly. We started sharing, what are you going to communicate to your employees? How are we going to say that? How are we going to continue to compensate them, not knowing how many people were going to be impacted by COVID? How many different family members would be impacted? We also knew that as entrepreneurial-based companies, it was important we do the right thing for our employees and our customers so we continued to work together and do everything we could in our personal situations.
We had a two to three-week timeframe where we said, “We’re not sure where we’re going to deploy our installation crews.” We did a quick remake, remodeling our warehouse. We took everything out. We put our guys to work painting and restocking shelves, a total configuration, which needed to be done. We took advantage of that so we could keep every single person working. We didn’t have anyone go without a paycheck through COVID.
Bill Hogan, President & CEO, D/A Central: We were really rocking and rolling when COVID hit, we had hit very big numbers. We had the biggest backlog ever and were very thankful of that moving into the pandemic, because a lot of activity did decline. With a lot of our clients, we were pulled offsites for a month, and then there was a lot of mobilization-demobilization delays.
You lose a lot of efficiency and a lot of productivity as the result of all of that. We were able to manage all of that and get through it. I can’t say, though, that we had growth numbers. We did not grow into 2021 and 2022. The backlog has stayed solid and we’re managing that.
When we were together on those weekly Security-Net calls, we were figuring out how do we do PPE? How do we handle the government loan situation? What are those forms? What’s the timing? It was an incredible opportunity for all the partners to come together and share knowledge so we were collectively a lot stronger and more prepared.
Dave Sweeney, General Manager, Advantech: Having recently evaluating our company’s last two years of key performance metrics, it was exciting to see not only did we survive the pandemic, we’ve thrived. We experienced everything the other partners referenced, especially at the onset where there was a lot of uncertainty. We are very fortunate to have customers that consider us partners and critical to their business operations.
We think the outlook is strong in our economy, in our market. I think there’s a ton of pent-up demand, with projects, needs or systems that may have been delayed or paused the last 18 to 24 months.
Craig Jarrett, President, Netronix: We’re spread out so, for us, the pandemic’s effects have not been consistent. Our largest office in Northern California has probably been affected the most, and most of our large customers in the Bay Area have been working from home so they haven’t had a lot of need in their offices.
Our revenues have been flat where one drops but others have picked up. We’ve been able to maintain most of our people by being able to send them to other office locations that have been busy. We’ve been a net neutral.
Barry Komisar, Founder & CEO, Vision Security Technologies: We had tremendous growth in 2020 of 30%. We maintained that same revenue in 2021, a lot of that because of the government and infrastructure that we do.
There were a lot of business lessons learned during the pandemic, such as the efficiency of virtual meetings. We’re working on a large opportunity for a new university about two hours away from our office. Rather than spending five hours a day driving back and forth for multiple meetings we did it all virtually. That was time saved for other things.
That said, culture at our company is very important. Not having company or customer events or the personal facetime has made it challenging to maintain the culture.
One of the top business ramifications of the pandemic has been the supply chain issues. How has it impacted your company and what are some things you’re doing to deal with it?
Sweeney: For sure we are continuing to struggle with our industry’s absolute failure to prepare for the supply chain challenges that have occurred. It’s been one of the most unforeseen frustrations. If you’d have given me a crystal ball and said, “Hey, in 24 months your business is going to be great, customers are going to pay you to do stuff and you’re going to have tons of healthy employees. You’re just not going to be able to buy the stuff to put it in,” I would have said, “No way!”
Ultimately, that’s what’s happened. That continues to be a daily, weekly, monthly challenge that our team is overcoming. Our customers are being flexible, but certainly is yet another lingering pain in the you know what from COVID.
What has allowed our sales teams to accept coaching through this predicament for the uncomfortable conversations with their customers is that the customer can’t go down the street to get a different answer. We have had a few customers who have said, “I can’t believe that’s the delay time you’re giving me. Cancel my order!” We’ve said, “Up to you, we totally understand.” We’ve not canceled their order behind the scenes, and then they call back about four hours later and say, “Can I get that order back again?” They learn this challenge is pervasive.
As an organization responsible for delivering a solution to a customer, most frustrating has been the unpredictability. It’s one thing to be delayed; I can deal with that. But the supply chain we’ve been dealing with has been the most unpredictable I’ve ever seen. It’s really impacted our ability to be efficient. If we have 95% of the products, do we hold performing the installation until we receive the other 5%, or do we go get 95% of the job done and go back when we have the other 5%?
It’s been wild. You couple this on top of some manufacturers increasing their prices three to four times last year. Some of the most egregious price increases were by manufacturers that couldn’t deliver the products! If you’re going to raise my price, at least send me the stuff. It’s been a phenomenally chaotic, and we’re far from being out of the woods
Krumme: In March 2020 when things were uncertain what was going to happen, we put some controls in place regarding how we were ordering, procuring products and staging things. We were concerned about cashflow. If customers were not going to allow us to come into their offices to finish projects, we didn’t know how that was going to impact us. We put control measures in place and locked that down tighter than ever before so that we were staging projects using just-in-time inventory. We continue to use those processes and techniques.
The challenges around supply chain management when you start talking about card readers, for instance, we’re looking at an eight-week lead time or greater. That’s been challenging for our procurement people. They’re working to say, “OK, I’m not going to order cable for this job until four or five weeks in when I know that my lead time on card readers is eight weeks,” for example. Then the wire comes earlier than what was forecast, let’s say 10 days earlier. It starts to mess with the entire schedule.
We’ve gone back to customers to make sure they understand that before we start the jobs, as the product hits our dock, we’re either going to deliver it or we’re going to warehouse it for you but we’re going to ask you pay for it. We have been a lot more aggressive with that than ever before. We have also changed technology a little bit and looked for alternatives to bridge the gap because customers are getting tired of hearing it’s going to be another six, seven weeks. In today’s supply chain management, we’ve got to be creative.
The situation has put pressure on the bottom line, there’s pressure on wages. Thus, we’re increasing pricing, we’re watching the validation dates on quotations very closely and we’re telling customers upfront, “We’re not sure if we can hold this. We want to be fair and to be your partner.” Many of these customers have been with us 10, 15, in some cases over 30 years. But we can only absorb so much.
Jarrett: We’ve engaged our bigger customers to think ahead as far as they possibly can, six to nine months out. As those projects come, we are ordering product and trying to resupply to stay ahead of the game. It doesn’t always work. Some large customers who use specific products, especially cameras, if those cameras are no longer available, they are putting in second-, third-best options knowing that as soon as the supply chain recovers, they will have to swap them out. Because Netronix does not necessarily dictate the product choice, it’s harder because I might have two or three cameras specific to just one end user. That makes it very hard to maintain our own stock.
We’ve been explaining how today’s product lead times could be something completely different in a week or two. So far, we’ve maintained. It’s not always been comfortable, but we haven’t fallen prey to it yet. The next couple months are going to be the most critical. Most of us realize supply chain issues are going to continue throughout this year.
Komisar: Security-Net has subnet groups comprised of Sales-Net, Tech-Net and Ops-Net for those guys. With the current situation, we formed Source-Net, which gives our purchasing managers a forum because there’s strength in numbers. One of the values Security-Net brings is the collective members pulling information together and gathering because everybody faces something different across the country.
John made a good point about being very diligent with your customers, which we consider as partners of ours. You have to say, “If you guys are even remotely considering this project in the summer, here’s the reality.” We’re having the hard, open conversations with them. Sometimes, we have to bring in a vendor partner and let them have that conversation on behalf of us as we’re all on the same boat.
Supply chain is our biggest hurdle this year. Here we are in a growth space and it’s the only reason keeping us from reaching our potential. I hope it tapers off, but who knows? The unknown is killing us.
Hogan: We have been very fortunate as an industry. For many years, we’ve been able to run on just-in-time inventory. You could get just about anything, unless it was custom, in 48 or 72 hours. All of a sudden, we’ve all had to react. Even if you are able to stock certain items, you may wind up in trouble with the wrong items. Then too, the technology is changing quickly. Something you stock now could be obsolete six months later.
Because of this, clients are starting to talk more about open standards. In some cases, people are getting caught where there is only one supplier that can give them a specific product. They’re starting to pivot and say, “Is that a long-term strategy for us? Should we really start to consider things differently?” We’re all having to adapt. It’s very disruptive.
Stephenson: Many of our projects are typically 12 to 24 months in duration. Essentially, we’ve planned on fulfilling a project at a certain price. As alluded to, we’ve had multiple increases since those times. We’ve had to combine orders, 10, 15 projects together to get a better discount level from certain suppliers, but then they have to send it all at once.
I’ve got to prepare my customer, “Are you willing to pay for this product if it’s going to sit in our bonded insured warehouse if I order it now?” Almost always, they’re saying, “Absolutely. We know what’s going on. Go ahead and get the equipment. Let’s get it in the warehouse, we’ll pay you for it as soon as it arrives. All we need is proof of delivery.” That’s been pretty good.
Every week, I see Security-Net emails going around among everybody looking for product. “Hey, I need 10 of these. I need five of those. Can anybody help me out, please?” Sometimes we have emergency projects, things that must get done. We’ve been very good at teamwork to get those projects done. If I happen to have something on the shelf, I’m not going to need it for a couple of weeks, sure, a partner can have it. Replace it when you get yours in. It’s about working together.
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