State of Commercial Security 2022: Contending With COVID, Supply Issues & More
Like indomitable explorers hacking their way through a thick and relentless jungle, commercial security integrators are continuing to thrive amid a legion of challenges.
A classic trust exercise is turning your back to someone (hopefully that you know, and who is paying attention!) and allowing yourself to fall backwards for them to catch you before you fall. The concept is that it’s important to realize we don’t have to carry heavy burdens alone and everyone benefits through collaboration and looking out for one another. Extrapolating that to security integrators, sometimes the greatest success is achieved by working together for common goals — often realized through the support of organized dealer programs and networking among members.
This philosophy can really reap dividends during times of extreme hardship and duress, as we have all experienced courtesy of the pandemic the past two years — along with its integration business manifestations of overall economics, customer site closures and project delays, staffing shortfalls, supply chain woes, and inflation.
“It’s a process to go and find who’s spending money and what vertical is hot,” says Tyler Blake of Midwest Alarm and BCI Integrated Solutions. “But I still say there’s still customer segments or verticals that are not what they were pre-pandemic and it’s probably going to be a little bit of a longer recovery period for those people just because the losses that they had were so substantial.”
“We’ve notified customers of supply chain increases, and we are passing that along to the customers,” says Jim Lonie of Integrated Security & Communications. “We put a letter out to all of them, we’ve called it out in our quotes, so we’re not hiding anything. We’re not trying to bleed them dry; we’re passing through what we’re getting marked upon.”
Despite such hurdles Blake and Lonie remain steadfast and optimistic, in large part due to the unshaken confidence they have in the mindshare of best practices, training, relationships and leading technology they enjoy within the Honeywell Integrated Security Certified Dealer program.
Find out how they and two other security company executives (see box for details) are navigating these taxing times in SSI’s annual Commercial Dealer Roundtable.
▶ Tyler Blake is COO of Tampa, Fla.-based Midwest Alarm and BCI Integrated Solutions. In business more than 50 years, the company operates its own central monitoring station and serves customers with a full complement of security solutions, primarily in the Midwest and Southeast.
▶ Jim Cooper is vice president of technology for Millstone, N.J.-headquartered Integrated Security & Communications. Founded in 2007, the company runs four other locations in Northeast, South and West, offering a wide range of engineered commercial security solutions.
▶ Ronald Haught is CEO of Quincy, Ill.-based Alarm Systems Inc. and Associated Technical Services in Milwaukee. Those interests include offering a variety of security systems and services, a fire extinguisher business, specializing in Michigan’s healthcare market. Local and national accounts span nearly 20 states.
▶ Jim Lonie is a 30-year industry veteran who presently serves as COO of Millstone, N.J. -headquartered Integrated Security & Communications. Founded in 2007, the company runs four other locations in Northeast, South and West, offering a wide range of engineered commercial security solutions.
In what substantial ways the pandemic continues to affect your company?
Jim Cooper: It’s really been interesting finding balance making sure company needs are met, customer needs are met and all the different regulations are met. Because we have a national footprint every state we work in is a little different. It’s really been a bit of a challenge, especially on the operation side for field staff. We have had to make sure everybody’s compliant with the customers’ needs, not only in terms of their business but also if they fall under other government regulations we have to be compliant as a sub under that.
Tyler Blake: Maybe the most obvious impact at present is the supply chain. Not only just lead time on parts, which seems to change by the day and week, but for us and in talking to other integrators as well, certain projects, especially multiyear, are experiencing a lot of margin compression. With contracted multiyear projects, some big product categories have seen four or five price increases the past year, plus surcharges and everything else. For an integrator taking the risk on such a project they might lose their entire margin. Your product markup has now been lost to the supply chain issues.
Secondly, the other challenge remains labor. The past year was tough on not just people at work, out of work with COVID, but also the mental tax for employees, and especially now adding the supply chain on top of it. Project managers and field technicians are getting a bit mentally fried with so much change happening constantly.
Jim Lonie: One of the biggest things on the personnel is whether we can send someone to a site or not, whether you can have vaccinated or unvaccinated people on the site. Because if we have to send someone to a service call who’s not vaccinated, now you’ve got to pull someone off another team to send them there. It really disrupts your day-to-day flow and kills morale as it puts people at odds with each other over who’s vaccinated or unvaccinated. They can feel punished for being sent to a job when the other person can’t go. We’re battling whether we have to keep people at home because we can’t send them anywhere in certain states.
Ronald Haught: Something we’ve done that has really helped the situation is having custom-built COVID trailers made. We built basically portable offices with heat and filtration systems that we stock with PPE and all the stuff they would need, and shipped these trailers to specific jobsites, be it a remote site or a corporate office. These trailers minimized exposure for our staff and customers alike. That has helped as our staff weren’t confined to their work vehicles and it gave them a space to decompress, do their work and not feel like they were under the thumb.
We’ve considered employees’ wishes; although we encouraged being vaccinated, if they don’t want to that’s OK too and we just have to work around it. Specifically in the healthcare side, we’re in a lot of nursing homes and hospitals and so we must be very cautious and take that super seriously. Our guys get tested regularly, twice a week I believe. In some locations, they’re tested every time they go.
What are you anticipating overall for your security business in 2022 and why?
Haught: In conversations we’re having with many of our customers, they’re like everybody else in that we’ve all suffered productivity, business and revenue challenges. A lot of these folks were constrained by the environment and now their companies are to the point where they postponed as much maintenance work or other things as possible to the point now it’s critical. A positive that’s come out of that is in conversations about the products you’re putting in and those projects, we’ve discovered it’s a great time to talk about alternative technologies.
For example, there’s a resurgence in biometrics and understanding some of the crowd control and social distancing capabilities. With everybody wanting to bring their workforces back into offices, there is a hunger to learn about these products. So we’re parlaying that to add additional items to help benefit their business.
Blake: I believe Q1 and Q2 are going to be really strong, especially anything with larger corporate enterprise customers. My optimism on the construction side is a little bit more tepid, kind of in the mid to latter part of the year due to hangover with the supply chain. We’ve heard from a handful of projects that are so far overbudget they have been put on hold because the cost per square foot has gone through the roof.
It’s going to be a repeat of the past two years where it’s finding where the cheese is to move to; it’s not going to be just straight up for every vertical or market segment. I am curious to see how much money from the infrastructure bill gets pushed down. There’s going to be a lot of K-12, government, university work, state work, federal work, that’s all going to come through that. I believe the money will be there but it’s going to be filled with a lot of bureaucracy. It’ll probably be closer to an 18-month rollout, and so I don’t know how much we’re going to see as soon as 2022.
Cooper: People are a little leery of traditional contact environments and are looking for ways to do contactless. Using a contactless biometric to get through your turnstile or whatever your doors are, tying some of that stuff in with automatic door operators can be an appealing and effective solution. We’re also seeing analytics, AI and machine learning gain popularity on the video side for occupancy counting, contact tracing, things like that. At the beginning of the pandemic we saw a huge surge in requests for technology, but that petered out when people realized it wasn’t performing and was too expensive.
Lonie: We’re seeing a lot of products becoming end of life that must be replaced, so that brings business. We have a couple of projects going on now where it’s a couple of million dollars of customers upgrading their infrastructure. That’s going to continue.
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