Recently I had the pleasure of collaborating with Sharon Shaw, Director of Education forthe PSA Security Network, Daniel Brault, Founder and President ofElectro Specialty Systems (ESS), and Karen L. Baker, Senior Vice President,The Protection Bureau, on a panel discussion at ISC West about how to make IP video projects profitable. The session was well attended and the discussion spirited.
In my personal and professional experience, I’ve found that the path to any successful endeavor usually begins with brutal honesty. That moment where you look in the mirror and ask yourself: Where am I at today? What do I want to achieve? And what do I need to do to get there? So in that spirit, we asked the 50 or integrators attending our session to complete a questionnaire to assess their state of readiness for handling IP video projects. The survey included 27 questions that covered everything from how prepared they were to provide technical pre- and post-sales support on IP video projects to how well they understood what it takes to maximize revenue and profitability on IP video projects. Much to their credit, the SIs who participated in the readiness questionnaire were brutally honest. An informal tally revealed that most were only at the 50 to 60 percent readiness mark. Still, they left the session with a clear-cut sense of what they needed to do to start down the path of making IP video a viable and profitable business.
Another key point highlighted in the panel discussion was that (contrary to popular belief) retro-fit IP Video projects are much easier than greenfield ones. True, with greenfield projects, SIs can have wide latitude in terms of the physical installation. Laying down cabling can be much easier before the rooms are finished. But greenfield projects can be a double-edged sword. When you’re dealing with new sites, you usually also have to deal with weekly meetings, lots of individual schedules and timelines, and potential construction bottlenecks. This can eat up time and resources and impact your margin on a project negatively if you don’t plan ahead. With retro-fits, on the other hand, you can just jump right in, get on with the work, and get it done.
Dan from ESS reminded us of one other thing – (and this might seem like stating the obvious but I think it’s well worth stating) – IP video or not, successful projects really boil down to one thing: people. Having a skilled, motivated, customer-focused workforce is something no SI should take for granted, even…no, especially…in today’s economy. That’s why Dan says ESS invests a lot in training for employees and cultivates loyalty by treating them well. The audience was well reminded that it can take years to fully develop the IP networking and consultative selling skills needed for IP video projects. The last thing you’d want would be for your highly trained employees to walk across the street to go to work for your competition.
From my own personal experience with video projects (and I’ve been involved in a great many), another common problem I’ve observed is there can often be a disconnect between what is promised and what can actually be delivered within a certain specification, timeframe and price point. Such poor planning and over-promising can cut into IP video profitability and damage your reputation as well. That’s why those responsible for an IP video rollout should get involved in the pre-sales process early on, long before the deal is signed and sealed.
The last point I want to mention is that while IP video was still a hot topic at this year’s ISC West conference, it did take a bit of a back stage to PSIM. And that’s not surprising. While IP Video still offer integrators revenue and profit potential, SIs are starting to open their eyes to the fact that PSIM can pack an even bigger punch. Not surprisingly this came up during our panel discussion. Ten years ago video solutions were proprietary. But now they’re becoming increasing commoditized. Customers can use their buying power to go to IT distributors and purchase off the shelf servers and storage solutions at a lower price. And that cuts into the SI’s once-lucrative revenue and profits on what are now COTs items.
Don’t get me wrong, for those SIs who have the skills and know-how to succeed in IP video, there are still many projects to be won, and that can drive a profitable business. But whether that will fuel significant growth is another question. For forward-thinking SIs PSIM may become a bigger part of the picture. That’s because PSIM is the gift that keeps on giving. Even after a PSIM solution is implemented, customers find new applications and uses for it over time – which for an integrator can translate into ongoing opportunities and revenue streams.
It may not be what everyone in the room was thinking, but when I floated the concept during the recent ISC West panel presentation, one SI literally jumped out of his seat and exclaimed, “Now that’s what I’ve been waiting for. A new business model!”