The deal is a lock. The customer loves us and we’re written into the RFP by name,” or so the sales guy told me. So you can imagine how surprised I was when several weeks later I received an anxious call from the same sale guy. “Our partners aren’t bidding. They say the deal will go to an electrical contractor. What are we going to do?”
This common scenario started as a big city metro problem; but, over the last three years has become a regular occurrence in big and small markets. Everybody feels like they are being commoditized these days, including electrical contractors. The trend for electric contractors (and general contractors for that matter) to evolve into system integrators is predictable – and like it or not, inevitable. Picking and installing commercially available components is no longer integration; it’s assembly and test. And once customers begin to think integration is easy, they start to question why they would pay any premium for this capability. So with 60 to 70 percent of many projects being field labor, wire, pipe, etc., it’s no wonder that the companies providing the work (electrical contractors) figured out they hold the cards.
So what can today’s system integrator do?
There are options but all come with some growing pains. The first approach that I see many integrators pursuing is to evolve into a “super integrator” – elevating themselves from configure-test-install to consult-engineer-deliver. The goal is to find and win projects with increased complexity that require real engineering. This approach can work but has its challenges. The biggest challenge is the need to retool the organization for complexity. That means more engineers, longer sales cycles, different selling practices, etc. Repositioning as a “super integrator” can also be a double-edged sword. You differentiate yourself – but at what cost? Fewer customers have complex projects that require the “super integrator” skill set which could mean more competitors going after even fewer opportunities. And did I mention that there are also hungry and experienced IT integrators licking their chops to win some of this business too? (Damn, IP is screwing up everything; but, that’s for another blog).
The second option for integrators is not new but needs a refresh. It’s to focus on services and total cost of ownership. The irony of cheap is that in reality it’s often expensive. When we understand the customer’s perceived risks and can convince them of the value of post sales service and maintenance, everybody wins: OEM, integrator, and customer. The move to IP is enabling this like never before and opening up security decision makers to the value of the post sales support. (Awesome, IP is going to fix everything; but, that’s for another blog).