The management side of selling IP

How to master the domain and achieve success

This implies that the choice of strategy differs between security integrators and IP integrators. For the IP integrators, it is primarily the experience hurdle that must be managed to be recognized as a security-competent player. They need scale and recognition, improved operative security skills and customer relations with the security community. They need geographic footprint, and they need to continue partnering and collaborating with other players, something the IP and IT industry traditionally has been good at, at least in comparison to the traditional security industry. So, while the IP integrators have the necessary technical skills and competencies, and thus have the ticket to ride so to speak, we believe this is an easier-to-imitate asset, which will become a necessity, a hygiene factor in the future, which will only give limited avenues for competitive advantage and no greater opportunities for price premiums. IP players will have to focus on the experience hurdle—building relationships and know-how of the intricacies of the traditional security market--to get leverage from their technical skills. Furthermore, IP integrators will need to expand their networks at end-users, particularly so, the security director’s office.

Security has to adapt

Security integrators, on the other hand, face a different scenario. They have the operative experience of securing spaces, but urgently need to work on the technical ticket hurdle to increase their recognition in the marketplace as technically competent IP integrators. This includes education, training, recruitment or inter-firm collaborations and even mergers with competent integrators. Security integrators also need to relate to new manufacturers and to the IT directors and staff of the end-users.

Integrators need to become better at networking and partnering. Integrators are also wise to leverage their existing relations to security officers. However, what is probably more problematic is that security integrators will have to face periods of trial-and-error as they sell and implement IP solutions to end-users.

It is, we argue, inevitable to foresee a market characterized by experimentation, which, traditionally, is a quality that the security industry is not too keen to embrace, in fact the contrary. But as the experience hurdle can only be dealt with by means of, well, experience, smart integrators find ways to minimize the risks, for instance by driving the early IP implementations in end-user’s environments where the risks are lower. Trying is imperative. The security integrators who succeed with the infusion of technical knowledge and quickly accumulate experience will have great opportunities for price and volume premiums and sustained competitive advantages, as the combination of technical know-how and experience-based knowledge will be a scarce asset in the future.

Professor Thomas Kalling PhD is director of the LUSAX Security Informatics Project, a four-year global economic study on the impact of IP technology on the security industry underway by the Institute of Economic Research, School of Economics and Management at Lund University in Sweden.

Want IP Success? Check this List!

Here’s a checklist based on the knowledge of the Lund studies to help you master the IP surveillance business:

• Create consensus, buy-in and your own approach to IP internally, through experience, not through hype or theory.
• IP is a strategic choice to be fit with other strategic priorities: If? When and what pace? Are we going to be a fast follower or a first-mover?
• Understand the value for the customer and decide how to present the value proposition (e.g. ROI, TCO)
• Top & middle management must push strongly
• Address education strategies
• Experiment and prepare for occasional failure
• Target segments and customers and products and services where it is less risky to drive IP
• Set targets, e.g. “X% of annual EBIT,” “Y% growth of IP,” “outcompete rival Z”
• Put the objectives on the to-do list and on the management agenda: TALK about IP
• Allocate responsibility
• Monitor aggressively, reward and add incentives
• Incorporate with regular reporting