Your Business: Profit-Boosting Project Strategies

Five ways to limit customer dissatisfaction and impact on the bottom line


According to many security systems integrators large and small, the business of systems integration has become increasingly challenging every year for more than a decade. The pace of technology change is faster, product life cycles are shorter, and both systems and devices are growing more complex. This means that it is harder to keep sales, design and installation personnel up to speed on product capabilities, value and cost.

Economic challenges for integrators are greater, with fuel costs, lower product margins, and stricter financing being several factors. Economic factors also affect customers, impacting customer security budgets and increasing the pressure for cost-cutting measures, including competitive bidding. Competition for security integration projects remains keen.

This makes it more important than ever to protect and maximize the profit from each individual project. The following are five strategies for boosting project profits — while none of them are new ideas — they are often neglected and their importance is much greater today due to their impact on project bottom lines. Applying these strategies also has the benefit of removing the common causes for customer dissatisfaction.

 

1. Fix Faulty RFPs and Invitations to Bid

It is not unusual for RFPs and Invitations to Bid to be flawed. This can be a special challenge in a competitive bidding situation, if the flaws are omissions the project needs. It may be likely that some competitors will omit the items in bid proposals in favor of submitting change orders later.

If your business practice favors informing the customer up front to help avoid change orders, request that the omitted items be included via formal notice or RFP addendum, to level the playing field. With time constraint facing customer these days, it is not uncommon for customers to reuse specifications from previous projects using the cut and paste method, or take a “boilerplate” approach. It is critical that every RFP and Invitation to Bid be reviewed for applicability and completeness.

 

2. Clearly Capture Quality and Performance Requirements

Often, some of the project requirements fall through the cracks in the handoff between sales and installation. This is common for negotiated sales, but is still true for projects where customers are following a formal purchasing process — whether competitively bid or not.

Each requirement should be expressed in a way that makes it easily testable by inspection or demonstration: has the requirement been met or not? Where requirements have been provided by an independent consultant, be sure to review them simultaneously with the customer and the consultant to ensure that your interpretation of them matches customer expectations as well as the consultant’s. Clarify or correct requirements as needed; don’t accept verbal explanations that are not already self-evident in the written verbiage.

When a specific product or system is selected by the customer, a common unexpressed customer belief is that no further specifications are required; but nothing could be further from the truth given the complexity and configuration options of today’s technology. Typically, when quality and performance requirements are not obtained in clearly written language, the amount of installation and commissioning work that has to be redone increases, driving project labor costs up and schedule out.

Quality requirements such as appearance issues include finish work that may not be common for integrators to perform, such as painting conduit and fixtures. When dealing with a customer-provided network, there may be cable management standards or practices to comply with, including for cable labeling. Failing to account for such items initially can be a significant cost estimation error depending upon the size and/or complexity of the project.

 

3. Identify Installation Challenges and Their Solutions

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