Your Business: Profit-Boosting Project Strategies

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

It can be critically important to identify installation challenges as part of bid development. Verify the feasibility of each device’s physical installation point. Walk through the buildings and grounds to verify power and network provision points, cabling installation requirements and technician access to cable run areas. Verify that lifts can be utilized where expected and that any special scaffolding requirements have been communicated. Obtaining written verification helps ensure that customers perform their own requirements in support of the project, and keeps any such failure from being framed as a failing of the integrator.

 

4. Prove that Systems and Equipment will Meet Requirements

Unless the currently shipping product version is field-proven in a previous project to meet each requirement, prove it out yourself. Perform bench testing and field testing as appropriate to prevent being caught in a labor-escalating trial-and-error commissioning scenario. Culprits in such scenarios include any device or system programmable features, especially where human interaction is involved. Requirements can include people-per-minute capacity for revolving door access control, seconds-to-card-acceptance for elevator or gate access control, and sharpness of image for critical camera fields of view. Commonly troublesome requirements with video are recording retention capacity, and video analytics object/behavior detection and identity recognition.

 

5. Get Your Project Managers Certified

Getting your project manager trained and certified has the broadest impact on project profit factors, and is probably the highest-ROI strategy of those presented here. The Certified Security Project Manager program from SIA is intended to ensure that project managers fully understand how to manage the costs, to ensure the quality and to schedule projects throughout all phases of the project lifecycle. The certification also covers other success factors such as stakeholders, estimating, revenue, cash flow and risk management.

A highly proficient project manager can achieve significantly better project performance than is typical for most security system projects, providing his or her company with both professional and financial competitive advantages. Project stress factors are usually reduced for everyone, including project managers.

Here are just a couple excerpts from the strong endorsements I received from CSPMs about the value of the program: “This course provides the necessary framework to allow you to manage the project from its inception to close out. Working from the aspect of putting out fires can cost more money than managing the project correctly . . . the course cost up front will be made back many times over.”

“The class was developed specifically for the security industry. There is a lot of material that goes beyond general project management principles.”

 

Reality Check

You can get a good idea of the value of these strategies by reviewing previous projects to identify the causes underlying any significant variances from the initial project costing, checking for the factors related to the strategies described above. Some integrators already perform project “post-mortems” — identifying what went right; what went wrong; how to prevent future wrongs; and things to do better to make the next project even more profitable. Few integrators review the history of projects to determine their success in making project profitability improvements.

Use material from the five strategies above to create a checklist to review past projects, with a clear eye to the profit factors. Incorporate any other elements which, based on your current recollection of project history, should be included. Involve operations managers, project managers and sales personnel in the review to cover the full project lifecycle. Use the findings and recommendations that result to help make a better path forward with regard to project profitability.

 

Ray Bernard, PSP, CHS-III, is a leading security consultant and author, who over 26 years has led many noteworthy security projects for international airports, nuclear disarmament facilities, sports stadiums, water districts, energy utilities, hotels, manufacturing plants and multiple-tower high-rise facilities. (www.go-rbcs.com)

Jerry Bidmead, CSPM, is a Senior Field Engineer with over 35 years in the security field, including base computer security and TEMPEST in the U.S. Air Force, and electronic physical security systems design and project management. (www.linkedin.com/in/jerrybidmead)

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