Exclusive PSA-TEC coverage: crossing the chasm
Several times during PSA-TEC this week in Westminster, Colo., I heard about “crossing the chasm,” a theory and thought process by Geoffrey Moore for marketing high-tech products, different strategies than other industries. This theory follows the technology adoption lifecycle and as Dr. Bob Banerjee of NICE Systems pointed out, every technology goes though this cycle.
While it’s a type of technology curve to adoption, Banerjee pointed out that you have to ‘cross a chasm’ from the visionary to pragmatist stage, and that’s what is currently happening with IP video, video analytics, video management, PSIM and other services-based technological offerings coming to fruition in our formerly hardware or box-based industry. This jump or crossing to mainstream and widespread adoption can be difficult, no matter whom you are—a manufacturer or an integrator or anyone involved with technology for that matter.
Banerjee spoke of this theory in his PSA-TEC educational session: “Generating Superior Profit with IP Video,” one of dozens of superior, thought-provoking, high-level topics delved into at the conference. (See more in SD&I’s July issue.)
How appropriate that this was highlighted at the show, because it applies to the systems integration industry in so many ways. Many products are beginning to cross that imaginary line or hump if you will. And it’s been hard, for the manufacturers, and especially for the integrators, because they just can’t make the profit margins they used to make and that will continue to be not the exception but the rule. Boxes don’t cut it anymore. You have to sell real, tangible services, managed video/access control, maintenance and much more; adding value to every piece and parcel of the integration package. It’s not something to be scared about, unless you decide to stick with the status quo and not recognize the reality of the marketplace. You can hear more about this at Securityinfowatch.com, where we recorded and posted the State of the Industry Report from PSA-TEC and don’t miss it, because there are real implications for your future and for everyone’s in the industry.
Systems integrators too are crossing into the territory that was once unknown, unclear or obstructed in many ways—the chasm if you will. But it’s happening now and these PSA Security members are a perfect example of the right road to travel. These are the integrators who truly ‘get it’ but whether or not they succeed in the future is up to them and how badly they want it.
They have technical knowledge, but need more business acumen. That’s job one. Job two is getting to know every piece and parcel of the integration specification—every person you have to do business with, from the end user to the specifier, to the consultant, to every part of the consuming public. Job three is understanding fully that you can’t make money on installations alone today; that you have to have services that make for a sticky customer, keep them coming back, and add succinctly to the recurring monthly revenue coffers.
And it hasn’t been easy during this long-running recession. Profits have been cut into deeply; smart integrators have not spread themselves too thin, but instead, worked to excel at several strong vertical markets, custom tailoring solutions and proven technologies to the many customers who need to meet regulations, compliance and other orders of fashion. The fact is, what became increasingly clear at this conference was that these integrators, the integration community, is core and critical to what’s happening in the marketplace, and PSA members in particular have taken their destiny into their own hands, attending this conference for educational needs, networking with peers and looking forward, crossing that chasm, if you will, in every thing they do.
Bill Bozeman, president and CEO of PSA Security, said that the industry is changing and PSA recognized that. But he pointed out a missing piece as he addressed the audience in his state of the industry address. “PSA has always been good at technical education, but it’s also about running a profitable business. The major challenge is more in tuned to how to run your business more successfully, not necessarily the technical side. It’s a new business model; this is a technical meeting, but business experience is extremely important.” He pointed out that another major issue is that smaller companies have cash flow issues and “each job has to be profitable.” “The banks are unfriendly to the business, so cash flow continues to be an issue. Running your business today is so different than before. You have to focus on being a better integrator.” Bozeman also explained to SD&I magazine that six percent profit margins will become the norm; it will stay that way, so managed services will be the deciding factor on real profitability.
The PSA-TEC conference is at attendance levels similar to last year, according to Lisa Cole, director of Marketing. But the educational sessions, the message, is different or upped from the communications of prior years, because these are critical times and we have to learn to move to a service model now, or we won’t be in business tomorrow. The chasm is definitely being crossed and whether the integration community makes it standing upright and confident is up to all of you out there. – Deborah O’Mara, editor in chief, Security Dealer &Integrator magazine