Sustaining Profitability for Security Integrators

The marketplace for physical security solutions is hyper-competitive and isn’t going to change anytime soon. Security Integrators charged with finding products like cameras, video management software, NVRs, cabling, racks and cabinets, etc. are under great pressure to boost profits for every job. If you are like most integrators sources for your security product supply chain range from distributors to manufacturers, online and in some cases even big-box retailers. 

Source-Specific Value Adds

When considering solutions, there are often source-specific add-ons which contribute to the overall value and impact your decision. Some of these could include:  

• Customer service
• Warranties
• Professional technology consultation 

As we all know, some product sources are better than others when it comes to offering these value add-ons, but in an increasingly competitive and commoditized purchasing environment, it can mean the difference between profit and loss on a particular job or project. 

For example, strategically focused Security Integrators know that top notch customer service is worth its weight in gold. Conversely, they know that bad customer service can be a major contributing factor in the failure of a project. Think of customer service like car insurance – an expense that might not initially show value, but always proves to be worthwhile in the long run. While the typical approach might be to prioritize the lowest price, Security Integrators who focus only on cost, at the expense of customer service, often end up paying more in the end.

The Fallacy of “Paying Peter to Keep Paul Honest”

In an effort to maintain a competitive environment between supply chain purchasing sources, many Security Integrators buy from multiple sources as they build a bill of materials (BOM) for particular projects. Unfortunately, this can lead to the death of profitability by a thousand cuts as margins decrease bit-by-bit. What started out as a profitable job suddenly becomes a break-even situation, or worse. 

Of course, if everything goes exactly as intended, you can end up with a profitable job and a happy customer; everyone wins. In reality, working with multiple product sources to build a BOM creates an added level of complexity with even greater risk for something to go wrong. Multiple purchasing sources and more moving parts means more opportunity for miscommunication, multiple P.O.’s, different payment terms and of course added processing time for your office personnel – and more time means less profit.

Most Security Integrators are juggling multiple jobs at any given time. If profits start to slip for any of the ongoing jobs, they can become a nightmare to manage. When you start to encounter profitability issues from dealing with multiple product sources, how often can you realistically ask your customer to sign-off on a revised BOM? It’s safe to say that those difficult conversations rarely occur.

Consolidate Your Supply Chain

Consolidating the security product supply chain to a single source might seem like a risky proposition, especially if it’s opposite of the standard approach within a business. Rather than quickly pivoting to a unified source, implementing a measured, strategic plan to identify a single source who provides everything needed to build a security project BOM is recommended. Streamlining your supply chain over time will allow potential sources the opportunity to rise to the top and prove their value to your business.

To maximize growth potential and opportunity for profit, seek out a single source for purchasing that offers the depth and breadth of product and expertise to facilitate a BOM including world-class manufacturers, warranties, logistical know-how, amazing customer service and cost-free technology consultation. Streamlining the purchase and implementation process will significantly reduce any risk of margin loss and allow organizations to tackle the most technologically complex, high-profit security projects.