As business organizations across the United States have focused on reopening operations over the last two months, the specter of a renewed COVID-19 surge has forced executives to be flexible with their resiliency plans. This has presented an opportunity for larger security systems integrators who are deft enough to do so, manage the needs of clients who are using the COVID-19 crisis to undertake security systems initiatives that will expand new safety and security protocols and improve business resiliency while keeping costs in check.
It is the mission of today’s systems integrator to help turn the massive challenges faced by their clients into meaningful change that can help them navigate the financial and operational obstacles they face. The irony is most of these integrators are facing the same overwhelming and competitive challenges as their customers. Those who figure to not only survive the short-term crisis imposed by COVID but flourish in the long-term once the virus has abated, are taking an aggressive posture to reinvent their business operations to accommodate increasing digital transformation, restructured cost variables and the implementation of more agile business processes.
What Drives the Business Model?
The business models that drove success for many integrators have probably changed forever. For firms servicing niche vertical markets, the days of “business as usual” certainly don’t apply as casinos and resorts face the conundrum of keeping patrons safe in spite of themselves. Jason Oakley, President and CEO of North American Video, is a leading systems integrator in the gaming industry around the country. NAV’s clients were dramatically and quickly impacted by COVID-19’s “new normal.” It saw almost a complete shut down of close to 1,000 casinos across the U.S. in April and May, according to Oakley, that has been followed by a cautious and phased reopening that continues even though a majority of states are encountering dangerous new peaks in virus cases.
“Our customers’ surveillance systems have to stay operational 24/7 regardless of whether the property is open or closed. It's become essential for our customers to minimize downtime and stretch their systems, especially in situations where they don't have staff,” says Oakley, who has had to modify NAV’s own business operations to accommodate the changing needs of his clientele.
“Our normal level of staff that we would have in the past doesn’t fit our present situation, even though our business model didn't change, per se. But obviously, we've had to make changes to ensure that we can keep our employees and our customers both safe while continuing to support these long-term customers that we've had for 25 years or so. The changes we’ve made on our end include suspending all non-essential travel or face-to-face meetings, adopting home-working where the roles would permit. We actually went down to a single employee in our corporate HQ in New Jersey and one in our HQ in Las Vegas, and then we opened our other locations on an as-needed basis operation to address the needs of customers and projects as they came and went.”
The fact that NAV’s clients and suppliers are implementing similar safety and security protocols as Oakley and his team have made the business transition during a pandemic less stressful. But he admits that with a large number of technical personnel stretched out across the country, it poses a logistical challenge as they attempt to support casino customers in almost every state.
“Where possible we moved to a geographical scheduling model where our employees drove company vehicles to locations rather than fly. As a leadership team, we just decided that the additional costs of time on the road were warranted given the risk of infection in airports and on airplanes; our guys literally do spend weeks and months on the road,” Oakley points out. “The flexibility and reach that we have with our service department has also allowed us to help augment depleted technical staff with our customers and keep them operational when otherwise they might have fallen out of gaming compliance and lost the 24/7 technical support line that we operate. We're investing heavily to enable us to do more remote monitoring and thus more remote support of our customers. Fortunately, that has been well received.”
Drawing Distinction Between Operations and the Business Model
Many business executives, though, prefer to draw a distinct line between what their business model is and how their operational model has evolved. Mike Mathes, the Executive Vice President of Convergint Technologies, confided in a presentation during last week’s virtual Securing New Ground conference that the business landscape will continue to shift for integration firms like his.
“When I think of a business model, I’d figure we were going to see a vast amount of changes; people moving towards managed services for instance. I would tell you that in light of the pandemic we haven't seen a significant change from a business model perspective. Our customers may be accelerating their strategies with new use-cases for their existing systems but the way that we ultimately function and service our customers hasn't changed significantly from our traditional business model,” explains Mathes. “Operationally, though, I would mirror some of what Jason's said. When this first hit, I remember being on the road in mid-March and was suddenly pulled into seven customer calls in just one day -- all about COVID and what was happening. I felt at that point that our organization was well-positioned to weather something like a pandemic. We have quite a nice diversity in both geographic locations, vertical markets and a lot of customers spread over our different revenue bases.
“There was a sort of fear and panic that kicked in when we saw stuff happening around us, like California going into lockdowns. It took us a few days to get our arms around that. We were fortunate that our leadership structure is set up to be very local in nature. The offices that we call our Convergint Technology Centers, or CTCS, all have general managers that have a great deal of responsibility and they are quite autonomous. Each of those teams is able to jump into action and figure out what's happening in each region. We managed to quickly adjust to the requirements on a location-by-location basis, which allowed us to get our people back to work and servicing clients, and our clients are doing the same thing now.”
Adapt or Die
Mathes admits the business took a bit of a nosedive in the April-May timeframe relative to normal revenue numbers, but he reports that “we've seen business pick back up and continue to be on target for us to have an overall growth year.”
He adds that Convergint was also ahead of the technology curve, so it was able to accommodate the transition to a home workforce and a virtual business environment.
“Everybody recognizes that we already had the tools to adapt and had the infrastructure deployed to be able to support a virtual workforce. So, when our people asked to let them work from home, it was a seamless transition since we already had the software out there and the right equipment to quickly make the move into a virtual environment. That's allowed us to have some flexibility to continue to operate in this new normal if you will. Now we are able to approach the repopulation of our offices in a very thoughtful and methodical way,” Mathes says.
As the first wave of the COVID-19 crisis swept over the nation’s businesses and a second wave is predicted, it is paramount that executives act quickly to optimize their company’s resilience—rebalancing for risk and liquidity, while assessing opportunities for growth coming out of the downturn.
About the Author:
Steve Lasky is a 34-year veteran of the security publishing industry and multiple-award-winning journalist. He is currently the Editorial Director for the Endeavor Business Security Media Group, the world’s largest security media entity, serving more than 190,000 security professionals in print, interactive and events. It includes Security Technology Executive, Security Business and Locksmith Ledger International magazines, and SecurityInfoWatch.com, the most visited security web portal in the world. He can be reached at [email protected]
