This article originally appeared in the June 2023 issue of Security Business magazine. When sharing, don’t forget to mention Security Business magazine on LinkedIn and @SecBusinessMag on Twitter.
DALLAS – PSA-TEC’s State of the Integrator panel offered a fascinating look at some of the issues on the minds of security integrator executives and owners. Moderated by PSA CEO Matt Barnette, the panel included Jamie Vos, who in March sold his company, Security Solutions Northwest (SSNW) of Bellingham, Was., to Security 101; Dee Ann Harn, CEO of California-based RFI Enterprises; and LenelS2’s Ryan Kaltenbaugh.
Here's a quick look at some of the issues they discussed:
On manufacturers working directly with end-users:
Vos: There are new technologies emerging every day that we are so excited about, but the problem is manufacturers going direct – not necessarily selling direct but going directly to and educating the customer. If that's not your product, if that's not your technology, that can be a very scary thing. Even if it is, it can be a very scary thing. This model is working exceptionally well. We know that we don't have enough sales staff to be able to go to every single one of our clients and educate every single one of them on every technology that's out there. That's going to be a major challenge as we move forward. Will our customer be approached by us? Who will they be approached by? And will that lead to them still being my customer at the end of the day?
Harn: Well, with all the new technology and all of the opportunity for manufacturers to be in front of the customer, [the question is] how do we partner with [manufacturers] to effectively be with them to do that?
On workforce development:
Harn: How do we have a workforce that we can develop fast enough to be able to keep up with the technology that is just bombarding us so quickly – not just the workforce out in the field, but also the sales staff and your estimators. With all the different technology we are selling, whether it be on-prem or cloud, are we really prepared for that as a company? It's really interesting in the workforce fight for labor today, how do we attract people to our industry? And so that's where I'm seeing so much creativity and how to bring people to our industry, getting them excited about it. I took over ownership [of RFI] in 2011, and there were a lot of things that had to change. We have next-generation employees that are looking for more benefits, but different kind of benefits than we were set up for. And we needed to be prepared to adjust and change to move forward.
Kaltenbaugh: I think we're in this moment of transition where we are going to see a lot of companies that have been very comfortable for many years that know they are going to have to make drastic investments in shifting their businesses to a newer technology, hiring most likely more expensive people to take on the level of technology that's required. I think there's a lot of education and training that has to go on.
On new integration businesses in the industry:
Vos: Our space is still awesome. It's still incredible, and there is opportunity out there. If I were to start an integrator today though, I think it would look very different. We have a very well established company. [SSNW] was established in 1904, and we went through a lot of iterations. I would look at a very different way to go to market and be very selective on both customers and products. It would be a very different organization.
On lessons learned from the supply chain issues:
Kaltenbaugh: Looking back, the communication level around the actual shipments and data was critical to our specific channel. We had to get that data to boots on the ground – to the project managers and the customer service organizations within our community. I think we learned a lot a hell of a lot of what not to do and what to do in a creative way…but I think communication was probably the key.
Harn: I've seen our inventory go up significantly. That being said, I'm not sure there's too much we could have done differently, because it was so unknown. As an organization, we have five different offices and being able to really share within our own organization more effectively would have been something we could have done better if we had more time to plan. Right now what we're facing is how to get that inventory back to a managed level, but also be prepared for if there is something that happens here in the future. I think the biggest thing for everybody working on getting the supply to us is to communicate and get that best case. I know there was a lot of “being conservative” out there, and then when it flipped the other way, it was almost just as hard to react when products would come in early.
Vos: We learned that we used to be an inventory company. We used to keep inventory and we pulled from inventory we installed. Then we went to “just in time” and we found out that going back to being a company that has inventory was something we are really bad at. Just in time, frankly, was awesome being able to get product, and have it in a small warehouse for very short period of time. Now, all of a sudden we have a space issue. We are crawling over boxes. Where do the boxes go? We order a camera three times, we still can't find the camera. You have to learn to adapt…and I'm excited to see my team has now done it.
On integrator mergers and acquisitions:
Barnette: I did the informal math, and we had about six PSA owners sell their company in the last year. Most of those have worked out pretty well, although it is usually about a year or two before we know if the numbers are going to go up or down or stay stagnant.
Vos: Sometimes, acquisitions can really benefit smaller integrators [because] it leaves an opening as [the acquired company is] shifting their business focus. It leaves an opening for everybody to be able to get better at what they are doing and gain market share. In that way, it a good opportunity for integrators. National companies are needed, and there needs to be competition, and there needs to be good competition. I really do believe that overall [M&A] is very good for the industry.
Harn: It is disruptive, but in my opinion, disruption is good. Whether it's a large national coming in or mid-size integrator buying a small integrator, there's disruption that happens and it gets people out of their comfortable place. I don't see it as being entirely bad. What I see as an integrator on the receiving end of that is what can I do with it? How can I benefit that from my company? Can I go out there and service that customer more effectively while there's reshuffling going on? I think that disruption makes all of us stronger. It is about how you embrace the disruption.
Paul Rothman is Editor-in-Chief of Security Business magazine, a printed partner publication of SecurityInfoWatch.com. Access the current issue, archives and subscribe at www.securitybusinessmag.com.
