Small installers currently face multiple challenges – from competition from low cost products, DIY systems, breaches of the traditional security market by powerful new players and plenty more. Is there a way to survive and thrive in these challenging times?
FOR smaller installers, the security business is challenging. Not only is the market competitive internally, there’s competition from elsewhere, too – from big network and comms providers, as well as from DIY plug and play security solutions, that require little more than power-up in the way of installation. Simplicity has its downsides, after all. In this tumultuous environment it can be hard to see a clear path forward.
At the heart of the dilemma is not just the changes installers face now, it’s the changes in underlying infrastructure that are only just beginning to penetrate that will entirely alter the playing field. For instance, once cloud becomes widely accepted as a secure and reliable back end (which properly designed and delivered it certainly is), there will be fundamental changes in way providers deliver security and automation functionalities to their customers.
Layered over this is that when you combine 5G comms and cloud you create an ecosystem ripe for rampant evolution. It’s instructive that of the business models proposed at Sydney University of Technology’s MBA tech business hatchery this year, all but one was built around a mobile app.
According to Ian Ross, business unit manager at LSC, threats abound for installation businesses, but he argues there is hope for committed providers supported by dedicated suppliers.
“I think DIY security products as well as online retailers such as Amazon pose the biggest threats to installers,” Ross says. “Then there’s the non-compliant grey-market products, which pose a threat to the safety of projects as well as leaving installers open to hefty fines for installing non-compliant electrical equipment.
Something many installers are wrestling with is whether they can continue to depend on basic alarm and CCTV installations, or whether they must re-invent their businesses entirely. For Ross, traditional security vertical still have value but nothing can be taken for granted and developing the capacity to deliver new solutions is a vital part of growing in the future.
“I think installers that offer a quality product and excellent service will always have a place in the security industry,” he says. “However, re-inventing your business to include a broader range of products and services is an excellent way for installers to shield their business from the various threats the industry faces.”
Another core issue for installation businesses is trying to pin down the most lucrative areas for installers – not only now but into the future.
“Given that the CCTV and alarms sectors appear to be engaging in a race-to-the-bottom on price, small to medium access control is the most lucrative electronic security sector,” Ross explains. “For companies seeking a differentiator, superior customer service is an absolute no brainer.
“No matter how many DIY solutions enter the market, there will always be consumers that are willing to pay for security services from a competent and friendly security installer. Obviously, this needs to be backed up by a quality product and timely installation. From our point of view, finding a knowledgeable supplier like LSC Security Supplies that has a national reach is crucial to helping installers deliver this service.”
“As well as choosing a good supplier, installers also need to be thinking about fundamentals like OHS compliance and regulatory standards,” Ross says. “For instance, recent years have seen the industry plagued with a glut of low quality, non-compliant cable, putting end-users at risk – technicians need to ensure their cable is from an ACMA licensed and accredited cable manufacturing company – a manufacturer like DCS Cables. Joining the relevant peak body in their sector, such as the MLAA or ASIAL, is important, too.”
Ross argues installers should avoid buying products that are unsupported in the market and end users should insist they never do.
“Frankly, buying an unknown unsupported product buys you an uncertain future,” Ross explains. “Comparatively, buying from a factory-certified brand distributor often gives installers greater protection in the case of warranty and technical support. For example, LSC is a certified Dahua Technology distributor and we find that many customers are pleased to know that they can call up for some technical advice should anything go awry when on site.”
What will security installation business of the future will look? What areas of technology will it focus on? Where will its revenue come from? What will its skillsets be?
“Clearly the fundamental functionalities of security solutions will not change but who installs them and how they are installed certainly will,” Ross says. “As technologies converge across all platforms of the security industry, the future technician and security installation business will need to become multi-functional.
“What I mean by this is security systems of the future will operate intercoms, locking devices, alarms, CCTV, automation, seamlessly from one application. Many companies are currently working towards this but are struggling with expertise in all the required areas.”