The Interview: Chris Price, DAS
The Interview: Chris Price, DAS – In the interview this month SEN’s John Adams visited Dicker’s Kurnell facility to chat with DAS GM Chris Price about the company’s plans for its new access and surveillance division.
JA: Where is the Dicker DAS business located?
CP: We are running the DC from Seven Hills and have 10 branches around the country , also with supporting warehouses. We will be moving the DAS DC into the main distribution centre at Kurnell in February 2023 .
JA: This is a huge site – is it Dicker’s only distribution centre in Australia?
CP: Yes, we have 1 national DC . This site is 26,000 square metres and there’s another 18,000 square metres becoming available next year. One of the interesting things about Dicker’s Kurnell facility is that it’s more than a distribution centre – it also has a full 3PL business, it also has customer space so integrators can do pre-commissioning and training, box consolidation, firmware upgrades, pre-configuration of devices, and even storage of spare parts.
JA: Will the DAS business ultimately be merged into the Dicker business, or will it remain separate?
CP: DAS is a stand-alone business under the Dicker umbrella – it shares distribution and administration, but it has a different business model focused on security installers and integrators.
JA: How long did it take to create Dicker Access & Surveillance?
CP: We didn’t buy Hills Australia, instead we took over responsibility for buildings, staff and stock. No systems came across – Instead, we had to move the business onto Dicker Systems– all in 6 weeks – including training of the new DAS staff. It was an interesting go-live, however we have moved passed integration phase and now operating as BAU.
JA: Dicker obviously saw an opportunity in the Hills’ business – what was it?
CP: The opportunity we saw relates to digital transformation in the electronic security industry – we can see the security industry integrating more IT products into the security solutions – and that’s Dicker’s core business, which creates a strong synergy.
JA: What is the Dicker Access & Surveillance strategy?
CP: We have a short-term strategy and a long-term strategy. The main goal in the short term really is service level. We need to build back a level of trust with customers that has been lost over the last 5 years.
So, the first year for us is about investing in the business – we want to be known for our high service levels and strong support. We aim to be seen as a trusted adviser and partner for supplying and selling security solutions.
The long-term strategy is based around some trends we believe will come true. We believe that security installers and integrators will increasingly sell more networked security solutions – and we want to supply the network hardware – the software – the cloud services, as well as electronic security components.
Having 100 IT vendors uniquely positions DAS to support digital transformation in the electronic security market. Importantly, we see installers and integrators expanding into IT networks – we don’t necessarily see IT resellers pushing into access control and surveillance. Having security licensing is a barrier – we don’t offer product to unlicensed IT resellers. We want to support security installers and integrators, and we have no intention of devaluing the market.
JA: This is the question many in the security industry have been asking – in IT distribution margins are under 10 per cent – are margins on the electronic security side going to sink to that level?
CP: No, they are not. There’s a direct relationship to the amount of complexity on an order that feeds into margin structure – volume IT margins and electronic security are different from this point of view. The DAS business runs 10 sites, all with showrooms, inventory, local sales teams and training centres. We support our vendors and customers with level 1 and level 2 post-sales support – in addition to pre-sales engineering and project teams.
So, the resources required to adequately service installers and integrators in the security industry are different to IT, so the margin structure must be different.
JA: Is it fair to say that some in the market don’t understand the nature of the Dicker business – instead they see the former Hills’ team and don’t realise that Dicker is a completely different animal with different capabilities, different – and considerable – strengths.
CP: There are some security distributors that are very specialized on a specific or niche technology. DAS is broad-based security distributor. Our advantage is clearly scale and size, with a strong focus on service level, and wide range of products and solutions. Dicker is so large and the synergies between IT and electronic security are so clear, that having Dicker adjacent will inevitably generate an additional momentum for DAS.
JA: Something you’ve done well is retained all of your suppliers…
CP: We either novated or created new contracts with 42 out of 43 Hills suppliers, which is extremely good. There was a level of concern that Security products would be fully integrated into the IT business, but that was never the plan. From a financing and credit perspective, we are one organization, but for sales, support and product management, DAS runs standalone.
JA: And you hung onto almost all your staff, too?
CP: We certainly did. We offered new contracts to 133 people, and we retained 126, which is one of the best things to have come out of the transaction, in my opinion.
Not only have we retained virtually the entire team, we’ve hired an additional 28 people since May to support the growth of the business and our ambitions.
JA: What about bolstering inventory – has that been a priority?
CP: It’s a huge priority given global supply challenges and we’ve been working hard to enhance our levels of stock nationally. When we started in May, we held an inventory of $A19 million, now inventory is around $36 million – that’s almost double the inventory available to security installers and integrators.
JA: You’re also upgrading the national branch network – a huge job with so many sites – what’s the plan there?
CP: Historically, the branch network has lacked investment, so we’ve got to fix that, even if it means moving to more suitable locations. And yes, the upgrade is a very big process for us. We’re going through all the sites and we’re standardising the vendor displays, refitting showrooms, providing more capacity for growth.
We are focusing on doing the simple things right – having inventory on the floor and treating the branch like a ‘retail for wholesale’, not just a collect counter. Re-fitting the branches, training the staff to a higher level of expertise, having more staff available, having more inventory – all these changes will generate further momentum.
JA: How important will that training component be?
CP: We’ve had training rooms in each state for a long time, and as part of these upgrades we’re expanding our training facilities and increasing our training staff. The training remit will be for a wider range of vendors – reintroducing more face-to-face training for installers and integrators around the country.
JA: In terms of bringing in new product on the security side have you identified any gaps in your offering?
CP: We want to grow – and we need our vendors to have the same ambition – our vendor partners need to be best in the market – so I think you will see continual adjustment from DAS on what we supply as we adjust to what the market needs.
JA: With the acquisition of the former Hills’ business, you got 5500 live integrator and installer accounts – if an opportunity came along to acquire another 5500 accounts would you take it?
CP: Are we open to further acquisitions? Sure, if they are complimentary and shortcut growth.
JA: Are you happy with where things are at this point in the process?
CP: Yes, we are 4 months in – we are moving out of the integration phase and now focused on business improvement and enhancement.
JA: Heading into 2023 what are you and the DAS team focused on?
CP: The focus is about getting the basics right – providing the service level to the installers and integrators so they can grow their own businesses.
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