Meanwhile, NSCA has been working with ESPA (Electronic Systems Professional Alliance), which, through a curriculum program with technical colleges, is poised to train 500 students and grant them funding to earn C-EST certification, which Wilson says reflects an ideal entry-level AV, IT or life-safety technician.
The need for employees at that low end of the pay scale is often forgotten when AV folks wonder how they can compete with the IT industry’s higher pay scale.
“We just always forget that somebody has to put this [stuff] in,” he quips. “Those speakers didn’t just hang themselves and those security cameras didn’t fly up there. We still have to have people who are willing to get a little dirty.” Those positions, he adds, are often poised to climb up the company ladder.
Recurring Issue: Service Contracts
There’s no doubt that integrators are sick of hearing about the industry-wide need for integration firms to migrate from profiting on dwindling hardware margins to more of a managed services model.
The continuous dialog hasn’t translated to success selling service contracts. Only 27.5 percent of survey respondents say recurring revenue or service contracts make up more than 10 percent of their company’s total annual revenue, compared to over 50 percent that locked up at least a tenth of their revenue in 2013 — an indication that clients aren’t renewing contracts.
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PSNI’s Miller does think the industry is on board with selling service contracts. “But that recurring revenue stream is only recurring if each year the client perceives it’s worth renewing.” For integrators, success selling service contracts comes down to commitment, according to Doug Fortney of Cleveland-based Zenith Systems, which he says has assumed a “more resilient model” in part through recurring revenues.
“We’ve put a lot of effort into it. We now have the bandwidth to service all the accounts. When there is a big upswing cycle and when that maintenance becomes a challenge we can meet it.” Many firms can’t. “This industry is going to have to up their game in client-facing communication,” Miller says.
“It’s going to have to either be through software or in a client-facing portal, in metrics available to the client so it can more easily track integrated project status and service status. At some point for us to grow those service streams, we’re going to have to give some justification to that client.”
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In many ways, however, it’s not a fair fight when it comes to the industry struggling to migrate to service revenue, according to Wilson. “We’ve got an end user base who is fighting this. They’re of the belief that they should not have these things under contract and they should just take their chances on the service side.
“Then you’ve got us pushing for recurring revenue, and you’ve got the integrators stuck in the middle frustrated when they hear about companies that do have a great deal of recurring revenue,” Wilson continues.
