The critical term there, however, is “well-positioned.” While many firms are on paths toward improving their positions and evolving with their customers, many are not. Those other firms are looking to get off at the next best exit.
It’s hard to blame those that see themselves in a losing battle. For smaller firms in particular it must feel like the odds are heavily against them since it’s increasingly large firms that are well-positioned.
“Traditionally in our industry size has mattered because it does provide more resources, more tools and more potential to invest in some of the complexities to which our industry is going,” says John Zettel, CEO of AVI-SPL.
PHOTOS: Inside the 2017 CI State of the Industry Report
The Tampa, Fla.-based firm, which brought two consecutive record-breaking quarters into 2016, continued ambitious growth throughout the year, he adds, crediting an infrastructure that allows the firm to offer focused service and oversight to 6,000 projects per year. Whitlock is growing revenue at a similarly breakneck speed.
“We’ve actually grown, over a three-year period, over 54 percent,” says executive VP Julian Phillips. For the Richmond, Va.-based firm the recent growth is the payoff from “a process of transforming our business model,” Phillips says.
Most integration firms’ models remain transaction based and he says Whitlock realized it could provide differentiation by shifting to a relationship model — “very much an enterprise relationship model.”
Whitlock’s strategy is one that would be difficult for small firms to execute. It’s targeting relatively large customers with technology strategies to deploy standards — not just locally, but nationally and globally.
“We very much targeted the large enterprise customer base,” Phillips says. “We’ve invested in those relationships, whereby not looking for just one hit, one single project. We’re actually looking atwhat that revenue is going to be over a long period of time.”
The process of becoming well-positioned to serve those clients was a five-year “journey,” Phillips says. “In the last two to three years we’ve actually started to see the real return on some of those investments. So part of that 54 percent growth is [from] the overall revenue from our largest customers growing significantly. We’re finding that those relationships last longer.”
There’s no doubt that a five-year journey toward repositioning a firm is difficult, but more reasonably attainable for a larger firm. Phillips has been widely quoted in his assessment of the integration industry that, at this point, it’s best to “get big, get niche or get out.”
What he means, he says, is “if you want to play in the enterprise space, you have to have a scalable organization that can serve your customers locally, nationally and globally. So are you big enough and can you scale to actually support those customers? Because that’s where they want you.”
Is Your Business Prepared for 2017?
NSCA’s Chuck Wilson and CI‘s Tom LeBlanc crunch industry survey results, identify where the industry stands, lay out imposing challenges and lay out strategies for success in 2017 and beyond during the 7th Annual Integration Business Outlook Presented by CI & NSCA.
So the question, of course, is whether or not there will continue to be a place for smaller organizations in the integration industry.
Kensington, Md.-based Casaplex is an example of a firm that’s clearly well-positioned from a system design standpoint. Its programming-rooted approach is resonating with customers’ IT departments and it has grown at a 20 percent year-over-year clip since 2012.
