In a 2020 Pivot to Profit Series video interview, D-Tools CEO Randy Stearns offers best practices for integrators that are laser-focused on their bottom line as they navigate through the COVID-19 crisis and beyond.
Typical integration company revenues are down about 9% due to COVID-19. Some companies are struggling a lot more than that. No matter where you fall in terms of revenue, it’s extremely important to focus on the bottom line.
According to Randy Stearns, CEO at D-Tools, integrators can maintain their bottom line and compensate for revenue shortfall in two ways:
- Cut costs, which can be difficult due to fixed infrastructure costs
- Run a tighter ship
But, really, he acknowledges in a P2P Series interview, it requires a combination of both.
Stearns’ recommendations for 10 best practices to eke out every ounce of profit you can on projects:
- Create an accurate and comprehensive scope of work. Include your contract provisions (or exclusions). Without proper expectations being set and documented upfront, integrators open themselves up to making unanticipated corrections after the fact.
- Don’t underestimate labor. Be sure to review plans and specs thoroughly and assess implications relative to labor time; ask about site access, site conditions, project pace, reporting requirements, meeting schedules, etc. to ensure that, labor-wise, everything is taken into account. Don’t forget things like QC testing and warranty work.
- Consider extras like freight charges, rental equipment, storage, travel, etc.
- Avoid design oversights or silent killers that nickel-and-dime companies to death.
- Develop a project plan. Map out the details in a way that avoids inefficiencies, reduces return visits, makes the best use of your talent pool, synchronizes properly with other trades, etc.
- Consider potential project risks and develop risk-mitigation strategies. A good example in the systems integration world might be ordering spares if there if you know a certain part’s failure rate is high. Once the project gets underway, there’s a whole other set of best practices to follow.
- Capture all change orders. Never give away parts or provide free labor.
- Schedule only for the labor time required—no more. Don’t put guys on the job for two weeks if, by your estimation, they can complete the work in seven or eight days. It’s human nature to fill the time allotted, regardless of whether it’s needed.
- Perform exhaustive QC testing and efficiently manage the punchlist completion process.
- Hold a formal closeout meeting with all stakeholders to state that the project is complete and the warranty period has begun. Otherwise, project work somehow keeps rolling on with no end in sight (and continual return trips eating into the project’s profit dollars).
D-Tools is a sponsor of NSCA’s 2020 Pivot to Profit Virtual (2020 P2Pv) conference on Sept. 22-23. In this P2Pv Series video interview, Stearns goes deep, leveraging his days leading an integration firm and his perception as a business software provider to offer advice to integrators.
Watch the entire video interview above.
Randy Stearns is CEO at D-Tools. As a 2020 P2Pv sponsor, D-Tools is helping NSCA lead business transformation conversations.