Just when we thought we had it all figured out, the annual Pivot to Profit conference caused us to take a serious look at the integration business model – again.
Business as usual is basically gone: That’s what we heard from groups of integrators as they participated in conversations, listened to presenters, and looked toward the future. Business isn’t bad – it’s just different. (And “Pivot” to Profit turned out to be a great name for this event.)
As approximately 200 industry professionals gathered in the Chicago area in late September to talk about these changing business models, one thing really woke up the audience: The trend of moving from capital expenditures toward operating expenditures with the technologies integrators offer. Just because our clients want our technology doesn’t mean they want (or have) to pay us for it upfront. They now expect more rapid upgrades and new methods of procurement. If we can’t give it to them, they’ll find someone who can.
NSCA isn’t suggesting that you abandon your traditional bid and design-build models. We are, however, suggesting that you complement these business units with more robust managed services divisions or business units. For many, that means transitioning from a break/fix approach to a managed-services style of offerings for clients.
We also aren’t saying that integrators should just become IT MSPs. These technology systems have to be installed by a qualified systems integration firm. At the backend of these integration projects lie amazing opportunities to serve clients better and build more profitable, sustainable businesses. The conversations with your clients need to start and end by offering different financing options.
One of the larger integration companies in attendance at Pivot to Profit this year commented that the event opened their eyes to what they need to do next – get an RMR model in place and find the right people to staff that program. While the cost of doing this is substantial, the cost of not doing it seems far worse. A comparative illustration shown by a presenter depicted profits earned over a three-year window from a traditional design-build transaction model vs. the subscription model. This was yet another wake-up call for integrators: RMR can be a very good way to pivot their businesses.
By all measures, Pivot to Profit was a smashing success. Several members have already signed up for training with some of the event’s sponsors and educators, and they’re moving quickly toward establishing their RMR models.
If you attended Pivot to Profit, and want to connect with some of the presenters or sponsors you met, let us know.
If you missed Pivot to Profit, and need help getting started with an RMR model, we’re happy to help.