From the very onset of the first annual Pivot to Profit conference last week in Dallas, we could sense that things are about to change. The need for integrators to “pivot” became evident as Intel’s David Buchholz demonstrated levels of innovation that could disrupt our current recurring monthly revenue (RMR) models. We quickly realized that attaching services to and around these new technology hubs will eventually become the integrator’s source for profitability.
The idea for the Pivot to Profit conference came from our annual Business & Leadership Conference (BLC); at the 2016 BLC, we all determined why we need to build our recurring revenue – but everyone wanted to know how this is most effectively accomplished. And that’s what we uncovered at Pivot to Profit.
We heard from subject-matter experts who shared personal success stories, as well as mistakes and lessons learned. Some of the most interesting points centered on financial models and alternative financing options, risk/reward factors of moving to managed services, company culture in these types of organizations, and the type of people it takes to create an RMR business.
To build a successful business unit that complements existing contracting and design/build work, it became obvious that integrators need to consider the financial implications of transforming to an RMR model. We heard from many financial experts about options available through NSCA’s affinity partners.
As preview of our future in the networked environment, Pivot to Profit put cybersecurity experts, cyber lawyers, former hackers, and other experts front and center to help integrators understand the liabilities associated with remote access to a client’s network and getting behind the firewall. The stories of liability and associated risk prevention measures we should implement were eye-opening.
Several key business strategies were developed based on sales compensation plans and the metrics used to measure success. The roadmap for transitioning to service-level agreements (SLAs) from loosely written service contracts was a big discussion. Developing the right organizational model, culture, and sales teams were some of the most valuable and appreciated topics.
Every attendee spent 10 minutes in a small group with each of NSCA’s 20 onsite affinity partners and innovation sponsors, including companies like Google, Avaya, Quantum, Stanley Healthcare, and Intel. On the way in, several attendees asked me what these companies were doing at an NSCA event. On the way out, however, these same people commented, “I had no idea that these companies have such an impact on my business.” Not only did Pivot to Profit lay out potential paths to recurring revenue, but also brought integrators up to speed on what the future looks like.
Hearing from industry peers is a great way to learn best practices, and Pivot to Profit was fortunate to have an amazing group willing to share information about what they do well (and the mistakes they made along the way) in terms of leadership, making new investments, structuring businesses for managed services models, and how to not take our eyes off product and system sales during this transformation.
With 175 attendees, Pivot to Profit was the perfect size for visiting with everyone and allowing for plenty of interaction. Great conversations and partnering concepts were developed throughout this event. The audience was very diverse in its areas of technology focus: security, life safety, IT, and AV integration companies were all represented, which made the networking even more interesting and valuable.
If you attended Pivot to Profit, we encourage you to review the presentations and share them with your team. If you need templates for the SLAs we discussed, or additional language for your existing agreements, let us know. You can also download many of these documents from the NSCA Essentials library.
Next, review and align your sales compensation plans. Make sure the managed services group has a compensation plan that supports driving new business.
Lastly, mark your calendars for the 19th annual Business & Leadership Conference, scheduled for March 2-4, 2017. We’ll build on lessons learned, as well as specific steps to take to achieve profitable recurring revenue. Innovation is happening quickly, and it’s certain to change existing revenue and profit models.
Many huge thanks to our partners at PSA Security and Synnex for providing support and arranging many of the subject-matter experts who spoke at this event. Pivot to Profit would not have been possible without them.
If you didn’t attend Pivot to Profit this year, we’ll be back next year. Stay tuned as we release more information. –Chuck Wilson, NSCA Executive Director