G4S Technology Is Future-Proofing With Its New Services Initiative
Filling out their service offerings should be key to many integrators forward-looking strategies, as evidenced by G4S Technology, SDM's 2013 Systems Integrator of the Year.
Systems integrators have been in a tough spot since the recession; construction projects, along with capital spending, have yet to return to anything close to pre-recession levels. That is why integrators are being pushed hard to develop their existing services and launch new services that will help them build a base of recurring revenues, to better balance revenue from integration projects.
“It’s no surprise to anybody in the integration industry that sequestration and the economy and government funding or lack thereof has had an impact on everybody in the industry. We’ve all suffered because of it, because our customers are suffering because of it — particularly in the local and state arena, because they rely so heavily on federal funds to help augment their builds or their projects, whether it be through grant funding or state funding. Everybody’s impacted by that,” explains Misty Stine, vice president of business development at Omaha, Neb.-based G4S Technology, SDM’s 2013 Systems Integrator of the Year. (Read the full story beginning on page 52.)
However, it can take a great amount of resources to build a services offering at a level that provides sufficient return. G4S Technology is doing it — the company rolled out its National Services Division this year and aims to triple revenues from services within 24 months. The strategy was months in the making and relies heavily on the company’s Monitoring Center with a sharp focus on video monitoring and other video-centric services. It also will leverage engineering and technical resources from the various regions where it operates and from strategic partners to meet the services needs of clients with national and global footprints.
“Like any other good company, you have to rely less on government spend and more on other avenues of revenue generation. One of the areas that we have been focused on is recurring revenue and that has been largely based on the large nationals and multi-nationals; the type of customers that we’re working with now as part of our acquisition by G4S. By and large, their customers are large Fortune 500 customers that have long-term maintenance requirements or services requirements, unlike a project-related type customer.
“In a critical infrastructure market, when you go out and build a system — for example, for a dam or a port — that project is typically a stand-alone project that you design and build and complete. Then it goes under warranty for a couple of years, and then maybe after that you pick up a maintenance agreement. In the commercial environment, typically you enter into a services agreement early on in the process, because they have multiple facilities across multiple geography, with multiple systems that need to be maintained and upgraded over time. We have found ourselves in that marketplace, which isn’t a market that we have found ourselves in in the past, because we were typical critical infrastructure integrators,” Stine described.
So in order to fulfill the objectives and meet the goals of the new National Services Division, G4S Technology — with its Adesta roots — is experiencing a shift in how it services the customer. But if all goes as planned, it will be a successful shift that leads the industry and other systems integrators into the security systems integration future.
Querying the largest security systems integrators in the industry, through SDM’s Top Systems Integrators Report over the past three years, shows that the portion of their total revenues from three different categories of service hasn’t increased a bit.
Clearly, not all systems integrators are noticing that the trend among customers moving to paying for security as an ongoing operating expense, as opposed to a one-time capital expense, is here to stay. G4S Technology has noticed and is adjusting its business model. That’s why they’re here for the long haul.