Why does NSCA put such a focus on what IT VARs are doing, and the managed services provider business model that prevails in the IT space?
One question that NSCA often gets from integrators is, “It seems you are steering us towards becoming an IT VAR rather than an AV integration firm. Why is that?”
This issue actually came up a lot at the recent Pivot to Profit Conference, and is the topic of our video Question of the Week, with Chuck Wilson.
“Really the answer to that is, when we think about strategy for our members, and what direction they need to be heading, it’s almost like we’ve seen this before. We’ve seen the pathway that IT has gone down, and it’s starting to feel a lot like where AV, security, and life safety integrators are heading.”
“IT VARs saw product margin erosion. We are seeing that now. IT is seeing clients that are highly educated and already knowing what kind of solutions and products they want. We are seeing that now as well.”
“So we’re using their pathway as a model for how our members can start incorporating managed services into their business model. So turning your break-fix service department into a profit center a more profitable piece of business that’s a managed services company. We’re not saying to abandon what you’re doing in the bid market, or the design-build area, but we’re having you consider what it would be like to add a third business unit as a managed service provider.
Don’t abandon or disrupt your existing revenue streams, don’t give up the project-based work that you’re doing. Rather, make a slight pivot to say, “What if we added this managed services piece and started to allow customers to purchase equipment through different methods, such as a subscription model, or AV-as-a-Service.”
“So we’re not asking you to give up what you’re doing by any means. We’re asking you to consider expanding your business to include managed services as well,” Wilson concludes.
Watch the video for the full discussion: