When it comes to running a systems integration business, we all have phrases we love to hear. Some that immediately come to mind are, signed contract, margin rich, or design build. All of them exude a certain positivity integrators can get behind.
But in a business where there are more than a few things that can go wrong, there are some phrases that can bring fear to the hearts of even the most experienced integrator. These are the “Seven Dirty Words/Phrases For Integration:”
1. Bid. Perhaps no word wreaks of “not-profitable”more than bid work. Between the layers of contractors the integrator often has to work through, the slow pay and being the last on the job site, this is often a no-win proposition.
If bid work is where you want to live, be careful and read EVERYTHING. The bigger the project the shakier ground you may be walking on when it comes to potential losses.
2. Owner Furnished. I love it when the customer shows you the room full of old projectors or plasmas they want to put into their new rooms. Coupled with a few new pieces of gear and they have everything you need to do the install.
Be sure and test everything twice to make sure it works. Once you sign the okay to use their gear, it is in your hands. And when it doesn’t work, it is still in your hands.
3. Shared Labor. “We will pull the cable and put the equipment in the racks, can you do the rest?” This is the start of something really bad. When the customer is trying to save money by piecing together the install, it is never a good thing for the integrator.
If you decide to go down this road, you need rock solid agreements as to where there work ends and yours begin. Otherwise, making money will be in the rearview mirror for this project.
4. Extended Terms. For the customer that is. This is common when dealing with the biggest companies. They generate cash flow by extending out payments as long as possible, sometimes waiting to pay until the job is delivered 100 percent.
In some projects, getting to 100 percent starts to look like searching for your contact in the middle of a corn field.
5. Consultant. Unrelated to the part where these very smart engineers design systems to bid. This group also loves to specify “next gen” technologies, often before they are proven to work.
What makes it worse is the projects they specify are often tremendous in scope. Taking the newest tech on the biggest projects with the least margin is a dirty, dirty word in my book.
6. Charge Back. Often buried deep in the contracts is the potential for charge backs to be incurred by integrators if they do not meet project timelines. This wouldn’t be so bad if we were 100 percent in control, but in the world we live in we wait for electricians, carpeting, ceiling, drywall and everyone else to do their part.
So when the schedule gets compressed at the end, they love to hit up the integrator for restitution. Not cool and definitely a dirty word.
7. Trunk Slammer. The security guy, the drywall company or the CIO’s nephew also does home theaters. They said this project can be done for half of your price and they will come in at night and the weekend to do the work.
If you hear this, or any iteration of this, turn around and run, not walk, but full out sprint out of the building. There isn’t a penny to be made.
Daniel L. Newman currently serves as CEO of EOS, a new company focused on offering cloud-based management solutions for IT and A/V integrators. He has spent his entire career in various integration industry roles. Most recently, Newman was CEO of United Visual where he led all day to day operations for the 60-plus-year-old integrator.
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