Several Asian economies are growing at a rapid pace, raising the standards of life of people in this region. Despite a slight slowdown of late, Asia is expected to grow at a steady 5.4 percent in 2015-16, according to a report from the International Monetary Fund. Such growth in itself warrants an increase in deman
Several Asian economies are growing at a rapid pace, raising the standards of life of people in this region. Despite a slight slowdown of late, Asia is expected to grow at a steady 5.4 percent in 2015-16, according to a report from the International Monetary Fund.
Such growth in itself warrants an increase in demand for security solutions as people become more and more aware of safety concerns and seek to take proactive measures to counter vulnerabilities. This becomes all the more relevant in light of recent terrorism issues that have cast its shadow across the globe.
In this context, security systems integration becomes an important business segment in Asia. a&s recently talked to William Goh, Executive Director of ADP Tech, to get his views on this market and what to expect in the coming years.
a&s: How do you see demand for security systems integration in Asia in 2016?
Goh:The demand for security systems integration in Asia in 2016 will continue to grow. In view of the terrorist threats, public area security, infrastructure security and cyber securities should be the main drivers which demand for higher level of integration, usability, business continuity and off-site command and control.
a&s:How do you increase profit when price of equipment are declining?
Goh:The equipment price will continue to decline in year 2016; the profit will have to come from the effort of system design, integration and customization. The training services (to train the user on how to use the system) as well as the consulting services (to assist user in designing their BCP/DR plan as well as conducting rehearsals) will become another two profit sources, which in the past the client always thought that the system integrator can offer them free trainings.
a&s:Apart from declining equipment prices, what are the other major challenges in systems integration business in Asia?
Goh:Equipment price declining is one thing; nowadays, so many OEM suppliers from Mainland China, Taiwan and Korean, etc. are feeding similar products directly into the market almost every month. You sometimes really cannot tell which one is the right choice to the end users. Many system integrators don't really have enough resources on new product testing, hence, some function limitations will be found out only during project commissioning and the hand-over stage, which is too late and gives headache to both system integrators and their clients for sure.
a&s:Asian government projects are often known to be delayed. How can you protect your revenues in this context?
Goh:Yes, definitely. Government projects are usually long cycle projects and the progressive claim may also be delayed from clients. In some countries, government project through open tender is always awarded to the lowest price bidder, hence the project margin is very lean. Unless you have sufficient funds and you have really good relationship to recover the profit from subsequent variation orders, you should always prepare a diversified list which cannot depend on government project alone.
a&s:How do you see the strengths of international systems integrators vs. regional/local systems integrators?
Goh:International system integrators usually have sufficient funds as compared to local integrators, hence they can spend more on customer relationship by conducting events or other activities. International system integrators also have more overseas project experience so that they usually appear to be much more convincing during conceptual stage and POC stage. However, many clients have started to realize that local integrators have stable establishment and commitment which are critical to long-time project support and upgrades. International system integrators will lose out if they don't have a long-time localized strategy and always rely on “fly-in” consultants which can never be cost-effective.
a&s:What are the key criteria for being a good systems integrator right now, especially when the security market is still consolidating and evolving?
Goh:More effort in engaging the customers and delivering what the customer really wants. System integrators also need to continue to widen their knowledge so that they can offer a holistic solution from front-end to back-end. In Chinese, we say you can always win if you really know your customer.
a&s:How did your company expand beyond your home market?
Goh:We expand to regional markets through a very careful way. Security industry due to its nature is still very much in favor to their local integrators. You cannot really get decent projects if you do not spend time to study the local market and build up relationships there. To my experience, there is no short-cut, especially in the developing country. Our company does have a few unique expertise and we are still evaluating some opportunities in regional countries.
a&s:The ASEAN Economic Community was formed towards the end of last year. What impact do you expect this to have on demand for security systems integration in Southeast Asia?
Goh:Due to Internet technology and the recent terrorist threats, the security system to some extent has no more physical boundaries. Security systems must be able to be operated remotely through internet technology, hence, those cyber security threats are now being introduced into the physical security world too. The demand to have a healthy security system in both physical and logical worlds is at the historical height. The market need for system integrators who knows both sides should be double in year 2016.