One of the challenges that security distributors and systems integrators (SI) currently face is the increased popularity of low-cost products that offer razor-thin margins. Some of the largest manufacturers today prefer to compete on prices rather than on innovation, forcing their partners to compromise on their profit
One of the challenges that security distributors and systems integrators (SI) currently face is the increased popularity of low-cost products that offer razor-thin margins. Some of the largest manufacturers today prefer to compete on prices rather than on innovation, forcing their partners to compromise on their profits. Given that end users do not always realize the importance of quality over reduced costs, SIs especially, have to rethink their traditional approach to business.
a&s Asia recently interviewed some of the major SIs in Asia to know more about their perspectives on this issue. Most of them emphasized on service taking a more important role over products, arguing that regardless of how low product-prices be, the market will continue to need professional services.
“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,” said William Goh, Executive Director at ADP Tech. “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 the system integrator could offer free.”
Mary Ann Ortiz, Marketing Officer at Alcon Philippines, echoed similar sentiments as she shared her company's views on the matter.
“In Alcon, we believe that it's not always about the product but the service that comes with it,” Ortiz said. “Should the price of the equipment decline, so be it. If the product does not offer much margin but is still required by the market, sell it along with a great service. Together, the product and the service will speak for themselves leading to continuous business relationship and more chances to make-up for the losses.”
Some SIs also point to the importance of choosing their projects carefully. “We are prudent in the projects we take on such that we have the depth and breadth to deliver value to our customers' operational effectiveness,” said Danny Ng, VP Sales at Yatai Security & Communications, another of Bosch's partners.