Companies across the globe are rushing to cut costs. What impact will it have on security?
As the
economic impact of COVID-19 become evident, economists expect the world to go through one of the worst recessions in history. In the current globalized world, most companies can't remain shielded entirely from an economic downturn.
“Currently, we have seen some slippage in the schedule, but we’re not anticipating a long-term impact at this time,” Christine Lanning, President of Integrated Security Technologies. “We are staying on top of our cash flow to make sure we can maintain operations in the coming months. Hawaii just started the ‘work from home, stay from home’ in April, so we are still in the early stages of this pandemic. Things could change, and we are planning for all contingencies.”
Christine Lanning, President,
Integrated Security
A necessary service
However, there is cause for optimism. Security is essential for any organization, and even when there is a financial slowdown, the need to protect assets and people remain crucial, if not more than usual.
“Right now, global economies are facing a situation of uncertainty as this virus continues to spread, and we too have been affected by that,” said Micah Carlson, Director of Marketing at Convergint Technologies. “However, the core services of our business—security, fire, and life safety systems—will always be an important need in our world today, and maybe even more so in our post-pandemic world.”
Negative impact on business
According to Brian Schwab, Consultant at S3SDC, while all new business has ceased and existing business has slowed considerably, they still need to pay their bills. Rent, utilities, and other overhead such as marketing must be continued during this slow period. It has placed companies under considerable financial pressure to reduce the services they can offer to customers and business partners to not operate at a substantial economic loss.
“However, the longer the restrictions against face-to-face client engagement is in effect, the more likely it will be that some services we offer will have to be cut for us to remain operational and available to current and potential future clients,” Schwab said. “For small businesses such as S3SDC, who already operate on thin profit margins to remain competitive, the financial impacts of a prolonged work slowdown such as this can (and may yet) be catastrophic.”
Bob Mesnik, President of Kintronics, gave similar comments. “The pandemic has created financial challenges,” Mesnik said. “We continue to see new leads, but people are certainly distracted because of the situation. Orders are delayed, but we expect to see them pick up after the end of this tough period.”
Future impact
SIs generally see the pandemic bringing in a host of
positive effects on business. Convergint, for instance, sees a lot of opportunities when it comes to helping customers navigate “the new normal” emerging from the COVID-19 crisis.
“We are positioned to help our customers leverage existing and future technology in a way that enables them to steer through the new policies and procedures that will be necessary due to the aftermath of this pandemic,” Carlson said.
Schwab concluded that before this pandemic, his company had been moving to add more security-as-a-service activities offered to our clients via the internet. This will allow them to provide a higher number of services and support to our clients at a reduced cost.
“We will continue to offer traditional business-to-business services, but these security-as-a-service activities are implemented, they will streamline our ability to improve and enhance how we can enhance our clients’ security risk management programs,” Schwab said.