AV Matters
The Stimson Group Newsletter
May 2010
Vol 4 Issue 5
In This Issue
ITRA at InfoComm
Middle East Report
Best Practices Series
About The Stimson Group
Quick Links
Howdy,

InfoComm is just two weeks away and I am gearing up for my jam-packed itinerary. For those of you on the fence about coming, let me put it this way: I guarantee that if you will engage for at least 2.5 days at the show you will either make a business contact, find a new product, or learn something that will more than pay for the trip!

In this month's AV Matters the AV Trends Survey returns. For those of you who missed it - my plan was to cut back on the number of surveys this year. If you are ready to go again, take the survey now. This time I am asking about business trends and will release the results in time for the show.

Many of you know that I got to visit Dubai In April. I will share some observations from that lucky trip.

My Best Practices column this month is about the ROI of Change. I was inspired to start this discussion by several projects this past year. When you put a cost on missed opportunities, people start paying attention.

Thank-you for taking the time to read and please feel free to forward to your friends. I do enjoy your comments and questions and respond to every one of them. So please feel free to send me an email.

Thanks for reading,
 
Tom Stimson, MBA CTSAcclaro Report Cover
My Direct Email
Website

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 ITRA visits InfoComm

I want to welcome my friends from the ITRA LogoInternational Technology Rental Association who will be attending InfoComm this year as a group. The ITRA is an association of dealers whose primary focus is Computer Technology, AV, Projection, Lighting. Kiosks, Communication, and Office Equipment rentals. Their members cover four continents including most of North America. They have a strong partner sub-rental and lead sharing system and a healthy appetite for new technology. I think they will enjoy the show and you will enjoy meeting them. Visit the ITRA website.

Last Chance to Register for InfoComm Classes!

Don't forget to attend one or both of my seminars:

Thursday, June 10
IS38 - Rental & Staging Business Survival Kit
8:00 a.m. - 10:00 a.m.
Room N255

IS49 - Systems Integration Business Survival Kit
10:30 AM - 12:00 PM
Room N255

Registration is required so sign up now.
 
My Trip to the Middle East
Great lessons for Integrators in North America from an emerging market

The Burj Khalifi from ground level
Dubai11
I had no idea what to expect from my visit to Dubai, UAE. The trip came about because InfoComm was exhibiting and training at the PALME Show. PALME has its roots in the DJ and Party market, but has expended to include exhibitors in Pro AV, Home Theater, and Corporate Events. I was impressed by the look and feel of the show and the variety of exhibitors was interesting. There was everything from laser shows to musical instruments to control systems and even large venue sound, lights, and rigging.

My first laser show in years
Palme Show
To say that Dubai is an international city is an understatement. Over 80% of the people living in the UAE are foreign nationals (ex-pats) and the ratio is even higher in Dubai. In one 24 hour
period I met business leaders from 20 different countries. Many ex-pats come for a year or two, but a surprising number of the people I met have made Dubai their home for many years. Only UAE citizens (Emiratis) can own (or sponsor) businesses. The exception is in a few free trade zones where foreigners can setup shop. A successful example of this is integrator Visionaire, whose owners not only showed me around the city, they introduced me to a member of the Royal Family.

And what a beautiful city it is. The architecture and attention to detail is unlike
This was my favorite building
Dubai City
anything I have seen. Everything is built to impress.
While the great building boom of the past few years has subsided, there is some construction activity going on today in Dubai. The most activity appears to be in the education sector. UAE universities are expanding at a rapid rate. Because only Emiratis can attend public colleges, there is a huge demand for private secondary education Dozens of universities from the US and Europe have setup campuses there. There is additional growth in residential spaces where the demand for affordable and luxury housing is still very strong.

Like Europe, Middle East integrators pursue both residential and commercial projects. The big difference in this region is the broad convergence of disciplines. Integrators are also experienced in structured cabling, security, IT networking, as well as everything audiovisual. It was not unusual to see control systems connected to HVAC, security monitoring, lighting, and occasionally - AV. I often heard the industry referred to as "Information and Communication Technology" or ICT. I think that's a good moniker.

Best-looking booth - It even had a water sculpture
Palme
I also made a day trip to Abu Dhabi with Terry Friesenborg, InfoComm's Senior VP of International Development. While Dubai is characterized by unbridled growth, Abu Dhabi has been executing a careful plan to simultaneously expand infrastructure while managing business and residential zoning. There we met with top integrator Federal Technologies, who graciously toured us through one of their enormous projects - a Royal Palace! And much of the local news was focused on a ten-year program to plan systematic construction based on the region's needs - clearly a response to the financial crisis in Dubai.

Dubai Mall closely resembles a shopping center in North America
Dubai Burger King
Back in Dubai, the PALME show was a great place to meet many InfoComm members. It was not unusual for a company owner to note how many CTS holders work at their firm. Training and certification were cited as critical tools for retaining employees, but also the impetus for employees to leave for jobs in other countries (for instance, in their homeland). Employment in UAE is contingent upon work visas, so there does not seem to be much migration of workers between competing companies.

What surprised me most about the market was the sophistication of the audiovisual companies and the size and scope of the projects. Even in a recession, the contracts I heard being discussed exceed the gross revenue
Dubai Mall - LED Everywhere!
Dubai Mall - LED Everywhere!
of 99% of AV integrators in North America. Most of these projects will play out over several years, but still - imagine having that kind of projected income and the security to pursue profitable projects in between? I was also surprised to find that service agreements or any kind of long-range support planning was almost non-existent. It's not for lack of trying on the part of the integrators that clearly understand the value service contracts. Culturally, buyers in the Middle East and Africa prefer single source suppliers but pay-as-you-go support. Smart integrators have capitalized on this by supplying on-site staff to manage the operation of their installations.
 


Best Practices Series
The ROI of Change
Stimson Square Logo
Understand the cost of time to reap huge returns on change

Time is money. In one three-day period recently I was able to identify redundant and outdated processes within 30 employee company that using management's conservative estimates would result in over $300,000 in savings per year - a large increase to their net profit. Their total investment after my project fees will be less than $50,000 over two years. Many of the changes were on management's radar already, they simply did not realize how much those issues were costing them. The biggest gains were the result of increases in available time that would allow sales to develop more business, project managers to handle multiple projects, and operations personnel to reduce overtime. 

I have always shown companies ways to be more efficient and how to improve service, but would often hear responses to my suggestions along the lines of "Great idea, that would save me some time," only to learn that the suggestion was never followed. "Oh well, it's just time." or "It would take too long to change, so we put it off until we're slow." I didn't understand why or how an obvious solution could be set aside, until I recalled what it was like to manage day-to-day. There just isn't enough time to do the things that "would be nice." However there was time to save money - if you could quantify the savings.

So I started putting a price on business outcomes. Let's start with the price of a little mistake. To calculate that cost, you need to price the solution. In integration and staging companies, overlooking a part on a pick list or order generally results in an unplanned delivery or shipment. For most companies I can show that the direct costs plus the opportunity cost of a delivery is around $300 (a shipment is roughly $200 - then you might still need to deliver it). Multiply that times the number of emergency deliveries per year and we are talking real money! Now, what is the incremental cost of double-checking (or triple-checking) orders and then, how many mistakes could these added steps catch?

The above example might be small potatoes for some companies, but it would be a mistake to look at ROI one change at a time. Most processes are intertwined and interdependent. For instance, by double-checking orders in the warehouse, who else will save time? At the same example company, we identified that 20% of sales time was spent making sure their orders were pulled correctly. By reducing order fulfillment mistakes we could cut that time in half (eventually all of it - but sales folks change slowly). What could a salesperson do with 10% more time? Hopefully develop more opportunities, capture more change orders, or maybe even write a better proposal. What would that be worth? In my example the increase in sales bandwidth was worth a potential 5.1% in revenue growth according to the Sales Manager. It was a pleasure to calculate the resulting net income using their revised profit percentage.

The method for identifying these valuable changes is a simple process evaluation I call A Peek Under the Hood (UTH). The UTH exercise involves employee interviews to identify the sales and delivery processes employed by the company. Combined with a study of the financial returns, UTH allows us to calculate the value of the recommendations that come out of the evaluation process. I have a 45 minute online presentation that I would be happy to share with your company that explains the process and details plus many more outcome examples. Contact me for more info.

You can download a few case studies of my projects at my website.

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Stimson PortraitAbout Thomas R. Stimson, MBA, CTS

Tom Stimson is celebrating over twenty-five years in the communications technology industry.  As a Consultant, Tom helps companies determine their next goal and then execute the plan that takes them there. For more information visit the website.

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