Adapt, Modernize or Go Extinct

by Dan Dunkel - President, New Era Associates

Published in Today's Systems Integrator

The title of this article can be read as a challenge to the executives in the physical security industry during this era of convergence. Certainly extinction is not an option, although business history documents failures from the buggy whip manufacturers of the early century to modern day high tech companies. Adapting "New" business models and integrating "modern" technical advancements is the preferred road to increased revenues.

The problem with this model is that the centerpiece of the strategy is change. As we know well many folks in organizations steadily and staunchly oppose anything new. In this business environment it is your executive leadership and middle management that wins the business battle. In the era of security convergence the winners recognize industry change early and execute quickly.

The competitive landscape in high tech has changed along with the technology cycle. I've sold through these changes over the last two decades. Years ago the major competitive advantage was the technology. Minicomputers replacing mainframes, workstations replacing minicomputers, enterprise servers, department servers, pc servers, and back to the enterprise storage through ever faster bridges, then routers, then fiber optics and now wireless. Selling was speeds, feeds, performance benchmarks, and cost savings. The one constant being R.O.I.

There was a golden rule in high tech sales back then, essentially all technology (and business process changes) originated in the centralized IT department. This didn't mean department budgets would not buy new or different technology, but the large enterprise deployments were introduced, evaluated by, and sold to IT. The new technologies (hardware and software) were behind the new processes for designing and producing the planes, trains, automobiles (or software) that the business sold.

Sometime not too long ago the technologies within the enterprise matured. The next best thing had to interoperate with the old reliable hardware. IBM used this paradigm shift in the high tech market to transform itself and the computer industry by introducing the services model.

With maturity came commodity products and lower margins, but also opportunity for   "new" leadership. Dell didn't use the old technology "leapfrog sales" rules, (in fact they devote less then 2% of revenues to R & D); they brought innovation to the supply chain.
They improved on an age-old process to generate new money. Great executive leadership and excellent middle management execution. The reward was exceptional growth and one of the hottest stocks ever seen.

The technology transition involving physical security and IT is a great opportunity for creative physical security firms to see accelerated growth and big profits through innovative strategies. High technology has matured; standards and commodity products are the rule of the day. The good news is that no industry has a lock on executive leadership. The winners will embrace change quickly and motivate their organizations to action. The "leaderless laggards" will be the new era buggy whip manufacturers and they deserve what they get. Like it or not extinction has its virtues and business evolution has always been about survival of the fittest. Is your leadership up to the task?