No industry in the country has seen margins cut quite like the security industry. Anyone who operates within the security environment are victims of what in effect is a perfect storm. Cheap imports, suicidal pricing, the electrical industry, IP technology and mis-selling have all combined together, all at the same time in a way that may yet sink many. What makes things worse is there does not seem to be an answer to this. However lets look at each factor one by one and see if there is anything we can do as a group of professionals to restore our industry back to where it needs to be.
1) Cheap imports: Over the last 5 years we have seen DVR and camera prices decline at a rate that many have found difficult to adjust to. Lets be honest this is real deflation. The process to install a DVR is the same as is the wages of the engineer who installs it. The cost of his van has risen so has the price of fuel. Add to this all the red tape and health and safety he has to comply to before he even steps on site and you can see the problems starting to mount. As installers we are dealing with an increasingly knowledgeable clientele. Not that this is a problem in itself but the ease with which prices can be compared online leaves us all open to question about our prices.
2) Suicidal prices: So as prices drop some companies have passed these on. Buyers have keenly been seeking out installers who are effectively giving away security equipment to the detriment of the industry as whole. A vicious circle has now been created and this means margins have disappeared. Worse still some of the big FM companies have given away security in order to secure guarding or cleaning contracts leaving those who trade in security alone completely unable to compete.
3) Electricians: Electrical companies have always offered some competition to the security industry but now they are seeing security as a crucial part of their revenue stream. The lack of standards now being required by end users means electricians are easily picking up business.
4) IP technology: This has proved a bit a sticking point for CCTV installers. Although many have tried to embrace IP as a way forward, competing with IT companies has proved difficult. Pricing seems poles apart and the industry also needs more understanding of where and when to actually specify IP.
5) Mis-selling: Over the years we as an industry have done nothing to help ourselves. As competition has become greater temptation to spec lesser quality goods has become far too common.Standards have dropped and end users are not getting what they require or deserve from a CCTV system.
What then is the way forward? Well we need back up and help from our regulator. We need to act together as installers to keep prices at a level that will allow us all to survive this downturn and deflationary pressure that has undermined our margins. Quality should be a minimum requirement and low priced substandard goods need to be expelled from our industry. Its not long ago a DVR would cost upwards of £2000 . Now those days will never return but selling cheap is not the answer either. Keep up the standards of the industry act together, buy quality goods only and we may all come out of this in the end with everyone benefiting.