David Ward – The growing threat of low margins and poor payment terms

 
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Monday, 5 December 2016

David Ward – The growing threat of low margins and poor payment terms

David Ward

David Ward of Ward Security looks at the (home grown) elephant in the room that is threatening the future health and development of the security industry. David Writes: “The security industry can – and should – be extremely proud of what it has achieved in recent decades. It has matured to become an industry that, on closer scrutiny, bears little resemblance to what it was only a few decades ago (even if clients and the general public don’t always recognise the full extent of the change). It has evolved according to changing market conditions to ensure it delivers a superior, all-encompassing offer that perfectly matches what clients want and need. It has embraced new technologies and new ways of working to deliver impressive efficiencies and even more impressive effectiveness, and in this respect it has pushed the evolution from old ways of working to new ways of working. And it has cleaned up its act, realising that there was a job to do in tackling reputational issues. In short, the industry has grown up and become far more professional.

“The problem with any profession is that the closer you are to the detail, and the more focussed you are on delivery means you can’t always see the bigger picture. To see it you need to step back, just as a painter has to step back from a canvass to see the entire picture they’ve created. And if you step back far enough and look at the security industry as a whole you can surely come to only one conclusion; that the industry we have moulded today is of a far greater quality and intrinsic value to what it was yesterday.

“So why do we undervalue it? Why do we undersell it? And, most important of all, why have we, as an industry, dropped the ball in making sure we receive adequate recognition and recompense for all the hard work we have done on behalf of our industry and our clients?

“There is a clear disparity between the offer we now deliver, and the commercial relationship we have with clients. While the service and offer has vastly improved, the way we do business has not, and when it comes to the transaction we may as well be back in the bad old days.

“The customer has been allowed to call the shots when it comes to the pricing of the service they receive because we have not been strong enough in explaining the difference between the service they got yesterday and the service they get today. But the reality is; that today’s much improved offer is essentially more expensive to deliver. Who could honestly think any different? Security staff are more skilled and therefore rightfully expect better salaries. Training and accreditation, as well much improved management systems and structures all require more resource to manage. The back office needed to support the improved service is now an expensive function for any company that takes the job seriously.

“To sustain the industry’s improved offer and support further industry-wide improvements we need to ensure we protect and improve margin, and insist on better payment terms. Unfortunately, as an industry we are failing to do this. The cost of failure is dramatic and in the worst cases we are seeing businesses go to the wall. It is increasingly hard to pay staff on time or to resource the back office.

“The security industry has reached a crossroads and needs to make a decision. Do we address this extremely important issue, or do we allow the problem to continue and wait to see the effect it has? It’s an issue that threatens the continued existence of the security industry we have built today, because we are now in an unsustainable situation. The likely outcome of a failure to address the issue will be increasing unprofitability, more company failures, no further evolution of our service, and even a possible sliding backwards towards the old days. Nobody wants that; not the customer, and certainly not the security industry.

“It will take an industry-wide effort to tackle this problem, and we need to be united on focussing on the future and our own sustainability. This is not a time for opportunism, because opportunism has got us to where we are today – working hard for not enough reward.”

Ward Security Website

Opinions expressed by contributors and commentators do not necessarily reflect the views of Infologue.com or Interconnective Limited.


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