How SPOD can help deliver AV projects faster at lower cost

Professional AV has seen unprecedented change over the past few years due to many factors, including a global pandemic, supply chain constraints, reduced reliance on technology advancements and, of course, network convergence. The result is that professional AV has been flipped 180 degrees, from delivering low-volume, highly complex proprietary solutions to high-volume, low-complexity, non-proprietary solutions.

This has vast implications for any pro AV project team, including global pro AV integration partners and global pro AV distribution. In this article we will be exploring this, along with some guidelines that pro AV end users can follow to make the best enterprise-wide pro AV procurement and deployment decisions. But as end users adjust their operations, one of the biggest decisions they’ll need to make is who they work with on a local, regional, national, or global scale.

Network convergence and diminished JIT models change the integrator calculus
With professional AV’s accelerating adoption of the IP network (AV over IP), the desire and need for proprietary AV solutions is quickly becoming a past concern. One significant example would be proprietary legacy matrix AV switchers with finite video and audio channel constraints being replaced by non-proprietary IP network switches providing the same solution with virtually no audio or video constraints.

While this is great news for pro AV end users – non-proprietary solution adoption ultimately leads to greater solution variety and reduced cost – it’s obviously not great news for the legacy pro AV integration partner, since reduced costs can lead to reduced profit. Furthermore, as we all adjust to the new supply chain normal where Just In Time (JIT) inventory models quickly go the way of the dinosaur, it can be more important than ever to find global pro AV distribution partners with the supply chain expertise to provide solutions on a global scale.

The profitability issue for pro AV legacy players can further manifest in other ways, including new competitors due to unprecedented lower barriers of entry. IT, datacom and security integrators, who are all IP networking experts, now view pro AV as a profitable business expansion opportunity. And with expanded competition comes increased profit pressures.

Pro AV integration partners have had little choice but to accept these industry changes based on technology shifts, customer needs and desires. Today’s pro AV integrator has the choice of learning and gaining expertise with IP networking or face diminishing marketplace opportunities.

So, what can an integrator do to proactively address this project profitability challenge? They can become more efficient at what they do, take less time, reduce costs and, ultimately, recapture what would otherwise be lost profit (more on this later). To be sure, the right pro AV distribution partner can help make that a reality. This is why any global pro AV project team needs to get involved earlier and deeper with the end user customer.

High-volume, low-complexity AV projects don’t have to mean reduced profit
While traditional professional AV projects have become less complex, they’ve also increased in scope and volume. The need for integrators to find and work with distribution partners with demonstrated skills and services designed to increase project efficiencies, lower costs, and help increase integrator profit has never been greater. The questions any end user should be asking should now cover both the integrator and the associated distribution partner.

While AV project profit margins have always been, and will always be, under pressure, the right project team (integrator and distributor) can counter, and even overcome, these issues. End users should be seeking pro AV integrators and associated distribution partners with global supply chain, logistics and other time/cost-saving value-added expertise. Working with the right distribution partner allows the integrator to get what they need, where they need it (shipped to them or direct to the end user location), when they need it and how they need it to serve their end users more efficiently and profitably. Everybody wins.

Strategic point of distribution (SPOD) – Closer collaboration changes the profit outlook
Professional AV integrators have long relied on distributors’ sourcing capabilities to help keep projects on time and on budget. And now, they must ask their distribution partners to do even more. Beyond sourcing capabilities, the right distribution partner will also have supply-chain, logistics and other value-added expertise to profitably provide what’s needed for today’s larger global AV deployments, including increased transparency, seamless technology integration, highly skilled labour, optimized vendor utilisation, and even improved sustainability.

This new and more collaborative distribution model, dubbed strategic point of distribution (SPOD), is already helping professional AV integrators and distributors recapture formerly lost profit and deliver end-user projects faster and at lower cost. A key element of the SPOD model is increased upfront collaboration between all parties – distribution partner, integrator and end user – providing reduced costs, increased efficiencies, and enhanced project profit to everyone.

Through the SPOD model, the right pro AV distribution partner can also positively impact the integrator profit and loss (P&L) in a variety of ways, including working capital reductions, lower inventory costs and increased overall cashflow. This can happen via pre-provisioning, OpEx alternatives to what were formerly CapEx-only solutions, and shipping pre-tested, kitted and labeled hardware solutions directly to end user locations for faster, more efficient deployments.

Early collaboration – why it matters
Early involvement in any project – ideally, at the design phase – gives the distribution partner an advanced view of what products are needed, where they’re needed, when they’re needed and how they are needed.

This can help distributors get ahead of manufacturers’ lead times and leverage global scale, supply chain and logistics expertise, providing more efficient product sourcing and delivery. Integrators can then know what can be done and by when, enabling a more realistic project deployment calendar. Last, the end user also benefits because they have greater confidence that their project will come in on time and on, or even under, budget.

Value-added services increase efficiencies and profitability
To review, examples of value-added services any credible global professional AV distribution partner should offer include project staging, pre-provisioning, kitting, packaging, labelling, and DOA testing and, in some cases, providing an OpEx financial alternative for what would normally be a CapEx financial approach. This helps reduce the financial hoops any end user might have to jump through.

The right distribution partner can combine pre-tested components and technologies from multiple vendors into a single, ready-to-deploy kit that’s ready to plug and play. The kits are labelled with the installation location, so when hardware arrives on site, the integrator knows exactly where it goes and that all components work as intended and are ready to install. Again, because the kit has been pre-assembled, pre-provisioned and DOA tested, less installation labour and time are needed.

Where appropriate, OpEx solutions can augment or replace the need for capital expenditures with flexible subscriptions, covering hardware, 24/7 monitoring and upgrades when necessary. Importantly, there will also be less packaging waste to dispose of onsite and fewer line items to manage on purchase orders, because multiple items have been consolidated into a single kit.

Professional AV project transparency
As part of their expanded and earlier involvement through enhanced collaboration inherent to the SPOD approach, professional AV distribution partners should also be providing real-time project deployment transparency and reporting.

As professional AV projects have grown in scope and size, in some cases across multiple geographic boundaries, many professional AV distributors find it highly challenging to accurately track these activities.  But now, through a SPOD approach, supply chain, logistics and inventory can be centrally managed and tracked by the distribution partner. And integration partners can then share project status updates, as an additional value-add, with their end user customers, enabling comprehensive cradle-to-grave project tracking. The SPOD approach can even monitor the carbon impact of all supply chain activities.

 Adjustments on the fly
Not only can greater visibility help all parties follow what’s happening on a project, but it can also help them make crucial adjustments on the fly. They may see, for instance, that a product has a longer than anticipated lead time and, collectively, decide to order an alternative product that can be delivered faster.

Integration partners, through their global professional AV distribution partnerships, can even leverage product shipping data to potentially swap out certain products for alternatives that offer a better carbon footprint. This can be an important new factor, based on end user corporate ESG programs.

Lightening the load for integrators
The SPOD approach applied to global professional AV distribution and integration enables a more resilient and reliable supply chain, and can make projects more profitable. Integration partners will also likely appreciate how SPOD makes work easier and creates fewer project headaches. Consider:

• Kitting, pre-provisioning, and DOA testing services bring greater consistency and standardisation, which can be especially helpful when projects span facilities across multiple regions or countries.
• Greater visibility and reporting can also reduce confusion. And when a distributor knows which products will be needed for a project before they’re ordered, they can help review and consolidate vendors, simplifying projects, reducing costs and increasing overall project profitability.
• Integration partners enjoy better cash flow, reduced inventory costs, increased working capital and a healthier overall P & L.
• OpEx vs CapEx pro AV solutions reduce integration partner financial burdens. Specifically, less need for inventory translates to enhanced working capital prior to deployment.

A new direction for industry
The SPOD approach puts a greater emphasis on earlier, upfront collaboration among global professional AV project teams (i.e. integrators, distributors, and end users). It also creates a greater burden on any global pro AV distribution partner, challenging them to do more and be more accountable across the full project activity spectrum. We believe that this newer, more collaborative SPOD approach is where the global pro AV industry is heading. The right global pro AV distribution and integration partners already understand this – and now you do too.

Phil Langley is senior vice president of global enterprise AV and UCC at Wesco.