3 Definitive Trends for Contract Hardware

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3 Definitive Trends for Contract Hardware

by Byron Whetstone, American Direct President and CEO

For some time, I have commented on the catalytic transformation in business from what Thomas Friedman has called the “4th Industrial Revolution” and another phrase he has coined as the “age of accelerations”. The reference is at once an allusion to the amazing changes that have taken place around mobile technology, but also a reference to the reality that, in 12 short years, all of our businesses are at risk of being disrupted. The contract hardware space is not any different. The purpose of this narrative is to share three specific trends so that we may manage to survive into the future as the leading source for total opening systems.

The leadership group at American Direct has, for the last few years, heard me ask the rhetorical question, “WHEN WAS THE LAST TIME YOU BOUGHT ANYTHING ONLINE?”

The purpose of the question is to illustrate the reality that we all are living in an online world. Our clients, our associates, and our families communicate with us electronically and virtually, but for many of us our businesses are very far from being online or from providing online/virtual services. My son Tyler who is an Industrial Engineer working for a Fortune 100 electronics manufacturer told me a few weeks ago “that he puts down the technology of his daily life when he goes to work to use OLD TECHNOLOGY.” That comment often defines the state of the contract hardware business.

Most of us have heard and noticed that many discussions and encouragements from DHI in the past few years have involved the impact of technology in the “contract hardware distribution” space. Commentary has focused on contract hardware distributors becoming commercial integrators and changing their business models to selling “total security solutions.”

“WHO OWNS THE DOOR?” is the pertinent question. This concept of a “total security solution” is a delusion. Because of current channel requirements, many of us cannot go to market with the newest electronic locking products without a partner. General contractors hire two subcontractors, not one, for the door opening. One for the mechanical and the other for the electronic components. Does that sound like a holistic approach to you?

Consider the options: A “Physical Access Control” software, a commercial integrator, or a designated wholesaler who can stand behind the technology we cannot use or have been deemed NOT SMART ENOUGH TO USE. With this in mind, here are the three comments about the future of our businesses.

1. We must have the ability to do physical mechanical hardware and physical access control at a minimum. This is table stakes; the minimum offering we must engage so as not to see a repeat of the loss of the hardware sales channel to the glazing subcontractors, now so many years ago. The door purveyor is now a decision provider about connectivity, communication, and control over the physical door opening.

2. We have no choice but to embrace the technology of the construction industry platforms and since we are intermediaries, we need to know and use software like Procore, Kahua, and PlanGrid to interface effectively in real-time with the general contractor, or even the owner, as technology is driving decisions. Knowledge is a secondary benefit if you cannot use the communication medium required by the client.

3. Finally, we require an awareness and embrace of the channel migrations underway all around the product offering which we have benefited from for 50+ years. Pre-install and turnkey furnish and install offerings are increasing and, in my opinion, we will have to embrace the reality of the channel migration to “Specialty Sub-Contractor” to allow for things like:

Installation – Turnkey package mandatory

Finalizing the trade scope gap, increasing scope requirements, and being required as the solution provider, not just the product supplier.

Electronic Access Control required to be integrated with the existing and newly emerging electronic locking products. Do you sell locks or solutions for security?

The channels are changing and the exclusivity of products by geography or market vertical are being displaced and are changing. The control of your expertise will require taking the risk and reaping the reward.

Take your business seriously and recognize that technology will change the way you do things forever.