Your browser is out-of-date!

Update your browser to view this website correctly. Update my browser now


Opinion: reforming expenditure

Mark Flowers CTS, strategic vendor manager at Ricoh Europe, explains how workspace as a service is changing the procurement model

For a long time, our industry has spoken about the convergence of AV and IT. In reality, we are now living in a world of IT consumerization, where personal and business devices coexist in the workplace. The question is: why do we continue to pay for our business devices up front, while our personal devices are broken down into bite sized monthly payments?

Technological steps
We have seen some significant technological steps forward over recent years. Plasma moved to LCD (which in turn is moving to OLED/QLED), while full HD is being replaced by UHD. Perhaps one of the most significant steps has been the introduction of the network into the AV space. We are now able to utilise existing network infrastructure to distribute our signals and, importantly, we’re able to embrace the IoT.

Until recently, we’ve relied on purpose built hardware devices with (sometimes) complicated coding to control and monitor our audio visual estates. Now, we have the ability to check the status and remotely control anything connected to the network, from anywhere in the world. This gives us the power to offer a truly managed service, tailored to our client’s needs. Gone are the days when a meeting starts 20 minutes late because of a technical challenge. Gone are the days where we spend an unnecessary amount of time diagnosing a fault, only to find that the power cable was disconnected.

Of course, electrical equipment can develop faults and products may, from time to time, need to be physically replaced. However, now we can change our reactive approach to a more proactive one. We can review how our products are performing, stay ahead of any meeting disrupting challenges, and help influence future technology decisions.

While the way that we support our customers has evolved, our initial interaction should remain the same. We still require the same discussion at the beginning of the process, where we review what our client hopes to achieve and, importantly, why. Only then can we move onto the technology conversation.

Once you have met the technical requirement, according to the application, we can discuss what services to ‘wrap around’ the solution. It’s important to identify the criticality of the environment so that you can align the Service Level Agreements. For example, while a meeting room can afford to be non-operational if an alternative is available, a digital signage network in a retail environment will likely require an immediate response.

Having identified the technology and created a managed service, we arrive at the topic of procurement. How a project is financed has a correlation with the size of the overall investment. We estimate that Operation Expenditure (OPEX) is on average five times Capital Expenditure (CAPEX), so let’s make use of the additional funds. By spreading the cost over a longer term, we can often afford to make decisions based on the right solution.

‘We’re changing the model from buying equipment for a room, to securing a Service Level Agreement’

Creating a Workspace as a Service model that utilises the OPEX and incorporates hardware, software, integration and managed services will allow us to define the overall project cost. All this before an order is placed. From here, we can start to break down the overall costs into something more palatable. For example, we can attribute a cost per room per month.  We can even surmise a cost per meeting, based on expected usage.

Ultimately, we’re changing the model from buying equipment for a room, to securing a Service Level Agreement.

From our perspective as the integrator, we’re able to closely follow the utilisation of technology over a longer period. It really ensures that we keep the technology conversation going, long after the initial installation, which helps frame the future decisions of how rooms are used and how technology plays a role. From the perspective of our distributors and vendors, it can be seen as a huge positive. By maximising the overall project budget, they’re likely to see bigger orders.

Returning to the original question – why do we pay for our business devices up front? The answer is we no longer need to.