Colin Etchells of Saville AV, reveals the challenges integrators face working on education projects due to a consortium model dictated by the manufacturer, and price remaining the predominant factor on many installs.
What are some of the challenges unique to education projects?
Inevitably we have a model that is now dictated by the manufacturers rather than the integrator being able to design a solution around what perhaps is best for that university. When projects are discussed most universities already have a direct relationship with the manufacturers so are well versed with products and roadmaps – in some cases more so than the integrator. As a result the integrator becomes nothing more than the delivery vehicle for the manufacturer to get his product into a project – effectively a route to market dictated by the university and the manufacturer.
There is no ‘value add’ in this and projects like this historically have been lead on price. Add the fact that most universities want the work installed during the summer period and you have an annual bottleneck – where manufacturers and integrators juggle a number of projects and because of the system, they then tender for more work than they can physically complete. If we then throw into the mix dealing with a main contractor on a new build – which are nearly always delayed – it can be one of the most stressful sectors in the AV industry.
I do sense that there is a change taking place and we will see a difference over the next few years.
Which technologies are you seeing an increased demand for in education?
Technologies are changing – 2016 has seen Saville installing large format LED screens for the first time in university lecture theatres as the COO and ROI comes down. Large screen format projection has increased with the introduction of laser and and lampless technologies and will probably continue over the next few years. The ongoing refresh of projection will see further changes as a move towards short throw and laser will drive this market. What is evident is a move away from projection in the smaller classroom spaces to LFD – if we couple this with a move towards interactive we see that this market will be strong for the next couple of years.
We don’t expect there to be significant growth but there will still be a large numbers in the UK, as the iPad generation grows older, which will drive the sector. It will be interesting to see if there is a significant slowdown in spend over the next few years and whether Bexit has an effect – many universities rely on their overseas students and their increased tuition fees to support their refurbishment projects and if there are significant drops in numbers this may see a slow down in spend.
Do you find education institutions more price conscious than other sectors?
With the consortiums controlling the purchasing process there is no real value that can be added by the integrator. In the past, and I have been around this sector for over 25 years, an integrator could help design and specify a system for a university safe in the knowledge, that provided the pricing wasn’t ridiculous, they would win the order after the tenders had been received. That loyalty and acceptance that consultative time/product demonstrations and any other hidden costs had to be somehow recouped meant a closer working relationship. We have seen over a number of years the manufacturers demonstrating and courting universities directly to get products specified on tenders.
The result is that when a tender is issued the integrator is nothing more than the delivery vehicle for the installation and can not really offer any added benefits to the design. These sales become more price driven, which has seen the prices discounted down to levels that are not sustainable over a period of time. We have seen some desperate pricing over the last two year especially with single digit margins akin to the computer industry. The result is a drop in quality and service and fewer numbers of companies for the universities to pick from. Companies like AVMI have made a conscious decision to pull back from education sales and Quadrant went bust as a direct result.
What factors are most commonly overlooked working on education projects?
The way the purchasing consortiums work means that an integrator has to pass a set of predetermined standards at the start of the contract. Once on the framework it is then down to each institution to tender their particular projects within this framework. Depending on the tender scoring mechanism, more often than not, a project is awarded on price. Most of the project work is condensed in to a three-month window between July and September. The way the majority of academic years run is August to July. This just doesn’t then work for the university or the integrator as projects are generally tendered late and as a consequence can then run into supply and delivery problems.
In addition, as the frameworks are only renewed every three or so years, there are different levels of competence of the integrators on the frameworks. Our industry is continually developing and we have a number of technical staff who are constantly training and re-training on new products and services. We as a company have obligations and commitments to certain manufacturers with regard training and competence is something that isn’t factored when completing tenders which are driven by price. The result can be substandard work that the manufacturers then have to support the institution directly to resolve issues created by lack of relevant due diligence from the consortium. This has increased four-fold over the last few years as AV and IT integration becomes the norm, but actually does not show the AV industry in a very good light.
Are you now undertaking a higher proportion of projects in education or corporate? And have you seen a marked change over the last few years?
We have had a measured approach to our educational business over the past five years. We work with clients that want to work with us and price is not the first determining factor when a project is awarded. Our educational business is growing year on year but has maintained at the same percentage of our overall business, which was our aim. We look at long-term relationships with universities and colleges who are keen to develop their AV strategy in a logical and controlled way. As a relationship and trust develops we feel we can introduce some quite unique and valuable insights into the industry, which is hard to put across in a formal tender situation. We are seeing institutions looking for a different approach outside of the frameworks to foster closer ties to one or a smaller number of integrators, further evidence that perhaps the consortium model needs a refresh.