#LetTheUBuyDirectFromYou
Mike Pedersen, CTS-D, CTS-I
Welcome to the Integrator Insights column! As the title implies, the hope is that this column will explore topics around audiovisual integration activities and audiovisual integrators, all through a Higher Ed AV lens. We’ll tackle both contracted integrators as well as discussions around in-house integrators. There will be best practices, business insights, thoughts on relationship building, and so much more. The theme for Higher Ed AV Media this month is “For the love of AV.” Well, one thing I can tell you is that I love audiovisual integration! It is literally the building block of our whole industry. I hope the column can get you loving integration, too! Without further ado, let’s dive in.
It might make sense for an initial column to define terms around integration, give some background on the subject, and generally just tee things up. Well, we are not exactly going to do that. Instead, I’m going to tackle a topic that is near and dear to many of us – the ability to buy hardware direct from manufacturers. Our friend and colleague Scott Tiner from Boston University wrote a column recently on this topic, and I’d like to start with a response to that column.
You can take a peek at my bio another time, but to provide some context, prior to joining Iowa State University I spent almost 19 years working at an audiovisual integration company. One of my primary roles was vendor relationship management. I had great relationships with a lot of manufacturers and had to (at least attempt to) understand their business and distribution strategies so we could develop a close working relationship. Another part of my role was to help develop pricing and estimates for our clients; this required me to understand the financial impacts of each deal and how and where the company was going to make or lose money.
Then, in the summer of 2018, I joined Iowa State University. All of a sudden, I was now a client of a number of audiovisual integration firms, including the company I had worked for previously. At the time I joined, the university was outsourcing almost 100% of the AV integration from large to small projects. The team was initially me and one extremely talented, personable, and completely overwhelmed technician, Spencer Braly. At first, I had no option but to continue using outside contractors for as much work as possible; we had enough on our hands doing AV support and maintenance as well as in-house project management for contracted projects.
A trend quickly materialized. We would get a request from a college or department for an audiovisual solution. We would get a quote from an integrator and send it to the client. If it was a large or complex enough system, they would generally accept the quote. If it was a smaller or more straight-forward solution, they would very often complain and balk at the price. A high percentage of those projects simply didn’t proceed forward. At that point, nobody was happy, the client didn’t get the solution they needed, the integrator didn’t get any work, and my team of two didn’t get any love from either. But let’s be clear here, the person I was most concerned about was the client. And the trouble was, I knew exactly how those systems were priced by the integrators; for the integrator, I had worked for, I literally developed the pricing spreadsheet used for every quote. That means I also knew how much it would cost us to do it in-house. I also knew what our own internal hardware pricing was through our existing contracts with B&H, CDW, and others. If we were going to have happy clients, especially for smaller projects, we had to create an in-house integration team. So we did. My next four hires were individuals with direct experience working for an audiovisual integration company. We established a fee-for-service labor rate based on the existing rules established by the university, and we started estimating projects to clients. The response was extremely positive. We also knew our limitations, if the scope of the project is beyond a $35,000-40,000 internal price point, we will still guide those projects to outside integrators, but smaller projects are now largely done in-house. And we can do it for around 30-40% less than similar projects that were being quoted to us. This is not a trivial saving.
And let’s be clear, we are every bit an integrator as many small independent integrators across the country. We completed 91 in-house projects in FY20. We have dozens of years of combined integration experience. We use D-Tools for our design and estimation work. We have CTS certifications. As an Extron shop, we have teammates with EAVA, NAV, ECS, ECP, and even EAP certifications. We have taken Biamp and Dante training. We stage our racks. We program our control systems. We keep up to date on the current AV news. And ISU is not alone. I know dozens of other higher education institutions that are equally qualified in-house integrators.
So that brings us to the topic at hand, buying direct. I believe my team, and higher ed AV teams qualified like our team, should absolutely be granted the privilege of buying direct from key manufacturers. We have the training, the certifications, and the qualifications.
In his article, Scott theorizes that selling direct to qualified in-house integrators could create a number of challenges for manufacturers. These concerns include the need for additional sales and customer service staff and potential changes in how much stock they have to maintain themselves versus being maintained by resellers. These are fair concerns, but I believe they are not significant enough to keep manufacturers from selling to us directly. As far as customer service, we buy components as box sales through integrators now. When we have a technical issue, we are not calling the integrator, we are calling the manufacturer directly already, just like we would do for items purchased from online resellers like CDW or B&H. The number of actual accounting or shipment issues we have that could be resolved by an intermediary reseller is incredibly small, and even then in many cases, I end up having to reach out to the manufacturer anyway to get the resolution we need. As far as stock goes, I can assure you the integrators we purchase through do not stock anything. It is all set up as a just-in-time delivery system. When I buy Extron, Biamp, or Shure items, they almost always come drop-shipped from the manufacturer now. Having worked as an integrator with close ties to manufacturers, in my professional opinion this would not be a heavy lift for them.
Later in the article, Scott writes, “I would argue that if a higher ed institution has an in-house person whose sole job is purchasing, tracking orders and taking inventory of equipment, the institution is not spending its money wisely. This is a service that should absolutely be provided by an integrator, and a dashboard should be available to you, showing you all these details 24/7. If you have a person whose job it is to maintain the central management (Fusion, GlobalViewer, etc.) servers, then you are not spending money in the right place. An integrator should be able to provide these services cheaper, more secure, and more scalable.” I respectfully disagree. We already have a whole procurement department that does purchasing and order tracking en masse for the university. We would not ask our science departments to outsource inventory tracking of their lab equipment, chemicals, and PPE. Our IT departments are asked to maintain an inventory of IT equipment on campus. And unless Scott is arguing for some type of fully-contracted AVaaS, I simply can’t imagine wanting someone else to maintain our Extron GVE management server when we are responsible for the day-to-day maintenance of the AV systems tracked in that server. These are all tasks that are firmly within our job responsibilities.
I suspect some of our differences in perspective revolve around the size of the institution. To be clear, what I am not saying is that every higher education institution should get dealer-direct pricing. I firmly believe there would need to be some requirements that would need to be met that show an institution really does have a qualified, certified, and capable in-house integration team that does a certain volume of projects. I would never be in favor of a college buying all their components at dealer pricing and then hiring an outside integrator just to install and program them. No, this would likely be a relatively select few institutions. But for those that qualify, let them buy direct. #LetTheUBuyDirectFromYou #InHouseIntegrators
As I close this first column, let me say that while I’m excited to see where this goes, this column will truly flourish if it covers the topics you would like to hear! Oh, those who know me know that I have no lack of opinions and things to discuss, but really I’d love to hear from all of you; what topics would you like to see us cover?
Get to know: Mike Pedersen
Mike Pedersen joined Iowa State University in the summer of 2018 as the Audiovisual Experience Manager. Mike has been working in the engineering industry for over 26 years. For the last 21 years, he has been focused on the professional audiovisual (AV) industry where he has become recognized as an expert. He holds both the Certified Technology Specialist (CTS) certifications in Design (CTS-D) and Installation (CTS-I); he is one of the approximately 520 people in the world to hold both certifications. In 2018, the Audiovisual and Integrated Experience Association (AVIXA), the primary industry association for professional AV, recognized Mike as CTS Holder of the Year. He currently serves as Chair of the Technology Manager’s Council and a member of the Certification Steering Committee for AVIXA. Mike is a founding member of the Higher Education Technology Managers Alliance (HETMA) and co-founder of the Big 12 Technology Manager’s Alliance.
At Iowa State, Mike leads a team responsible for maintaining the AV systems in over 200 general university classrooms. The Audiovisual Experience Team (AVXT) also assists with AV consulting, installation, and repairs in college and departmental spaces across the university. Mike spends extensive time meeting with individuals to find out how audiovisual systems can make them better in whatever role they serve.
Prior to joining Iowa State, Mike worked for the AV Engineering and Integration firm Mechdyne Corporation for almost 19 years. While at Mechdyne he served several roles including systems engineer, IT manager, manager of project engineering, research and development, and pre-sales engineering. He taught classes on AV extensively both inside and outside of Mechdyne. He has also previously worked for John Deere and Engineering Animation Incorporated (EAI).
Mike is an active volunteer in the community. He advocates extensively for Science, Technology, Engineering, and Mathematics (STEM) education. He is currently a governor appointee to the governor’s North Central Iowa Regional STEM Advisory Board. He has served as chair of the Project Lead the Way (PLTW) partnership team for the Marshalltown Community School District and on the advisory board for the Broadcasting/Digital Media program at Marshalltown Community College. He has also been very active in the churches he has attended, serving in many leadership roles including Elder and Technology Leader.
Mike is a member of the American Society of Mechanical Engineers (ASME) where he served as chair of the Central Iowa Section. Mike is a past invited participant to the National Security Forum (NSF.) In addition to the CTS certificates, Mike holds certificates in ITIL Foundation, Extron Audiovisual Associate (EAVA), and OSHA-10.
Mike is a 1994 graduate of Iowa State University with a Bachelor of Science degree with distinction in Mechanical Engineering and a minor in History.