Adapting to austerity

A lot can happen in six months. In December 2008, when this article last looked at the UK market, Gordon Innocent of RGB Communications told us we were entering a recession. Well, he was right and the ferocity and speed with which businesses in the UK were hit shocked many. However, equally surprising was how quickly the green shoots of recovery started to sprout. Doom mongers will tell you there’s worse to come and it’s true we’re not out of the woods yet, but most people and businesses will have seen some signs of hope and recovery.
Furthermore, to use a well-worn phrase, every cloud has a silver lining, and there are numerous opportunities out there for those who haven’t just sat around waiting for business to pick up over the past six months. Many have been proactive in adapting and seeking out business opportunities either unaffected or even created by recent seemingly catastrophic events.
"The economic climate is driving people to use our technologies," agrees Sarah Joyce director of sales and communications at the DRV Group, an audiovisual systems integrator based in the UK. DRV has operated in the UK since 1981 and is heavily involved in the corporate field as well as education and medical markets. The company is also very strong in entertainment and events and specialises in audio.
"We’re certainly still seeing plenty of business in the corporate sphere and the education contracts we get involved with are still going strong because we deal with projects that aren’t so much budget dependent. Also there’s a lot of business coming up in the specialist medical sphere," lists Joyce. Rather surprisingly she adds: "All of the markets are doing well but certainly where we’re doing a lot of our business is still in corporate and we’re still heavily involved with financial institutions.
"I think everybody talks doom and gloom about the current economic climate but we aren’t seeing a drop in business because external forces are actually prompting our client base, in legal and financial markets, to use new technology rather than get on a plane," she explains. "It’s always the arguments that are talked about but in this kind of climate, where one of the first things to be cut are travel budgets, people act on them. We’re seeing a lot of demand for video conferencing related products – either people are installing new systems or expanding and updating existing ones."
Digital signage is a market frequently mentioned as one that will prove attractive in a climate where people want to see a return on their money. However, Joyce argues, the signage market goes further than that. "Companies are looking more at digital signage, people are using their budgets cleverly and are still wanting to get their messages out to either internal staff or to external customers. That again is within a corporate environment not just retail where you would expect it."
Whilst Joyce hasn’t seen a halt in business she has seen greater influence from procurement departments and a change in how tenders are put out. "We’re all having to go through more negotiation rather than budgets being cut or there not being business out there. I think our customers are still going to be cautious as we (hopefully) come out of the recession. Not so much the specifiers and the users – the users are being driven to require the system and the services that we provide. I think we’re certainly seeing greater strength in purchasing and procurement departments, which are increasingly being held accountable for negotiating the best deal they feel they can.
"I think everybody is working more efficiently and effectively due to the recession. Everybody is looking at where they can add value to their current customer base and they’re doing a lot more account management to make sure they're looking after their customers. I think it is a time where everybody has to look creatively about how they operate."
Joyce says there’s still a big market for the usual players in the audiovisual industry to operate in. "Some are diversifying, some are looking into new markets and taking established solutions that they’ve got and have worked well and are tapping into different markets for them. It’s a time when everyone gets creative and clever."
In recent months the Government has embarked on a run of public spending; buying banks, offering cash for old cars to promote the purchase of new and providing loans for struggling organisations. The Government has been leaking money. But it’s also in a huge amount of debt and under heavy pressure to make savings. Whichever way you look at it you would expect its spending patterns to have changed. But what does this mean for the audiovisual industry?
Joyce disagrees. "[We’re] not seeing any changes as far as government funding goes [in health and education]," she says, adding that companies that work heavily in classrooms may well see peaks and troughs in business, for example demand for interactive whiteboards. "We’re working in areas where there is money because the Government or the NHS have recognised that this is a particular discipline where they want to improve or see people trained in so they’re still putting money aside," she explains.
And with the 2012 Olympics looming Joyce sees further opportunities on the horizon. "We are starting to get requests through from a number of consultants because of our expertise in audio," she says. "We have been approached by a number of consultants through the tender process and collaborate on bids with them." However, she warns, "I think it’s like any sort of big event like that, there’s the danger of everyone trying to jump on the bandwagon and every company goes out for the same tender. So we’re looking very closely at partnerships that we’ve got with either manufacturers, consultants or suppliers that might be operating in those areas. That way you’re very much operating from a position of greater strength.
"As far as the Olympics goes," Joyce continues, "there’s a lot more to come. The last couple of months we’ve started hearing more and started getting enquiries and people asking ‘Would you be interested in…’. Lots of things are coming up but I think there’s going to be an awful lot more. And I think with things like the Olympics there’s still going to be a mad dash at the end and an absolute splurge of work that will be required."
Joyce goes on to discuss training in the UK, saying DRV values the CTS, CTS-D and CTS-I qualifications from InfoComm. "That’s something we ensure all our engineers are trained on," she states. "What we also do as well, with a number of engineers we take on, is something similar to an apprentice scheme. We’ll take on people with aptitude who have come out of perhaps a media university and are looking to get involved in an engineering side and we’ll train them up ourselves. We also then guarantee our standards and our level and operation. We’ve got relationships with a good number of colleges where we know the levels they train to and we try and build these relationships locally so our employees are local to our venues and customer bases throughout the UK."
Joyce’s view of the UK market is very refreshing and demonstrates that there is still plenty of opportunity out there for companies willing to adapt and those that are flexible in their approach to obtaining business. Innovative organisations who have so far survived the recession in the UK should only find things get better as we start to climb out of the economic mess.