Q&A: Tim Griffin from DCC Technology on Exertis global expansion
Inavate EMEA editor Paul Milligan sat down with Tim Griffin, managing director of distributor Exertis ProAV parent company DCC Technology, on the day the company's big global expansion was announced.
you can read the news story in full here
Inavate: is this more a case of bringing everyone under the same branding umbrella than actual expansion?
Tim Griffin: It's a combination, there’s an element of bringing the various components of the group under a common branding. And obviously, there's benefit in doing that in terms of being able to communicate with the market. Not everyone really appreciates the scale, so it's important to have that common branding. But it's also about the platform that sits behind that in terms of being able to execute on global projects and reach on behalf of vendors on a global basis.
You’ve grown by picking up Stampede and Comm-Tec etc but they have their own way of doing things. Is the Exertis model to let those offices work as they have before? Or is there an Exertis model they will be asked to follow?
It's a balance, there is a local benefit of all the entities that we've acquired, who have built up equity in their local geography, so we don't want to lose any of that, or lose any of their ways of working. However, there are benefits from being able to share best practice, whether or not that's a vendor, operational, procurement, IT and brand. There's a host of common threads that are able to create leverage, and effectively string these pearls together, in terms of businesses, that we can then go to market and do so much more for both vendors and resellers and retailers. There's a lot of substance behind the sort of investment hypothesis, to the M&A story you described at the onset.
In terms of global reach are there any regions you are still looking at?
Global dominancy is not what we're necessarily looking for, but it is important to be able to provide a level of service wherever our customers are. And clearly, there are opportunities for us to still have a direct presence, as opposed to a partner presence. Through our supply chain services business, we're able to provide consistency of delivery around the world, but sometimes there will be a decision taken to bring that in-house. A number of our acquisitions have been informed by us having partnered with a company over some time for particular distribution requirements, and then ultimately, ends up within joining the family.
AV distribution is incredibly competitive, why do people choose Exertis? Its is down to cost - are you cheaper than everyone else? Is it service? What do your customers like about you?
I think the competitive landscape you describe is fairly typical of distribution, but I wouldn't necessarily characterise it purely to AV in terms of it being competitive.
You've got to have a point of differentiation and the whole Exertis brand, especially Exertis Ppr AV, the hypothesis around specialism is really around people. We believe that our customers enjoy speaking to an expert, we believe that they can gain leverage by allowing us to do the last mile configuration design work and so on, areas that perhaps they couldn't, and enables them to provide more solutions to their customers than they might otherwise be able to do if they purely focused around their own individual competencies.
The challenge of technology is always shifting, so if you're a relatively small reseller being able to stay relevant is a massive challenge. Working with us allows you to do more and focus on what you're good at. The concept of people in specialism is around having the scale to allow us to invest in those capabilities.
About five years ago distribution became a dirty word, and everyone was then calling themselves value added distributor instead. Will you be providing design specs, doing drawings, providing extra service as opposed to just selling speakers, projectors, etc.
If there wasn't valued be added why would you use us? The extent of that value is evolving. If you're an integrator you're looking to get more leverage out of your distributor, and that's what I meant by us being able to have those specialisms that can afford the integrator to focus on what they're good at, whether that's customer relationships, or another solution stack that they can focus on doing end to end, while we can focus on other parts that customers might require.
We're living in a sort of increasingly globalised world, organisations like the GPA and the PSNI are creating global network of integrators who are passing projects around the world. Does having a global presence help those organisations so you can supply five cities in one deal?
Increasingly we’re seeing projects transcend multi-geographies, multi-cities. The reality is even the smallest corporates today are probably in 2 or 3 countries, even if they've got 20 or 30 employees. Integrators, even if they're they've specialised around SMEs, will require a capability the ability to deliver in Rome. Having that capability is crucial for us. Some integrators have started to collaborate so that they can transcend that requirement, so it’s an important facet of the world we live in and being able to step into that is crucial.
How will you manage this new global presence? Will there be an European HQ, a North American HQ for example? Or will it just be offices all around the world?
The way this portfolio is organised is UK and Ireland and international, and then within each of those, we have MDs of geographies, within that we have specialists. So there is a global community of proAV business leaders that we bring together to be able to share best practice, drive operational effectiveness, and create leverage that enables us to execute on the projects we've just described.
Do you see any more consolidation in the market? Will there be more M&A activity as a response to what’s happened in the last year?
I think it's inevitable. Markets tend to polarise over time. You will see new specialists joining at the lower end, and you'll see consolidation at the top.
When you overlay that with an economic challenge, there will be companies that will need to seek alternative sources of funding. And it's inevitable that some will go out of business. And they may be acquired on that journey, or they may just disappear. So their customers will need to go elsewhere.