While the health and safety of workers is of utmost importance during the COVID-19 pandemic, security companies must also focus on the health of their business, looking to both the short- and long-term effects it will have on their business and the industry as a whole.
- Short-term: Supply chain disruptions
Lockdowns have caused an inevitable disruption to security supply chains. Many manufacturers have temporarily suspended all production due to government regulations, and some have repurposed activities in favor of manufacturing equipment such as PPE (personal protective equipment) and ventilators. Export restrictions are also impacting the global supply chain.
Manufacturers across the world have had to examine how their products are made, sourced and delivered to customers in light of this situation.
To ensure the least amount of disruption, security companies are monitoring the supply chain from every angle. This includes rearranging transportation, working with multiple suppliers, sourcing new materials from non-impacted locations, and closely monitoring stock levels across its supply chains.
- Short-term: Decrease in demand and project delays
With supply chains disrupted, security projects are being delayed or postponed while customers and integrators wait for hardware products, especially video surveillance equipment, to be delivered.
The level of uncertainty is increasing and this will for sure have some impact on demand. As it typically takes several months to set up and develop a security project, it is too early to assess the consequences of the pandemic for the demand situation.
It is inevitable that there will be a decrease in demand for video surveillance products, simply because systems integrators will not be allowed to work inside clients’ buildings. It is expected to be temporary, though, with demand returning to normal levels and even increasing as lockdown measures are eased and businesses look for ways to safely reopen their doors.
- Too early to see long-term effects
The unknown and ever-changing nature of the COVID-19 pandemic makes it difficult to predict what the long-term effects on the security industry might be, but one thing industry players agree on is that the market is changing.
Environments, such as retail stores, are dealing with new guidelines and potentially dangerous situations, and that presents new challenges. Government entities are redirecting what their standard targets were to now focus on the safety of the public. But primarily, what we are seeing is that access to information and flexibility are critical. The ability to respond quickly is critical.
We see an elimination of the silos — between technologies, private and public sectors, and functions within organizations. We need to be able to deliver the data decision-makers need to respond faster, more effectively, and more efficiently. The elimination of these silos is a trend we’ve seen across the industry recently but is accelerating in light of COVID-19.
Unfortunately, not all security companies will make it out of the current crisis. It is probable a significant number of companies will not be able to sustain operations and will close permanently due to the pandemic.
Companies that were not financially sound prior to the outbreak will need to revisit their business models and cost bases to ensure survival of their operations. This sadly may see an upsurge in the number of business closures but will ultimately allow for acquisitions of contracts by the remaining companies.
- Where we go from here
One thing is for certain, COVID-19 has demonstrated a need for all organizations to modernize their overall operations, as well as place a significant amount of focus on business continuity plans. By taking a technology-centric approach, security players believe this can be achieved.
Adapted from a&s Magazine