4/9/2023 0 Comments Daily press endview![]() ![]() Large IntegratorsĬastillo sees inflation often having greater impacts on larger integrators. “They understand where it is coming from whereas on the commercial side, there is less tolerance depending on the market involved.” Small vs. “Our federal clients have a tolerance for some price increases,” Ruddo says. Many involve pre-negotiated contracts with pricing set in place, typically for years in advance however, Ruddo says certain government contracts allow for adjustments based on interest rates set by the Federal Reserve. IST counts large federal government agencies among its clients. We can’t always change those – we just make less margin.” “But we are a bit hampered on multi-year agreements. “We can charge more as prices increase for projects,” Nemerofsky says. Multi-year client agreements signed a year or more ago may negatively impact margins. “Being smarter and sharper about how you buy and measure all activities has been key for maintaining margins.” SAGE also looks for partners that provide the best pricing, extended terms and free shipping. Measuring employee utilization and efficiency is an essential part of the belt-tightening process. In its battle against inflation, Nemerofsky says SAGE looks to reduce or eliminate expenditures where necessary. Fortunately, it is starting to cool down a bit.” Throughout 2022, Ruddo says his vendors raised prices “monthly, weekly and sometimes daily. The three integrators say inflation has led to regular and often sizable price increases from vendors. “The latter is not a sustainable business model.” “We have to make up the difference through higher prices or live with lower profit margins,” Castillo says. Unless the rising costs are passed to clients, these increases impact an integrator’s profit margins. It is costing integrators more to fund virtually every aspect of their businesses – including employee wages, technology, insurance, janitorial services, warehousing, safety equipment, uniforms, trucks and more. To gain a greater perspective on how inflation impacts the industry, Security Business recently spoke with its exclusive three-member integrator panel, including Shaun Castillo, President of Preferred Technologies, John Nemerofsky, COO of SAGE Integration, and Michael Ruddo, chief strategy officer for IST, an Unlimited Technology Company. Virtually all large and small businesses are feeling the economic squeeze. A recession has followed all but one time the Fed has done so since 1961. Federal Reserve, including higher interest rates, aim to slow the economy and curb spiraling prices. Still, during January 2023, the consumer price index rose another 6.4%. In the U.S., month-to-month inflation peaked at 9.1% in June 2022. Many consumer and business products are reaching all-time high costs after two years of worldwide inflation. When sharing, don’t forget to mention Security Business magazine on LinkedIn and Twitter. This article originally appeared as the cover story in the March 2023 issue of Security Business magazine. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |