Subcontracting: Part 1

It’s not lost on veteran AV pros that even as they need to make the best use of their client’s budget, in order to do that they need to make the best use of their own. That means allocating your firm’s funds, resources and expertise in a way that maximizes everything from effectiveness to profitability. Something that AV companies need to consider at some point is deciding which of their job functions to keep in house and which ones to subcontract out.

Under what circumstances should subcontracting be considered? Think of it in terms of the “make/buy decision.”

Normally, AV pros consider the make/buy in regards to resources like equipment, tools and hardware. The questions there being: Is there an off-the shelf solution that will do what we need or do we have to create it ourselves? In either case, which is more cost effective?

When looked at like that, deciding to subcontract certain functions is simply about deciding whether it makes more sense to hire outside help or to maintain it in-house.

Of course, like most things, there’s more to be considered than just dollars. Other factors need to be weighed on their merits as well, in order to arrive at the best decision.

Talking to veteran AV pros over the years, when it comes to choosing and working with subcontractors, the overarching theme is that it either works out well or poorly. Under what circumstances does it work well?

The most common successful subcontracting is simple install services. While AV pros don’t hesitate to deride low-cost trunk-slammers and the negative connotations of that category of competitor, there are exceptions that rise above low expectations.

Some install specialist subcontractors, often just two guys with a truck and their own tools, carve out a niche for themselves by taking the basic “hang and bang” and making an art-form out of it. In addition to their expertise, they maintain mounts, hardware and fasteners for every conceivable install scenario and can be counted on to perform their tasks on time and correctly.

AV pros who have a solid relationship with specialists like that speak highly of them, calling on them when needed.

Before an AV pro decides to start subcontracting out business functions it’s important to determine which functions are the ones they really need. One of my long-time acquaintances likes to joke that it’s a classic misunderstanding that a rookie AV company hires a Crestron programmer but actually needs a project manager.

As glib as that sounds, there’s a lot of sense there. The whole point of subcontracting is to enhance efficiency and reduce costs. Choosing poorly does neither and can actually make things worse.

That’s why it’s most common for AV firms to maintain a flexible attitude towards subcontracting, based upon the demands that are required for the projects that are underway. In aggregate, it’s typical for firms that do subcontract to have their staff complete 90 percent of all work that they do. Where they choose to sub-contract is for disciplines that are outside their core competencies, such as HVAC integration, acoustic modeling and panel installation, and most commonly electrical, security and telecom.

Often, the reason for that is conscious decision to focus on AV, and play to those strengths rather than try to be everything and do everything. Ask yourself, how often have you had a homeowner invite you into their new home to show off an alarm panel? I’ve never seen it happen.

It’s a common sentiment in residential AV that it’s better to be an expert in your field, and contract out for tasks that are outside that.

After examining the circumstances under which subcontracting works, it’s only fair to explore circumstances where it doesn’t, which we’ll tackle in the next installment.