Commercial Integrator January 2023 - 25
you, in healthcare, there is such a drive to
improve the patient experience that there's
a lot of money being spent, " he declares.
" You see it in movement of patient rooms,
lobbies, expanding visiting hours...you just
see a real push. And a lot of it is the fact that
we have so many people getting older and
that there is a need for new patient rooms. "
Remarking on the number of new hospitals
being built, he says, " Every one of them is
using technology to improve the patient
experience. "
LeBlanc adds that this phenomenon isn't
by any means exclusive to healthcare. " You
can say the same thing about just about
every market, " he says. Integrators that
are well positioned to meet their clients'
abundant and evolving needs are likely to
have a great 2023
.
Year-to-Year Revenues
Bullishness also reigns with regard to
integrator respondents' revenue forecasts.
When survey-takers look at projected fullyear
2022 revenue versus 2021 revenue,
76.6% of them indicate an up year, with
another 10.9% forecasting a flat 2022. Only
12.4% of integrators believe that 2022 will
end up having been a down year - a rather
remarkable statistic, given the challenges
we've taken pains to explore. What's more,
as integrators look to 2023 full-year revenue,
they evince even greater optimism.
Indeed, 82.4% of respondents believe this
will be an up year for their business, with another
11.8% forecasting flat revenue. Only
5.9% of survey takers believe this will be a
down year for them, and, of those, none
forecasts a revenue decline exceeding 10%.
Given the exogeneous factors that have
been weighing on integrators the last several
months, this revenue bullishness calls
out for examination. According to Wilson,
one explanation for frothy growth might be
the substantial weakness of 2020 and 2021
amid lockdowns, halted sitework and travel
encumbrances. Indeed, he notes that, if you
look back at pre-pandemic growth projections,
it's almost as though 2022 and 2023
have picked up where 2019 left off; by that
light, 2020 and 2021 could be described
as " lost years " for integration businesses.
Many of the projects put on hold during the
pandemic are back on track now, empowcommercialintegrator.com
ering
integrators to reclaim those revenues.
" The ones that survived [the pandemic era],
I think they're going to have a great future, "
Wilson declares.
But there are clearly crosscurrents and
contradictions, and those are on full display
in D-Tools Cloud data provided exclusively
to CI. According to D-Tools' CEO, Randy
Stearns, overall proposal activity industrywide
remains steady and has even increased
slightly year over year as compared
to 2021, but close rates were down 10% to
12% in the first half of 2022 and closer to
15% these past four months as compared to
the same period in 2021. This indicates that
buyers are exhibiting more caution. So, CI,
too, looks to the year ahead cautiously.
The Back End of Projects
Here's one good reason to remain cautious:
Even if integrators are busy doing lots of
projects, there's no assurance that those
projects are actually profitable. NSCA and
CI survey respondents indicate that their
project pipelines are flush, with 68.6% saying
their backlog is up as compared to this
time last year. (Notably, nearly half of those
who report that say that their backlog is up
significantly.) Thus, we can feel confident
that integrators' engineering, installation
and commissioning teams will have plenty
on their plates over the next 12 months. But
LeBlanc sounds the alarm that project profitability
is vulnerable, and integrators must be
proactive. " Look at this great revenue opportunity
as a call to action when it comes
to prioritizing back of house, " he advises.
In particular, LeBlanc urges integrators
to leverage the NSCA Financial Leadership
Council to shore up their competency in
navigating the supply chain, project scheduling,
cashflow projections, staffing decisions
and inventory management. Wilson
observes that, for years, our industry has
equated busyness with success; however,
they're not always the same thing.
Asked for a metric to evaluate the healthiness
of backlog, Wilson replies, " The anticipated
gross profit on that project versus
what the reality will be by the time you get
it in and billed. " He adds that integrators
need to spend time poring over work-inprogress
(WIP) reports and considering,
" Of that backlog that's sitting there, how
Projected 2022 Revenue as
Compared to 2021 Revenue
Up 11%+
24.8%
Up 6%-10%
27%
Up 1%-5%
24.8%
10.9%
Flat
Down 1%-5%
5.8%
Down 6%-10%
5.1%
Down 11%+
1.5%
Expected 2023
Revenue Trend
Up 11%+
24.3%
Up 6%-10%
34.6%
Up 1%-5%
23.5%
11.8%
Flat
Down 1%-5%
3.7%
Down 6%-10%
2.2%
Project Backlog as Compared
to the Same Time Last Year
32.8% Up Significantly
35.8% Up Slightly
10.2%
18.2%
Down Slightly
Same
2.9% Down Significantly
JANUARY 2023 Commercial Integrator 25
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Commercial Integrator January 2023
Table of Contents for the Digital Edition of Commercial Integrator January 2023
Commercial Integrator January 2023 - Cover1
Commercial Integrator January 2023 - Cover2
Commercial Integrator January 2023 - 1
Commercial Integrator January 2023 - 2
Commercial Integrator January 2023 - 3
Commercial Integrator January 2023 - 4
Commercial Integrator January 2023 - 5
Commercial Integrator January 2023 - 6
Commercial Integrator January 2023 - 7
Commercial Integrator January 2023 - 8
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Commercial Integrator January 2023 - Cover3
Commercial Integrator January 2023 - Cover4
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