I’m the head of European security at Johnson Controls, the global workplace solutions provider. In Europe, we manage 90 million Euros’ worth of security guarding contracts – all of them through suppliers, with more than half of those contracts running in the UK.
As a company, on an annual basis we run between two and eight major guarding tender procedures in the UK. We deal with five of the biggest and best known contractors, less often with others. We also manage guarding on behalf of a large number of clients, mostly Fortune 500/FTSE 100 operations.
Rob Parker (‘Intelligence must be on display!’, Letters To The Editor, SMT, July 2007) and Tim Whitfield (‘It’s simply not worth the risk!’, Guarding Watch, SMT, May 2007) make good points. However, the problem facing most buyers of guarding services – and one that guarding suppliers do not seem to address, or maybe have no answer to – is that, during the bid process, they make very similar claims regarding their respective benefits. They are thus asking buyers to choose between companies offering very similar solutions.
The reality is that, for the Top 20 or so companies, they have all attained a level of professionalism in their operations that makes them very similar in terms of structure, service delivery and even style. They all do the basics well enough.
The narrow margins that guarding companies have to operate on mean that, when all things are equal – as they so often are in terms of ability and managerial skills, etc – the only items they are really tendering for are margin and overhead.
Employment costs are fixed by TUPE. Administration and management costs will be similar for similarly structured organisations. Consequently, if all things are equal, it’s most often the lowest cost that wins, there being no other significant differentiator on which to make a choice.
The other side of the coin is that buyers – both procurement and security specialists – have also reached a level of professionalism such that they are usually very specific about what they want and leave little scope for ‘innovation’ (a much abused word) by the bidders. Therein lies the commoditisation of security guarding.
What the guarding suppliers need to find is a genuine differentiator. I have often asked bidders to tell me why they are the right company, and I receive a good answer with genuine conviction from each. It’s the same answer, though.
For the majority of buyers – who may conduct a guarding tender every three years or so – it’s probably easier to believe that one is better than another. However, speaking on behalf of a company that runs several tenders each year for different clients, we see the same thing more or less every time a bid is presented.
‘Value add’ is a difficult area. Genuine ‘value add’ isn’t about selling more services to the client, rather it is about providing – or doing – something useful or different that genuinely does add value. What can that be, though, given the narrow confines of the resources and margins available?
It is really the specifics, then, that provide the all-too-often missing spark to win a bid. They can be honed by research and intelligent thought. I think it’s a case of: “Over to you, Guarding Industry”.
Simon Dance
Head of Security (Europe)
Johnson Controls