The boom times may be over, but companies in automation and extra low voltage (ELV) industry can still thrive by outsourcing select functions, said Fayssal Daoud, chairman of Circuit Holding, an ELV automation systems consultancy.

Daoud was speaking on the opening day of PALME 2010, the region’s only trade event dedicated to professional lighting, audio, music, entertainment, audio visual and systems integration industry, explaining how companies could maximise profit margins by employing specialist contractors when undertaking projects.

These companies can outsource select functions with important downtime: Design, Schematic, programming, or commissioning for instance, Daoud pointed out.

“What you pay can be minimised as you only pay for what you use. If you count, for example, the cost of one outsourced working hour, you will find it comes very low compared to a permanently hired project manager’s,' he explained.
 
'Because during a slow economy, when you don’t have a lot of business, certain functions –depending on industry and nature of work- have a lot of down time, sitting there not working a full day. Therefore, it makes financial, as well as common, sense to outsource select jobs,” said Daoud during his presentation entitled 'Crisis-proof business models for system integrators.'

Although the concept of outsourcing has been around for many years, Daoud, says it was never thought of in and around the automation industry. This concept started to be applied few years back to the IT industry, but never found its way to the ELV market, Daoud stated.

“We have been trying to push the concept of outsourcing since the downturn took hold because it’s a very attractive business model, both in the current situation and will be for years to come. It has been very successful in the IT world and I see many parallels in the automation and AV system integration industry,” he stated.

“During the boom times, there were lots of projects to sustain the number of companies in the market but as the recession hit there were less to go round, therefore we recommend companies to specialise in one area and own that rather than trying to pitch for work across the board,” he added.

Daoud, who launched Circuit Gulf, the UAE arm of Egypt-based Circuit Holding at this week’s exhibition, also believes system integrators need to look to the healthcare and education sectors for future growth.

'Some $2 Trillion worth of projects is under way in the six GGC countries but the heyday for high-end luxury apartments and hospitality sectors are gone. As a result, we will see more investment in education and healthcare,' he remarked.

'There is a lot of room in the GCC for these sectors due to the fact that spending in the Mena region is just 2-4 per cent of the GDP compared to 8-14 per cent in Europe and North America,” said Daoud.

He also believes video conferencing, classroom broadcasting and archiving technologies can be effective in both sectors to enhance learning, while specifically eyeing healthcare diagnostics and classrooms as key areas of focus.

“We need to be pushing things like the importance of having multi-media classrooms, and innovative, tech savvy techniques to share and spread knowledge in our region. We should deeply consider the effect of our decisions today on the coming generations and enable them in all possible way to gain, benefit from, and spread back knowledge.” Daoud added.-TradeArabia News Service