What is a Solution?

Securitas Security Solutions

What is a Solution?

Security Solutions is the part of our business where we operate with one contract which includes several services. Where possible this should be based on a single monthly fee. There must always be a component of technology installed at the customer site or a link to technology with part of the solution provided remotely from off site. The management and maintenance of the equipment should be under the control of Securitas. Security Solutions should be priced together as one service offering. The value of revenue to be reported as sales in Security Solutions should be all that relating to the site, or series of sites covered by the contract where the solution is being deployed, so including all of the guarding, the mobile and the price for the installed technology, maintenance, monitoring etc. The value of the technology part shall be of a reasonable minimum amount either by itself or in comparison to the total value of the contract.

Peter Karlstromer, about growing Solutions

In general the definition of a solution contract is according to the following:

    • a contract duration shall be 3 to 5 year
    • the operating margin generated shall be 10% or higher.
    • the equipment (Capex part) shall be depreciated over the contract duration
    • the Capex shall be at least 5% of the annual sales value of the contract (> 1% of sales value of a 5 year contract). Externally we have guided and said that 10-20% of the annual sales value should be the electronic security investment (that is the one-off capital expenditure at the outset of the contract for customer site equipment+subcontracting, excluding Maintenance and Monitoring)
    • the Capex should not exceed 25% of the yearly contract value. For smaller, mobile type of solution contracts, it is recognized there could be higher investment as a percentage of the annual sales value. Such contracts shall also have significantly higher operating margins, typically 20% and higher with contract duration still to be 3 to 5 years

How to sell Solutions?

However, in order to avoid false expectations or disappointment, it is crucial not to tell too quickly that Securitas can deliver or develop a certain product from A to Z. It is therefore important that you listen to your client in the first instance and ask as many questions as possible (a number of suggestions follow below).

Strategy

Operational

  • What could be the value of the total opportunity?
  • What is the strategic importance?
  • Is it an important client?
  • Can we expand later?
  • Is their current hardware/software end of life?
  • Are we talking with the DMU?
  • Are there competitors in the loop?
  • Do we have to connect to existing systems? If yes, which brand?
  • Is a conception needed (e.g. design camera location, …)
  • Is a site visit required?
  • What is their expected timing?
  • Can the client manage the cabling?
  • If CCTV
    • Is it for security purposes?
    • Is it for other purposes?
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  • Created

    August 20 , 2020

  • Latest modified

    October 19, 2020

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