NSCA, a not-for-profit association representing the commercial integration industry, has released an updated Financial Analysis of the Industry report for 2021, providing information that systems integrators can use to benchmark and compare expenses, profits, sales and other data against industry peers of similar size and business focus.
The latest Financial Analysis of the Industry report details the industry’s performance based on data collected from 109 integration firms that participated in the 2021 survey in October and November 2020 (formerly known as the Cost of Doing Business survey).
NSCA worked with research firm FMI to develop the report, taking into account the fact that 2020 was the most difficult year many integrators have faced. For this reason, survey participants were asked to use the most recent financial report completed prior to March 2020; therefore, findings will not reflect the impact of the COVID-19 or PPP funding.
However, modifications were made to ensure that the survey reflected evolving industry conditions, including remote workforces and the pandemic’s impact on backlog.
The information in the Financial Analysis of the Industry provides an in-depth look at integrator operations and dynamics; it also helps NSCA members better understand the financial health of their companies (and their firm’s performance compared to others). In addition, the report includes verbatim responses about the biggest challenges integrators anticipate in future years.
“Analyzing the trends we uncovered in this research is valuable to anyone in a financial or strategic role within an integration company,” says Chuck Wilson, NSCA executive director.
“One of the more interesting metrics we revealed is the relationship between recurring and non-recurring sales. While the large majority of sales has always been derived from non-recurring sources, the average percentage of revenue derived from recurring sales made a healthy upswing from 10.83% in 2018 to 17.32%,” Wilson adds.
The 2021 report will also be integrated into the “Rethinking Finance, Legal, and HR Leadership” session at the 23rd Business & Leadership Conference (BLC) on Feb. 24-25. This could easily be the most important session attendees experience at BLC as the changing role of today’s CFO is discussed, according to the association.
To help integrators further break down the results of the 43-page report and leverage the research to improve business, NSCA is hosting a webinar on March 16. Attendees will learn how to use the Financial Analysis of the Industry to:
- Benchmark profitability of their company vs. the rest of the industry
- Benchmark their backlog in comparison to other companies
- Analyze financial trends among small, medium and large integrators
The report is free for NSCA members to download. The report can also be purchased by non-members for $399; non-members can become NSCA members and then receive the report as part of their membership.
This article originally appeared on our sister publication Security Sales & Integration‘s website.