Moving to a fee-for-service model provides many benefits.
Chances are your department or agency has made significant budget cuts in the last year and a half. It is also a good bet that more cuts are on the way. Whether or not budget reductions have impacted your AV program, you may want to start thinking about how you can do your part to improve efficiency and reduce costs. In government, being a proper steward of taxpayer dollars demands effective management of resources. One way to do that is by establishing an AV service center. Yes, I am suggesting moving to a fee-for-service model that reduces program-level funding and replaces it with project-level funding provided by your internal customers. To many, this may seem like a huge administrative hassle and the unknown factors can be daunting.
I vividly remember being downright afraid when I was told we were moving to a fee-for-service model about a year into my first job in the government AV industry. I was scared because I did not know how I was going to account for 100 percent of the time and materials it took to do my work. Once I got past the initial fear I settled down and started planning. I calculated costs and established rates that accounted for administrative overhead and other costs. To my surprise, business picked up and more departments started using my services. I’ll admit that there was more administrative work than before, but there was also more funding available to get better equipment and additional outsourced services like preventative maintenance.
A year later I moved on to another agency that did not have a service center model. I was back to a set budget and actually found myself frustrated that I couldn’t just go and build business to get more supplies, equipment, and services. I didn’t know it at the time, but I had become a service center convert. Another year went by and you can guess what happened. You got it — the director of the media center announced that we were moving to a feefor- service model. Most of my co-workers were stressed-out and concerned about their jobs. I tried to reassure them that this was not necessarily a bad thing, but I must admit I was still more than a little worried myself. I knew from personal experience that a service center could work, but that had been at a small facility with a one-person AV team (me). I wasn’t convinced it would work with a large program with a multi-million dollar annual budget.
My own fears were amplified by the culture of fear that was emerging, and things got pretty bad for a while. Our once fun jobs were being threatened by accountability and a results-oriented funding model. In retrospect, I realize that the anxiety was due to the combination of the unknown and the realization that we had to produce measurable results. That, and we had to do (yuck) paperwork. Despite our complaints, the leadership pressed forward and we established a service center. It went just fine and we grew as a result.
Fast forward to my next job, this time working for a major government contractor at their headquarters. I won’t bore you with the details since you already know what I am going to say. Of course we ended up establishing an AV service center. But this time it was a little different. I was part of the management team and was a vocal proponent of the change. I had learned enough from my last two experiences to know that it would work if we did it right. We did, and the team grew and developed.
When I signed on as a program manager at my current employer I immediately started developing a fee-for-service model. I knew it was the only way to grow the program and meet the needs of our customers. If we didn’t find a way to supplement our budget, the growing demand for things like desktop videoconferencing would obliterate our funding and would leave bills unpaid. It was in this role that I figured out my ideal balance between program budget and customer project funding. Here is the top ten list of what I discovered:
1. Get the basics funded. It is important to have a baseline budget if you are responsible for enterprise level AV systems. As much as I like fees for service at a project level, it is a lot easier to plan for recurring costs such as maintenance, licensing, and contract staff if these things are in a planned and funded annual budget.
2. Set the right rates. Fees for service should cover more than just the actual cost of equipment. While you may subsidize the costs if you have a baseline program budget, you need to account for a fair portion of the total cost. This does a few things. First, it helps to ensure that customers really need what they are getting by having them come up with the funds to pay for it. Next, it helps to cover the actual costs of doing business and allows you to properly pay your internal and external suppliers. Don’t forget to account for everything from IT transport services to recurring licensing and maintenance fees.
3. Take the time to document. You should document everything and update it regularly. This includes your rate sheet for services, policies, processes, terms of service, and much more.
4. Market your services. In large organizations, people often don’t know where to go to get the services they need. This can lead them to do things the wrong way, or not do them at all. Even if everyone knows the AV team supports conference center events, you should also let them know if you can help with things like integrating equipment into a new facility, supporting their team event, or providing rental and staging support for conferences and other off-site meetings.
5. Get the AV team on board. Any change can bring fear. As an AV technology manager, you have to help your government and contract staff through the transition. This starts before the transition occurs. You must make sure you are communicating openly and honestly. You also need to include them in the process and help them to understand the potential benefits.
6. Understand laws and contracts. Get to know your contracting officer’s representatives and find which contract vehicles can be used for the services your customers need. Everything doesn’t always fit in an existing contract, so identify what is needed, then work with the legal department and contracting office to find the best way to get it.
7. Build customizable packages. Many services from basic integration to event support can be presented to customers as easily customizable packages that account for the labor and equipment needed to perform the job.
8. Build a bench stock. This means having equipment on hand to rapidly support time-sensitive projects. This will also help when year-end spending raises the level of expectation for delivery of equipment and services.
9. Diversify. Develop a plan to expand into new services that your customers need. If you don’t currently offer things like engineering support, event productions, off-site videography and photography, and preventative maintenance, take the time to survey the customers to find out what they are looking for from your team.
10. Get help. Even if you have been involved in the establishment of a service before, you can always use help to make the best plans and decisions. Reach out to other agencies that are already using a fee-for-service model. Involve your team members, customers, suppliers, integrators, and any other stakeholders you can find.
Gary L. Hall, CTS-D, CTS-I, is a program management execution officer at the National-Geospatial Intelligence Agency (NGA) in Bethesda, MD. He is also an adjunct instructor at the InfoComm Academy and can be reached at garylhall@gmail.com. The views expressed in this article are those of the author and are in no way officially endorsed by NGA, and do not necessarily represent the views of the United States.