Case Study: From The Boardroom To The Living Room

But just as married couples can benefit from a little personal space, the husband-and-wife team has chosen to keep their work lives separate, on paper at least. While the two companies recently moved to shared office space in Salem, Mass., Total Home became a stand-alone legal entity about a year ago after operating as a division of the larger company since 2001—reflecting very real differences in project lengths, customer behavior and vendor relationship dynamics.

"One thing we noticed was the cycle time for home technology averages eight to 12 months, [from] inception to the actual sign-off on project completion, and the NENG cycle times are shorter, more like three to four months," says David Ducharme, CEO of the home integration business. The scope of work handled by Total Home makes that differential easy to understand. The five-person integration firm handles everything from lighting and residential climate control to home theater, audio entertainment systems and surveillance/security installations. Although client crossover is minimal, NENG leverages its corporate contacts to refer home networking projects to Total Home. "We had a lot of customers who wanted help at home, and it was really taking a lot of resources from the field," says Sarah Ducharme, who spearheads NENG's management. "Total Home was a great solution for us to move those customers over. We still could keep an eye on them, and they get taken care of really well on that side because that's what they focus on."

For Total Home, the NENG connection lends a deeper IT credibility with customers and vendors. "I didn't want someone who was focused on just a great theater system," says Annlouise T., a Total Home customer, explaining her decision to hire the company for a whole-home automation project.

Annlouise T. and her partner recently spent upward of $70,000 with Total Home to outfit their newly constructed million-dollar home in a Boston suburb. They also are considering an annual maintenance contract. The system includes nine televisions (not purchased through Total Home), a wireless network and surveillance cameras that overlook the pool and keep tabs on visitors along the driveway. The family moved into the home in May and is still pulling applications online, including irrigation, lighting and climate control.

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Because Annlouise T. and her partner often travel for business, one of the most valuable options was the ability to monitor the pool temperature and the home's power status remotely. Plans call for the installation of a media server that will orchestrate music distribution throughout the house. "I haven't even uncovered everything it does," Annlouise T. says.

Like many Total Home customers, Annlouise T. was introduced to the Ducharmes through their network integration business. She felt strongly that traditional audio/video integrators were too narrowly focused to handle a massive integration project. The team's biggest challenge, she says, was coordinating with the residential builders at critical steps of the project. Annlouise T., who's involved in commercial real estate, served as general contractor for her home.

Total Home's IT savvy also was important for Denis Herlihy, Northeast account representative for Klipsch Audio Technologies, an Indianapolis-based vendor of speaker and audio products, who has been working with Total Home since February. "In talking to Total Home, I got an understanding of where they were coming from and where they were going. They brought serious technologies to the table beyond the A/V part," Herlihy says. David Ducharme concentrates on about seven different lines. "I try to obviously get quality products, and I try to get products that are only available to the custom market, meaning custom electronics installers as opposed to stuff that you can just go down to Radio Shack and buy," he says. "This helps differentiate us from competitors, and there is still some margin that can be made in those products."

Besides Klipsch, Total Home represents three other companies that sell control systems and keypads for automating lights, fans, sprinklers, drapes, doors and so on: Vantage Controls, Orem, Utah; HomeLogic, Marblehead, Mass.; and Crestron Electronics, Rockleigh, N.J. Through NENG, Total Home also has access to technology from companies such as Check Point Software Technologies, GFI, SonicWall and Symantec for IT security; Cisco Systems and Linksys for networking; Microsoft and Novell for software; and Citrix Systems and Computer Associates International for remote-access and management applications.

One driver behind the Ducharmes' recent move was the need to build a demonstration space where they could better present home automation and integration solutions, as well as set up a small home theater to help clients, architects and designers get ideas. "Some clients will take your word for it, [saying], 'Whatever you want to do is fine with us,' " David Ducharme says. "But some like to see what exactly the idea is that they're going to be living with for the next 20 years of their life. It's almost like test-driving."

For a whole-house solution, Total Home's price tag can run from $40,000 to $50,000 on up to $200,000, with or without the entertainment component. A system that distributes audio throughout several rooms and provides some climate control options, for example, starts at $10,000 for a basic package. The average is closer to $40,000.

About half of Total Home's projects are in new construction, and the rest come from renovations. Margins are better for new construction because Total Home has more control over what's in the walls and the material being used, David Ducharme says.

Once an installation is complete, Total Home commits to cleaning up loose ends for the next 30 to 60 days, depending on the type of contract it has signed with the customer. For home theaters, the company offers ongoing calibration services. In addition, it encourages customers to arrange two- to three-year maintenance coverage that dovetails with various product warranties. This ensures that repair services are covered and gives the field team an opportunity to talk to homeowners about upgrades or new technologies they might consider adding. To keep its field-service costs down, Total Home offers a help-desk option that lets it access customers' systems remotely to troubleshoot problems.

Total Home's typical customer is 35 to 55 years old and wants the convenience of control and knowledge that his or her home is safe. Though many customers have read about their individual technology options, Ducharme's team stresses the total solution and surrounding services over any one hardware or software component. "A computer or computer-based product is installed on almost every project," David Ducharme says.

"Whether it be the main brains of the whole system—it could just be storing the audio, like an audio server, a video or DVD server as well."

That means it's easier for Total Home to configure a solution so that it alerts a homeowner via e-mail, phone or PDA when certain things happen, such as a security breach, a power outage or an incoming voice-mail message. With that openness comes risk, but David Ducharme believes his IT experience makes him qualified to rise to that challenge.

"I understand the whole IP, IT networking and computer functionality side of the business," he says. "I can understand when products are worthwhile and when they're not."