SSI August 2011 by Bobit Business Media

August 2011 Vol. 33 No. 8

REDUCE FALSE ALARMS TO .19 Keep Police, Clients Happy CEOs’ Sales Strategies to

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August 2011 Vol. 33 No. 8

THE 2011

Bright Ideas ISSUE!

REDUCE FALSE ALARMS TO .19 Keep Police, Clients Happy CEOsâ&#x20AC;&#x2122; Sales Strategies to

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August 2011 CONTENTS Vol. 33, No. 8

In an exclusive roundtable, four leading CEOs assess the fortunes of 2011; potential of managed services; emerging RMR to increase customer stickiness; bringing customers measurable value; and getting the most out of your people and processes.

— See page 38

❮❮ Bright Ideas

38 CEOs: Services Make Clients Stick Like Glue

Four top integrator executives reveal how they execute strategic business plans that provide for any contingency. See how these companies are adapting to new technologies, services and revenue models that ensure stickiness with customers. By Scott Goldfine

◗ COLUMNS

8 Between Us Pros With Scott Goldfine

Hot sales force tips from top security vets.

18 Convergence Channel With Paul Boucherle

Overcoming challenges to selling the business value of security solutions.

46 Managers Aim to Buy Lower, Sell Higher

After years of internal austerity and profit erosion, integrators look externally to turn their fortunes. The Operations & Opportunities Report shows managers seek better deals on the goods they sell to curtail margin squeeze. Also, the best technologies, services, markets to exploit. By Scott Goldfine

54 COVER STORY: How Custom Alarm Cuts False Alarms

Proven techniques that cut false alarms and police dispatches are business as usual for Custom Alarm. The company’s assimilation of practices like two-call verification and following up on all false alarms helped it earn the 6th annual Police Dispatch Quality (PDQ) Award. By Scott Goldfine

60 Making the Move to Managed Access

Software-based managed access control services are providing installing security contractors respite from eroding margins and other business pressures. Pick up valuable insights from several companies that are already making the transition to this new paradigm. By Rodney Bosch

22 Tech Talk With Bob Dolph

Perimeter security and the four Ds: Deter, Detect, Delay and Deny.

24 Fire Side Chat With Al Colombo

An elevator fire alarm dilemma shows how existing codes can call for a workaround.

36 Monitoring Matters With Kevin Lehan Why line cards and contracts are key to maintaining a healthy business.

80 The Big Idea With Ron Davis

Security business can make for successful bedfellows.

84 Legal Briefing With Ken Kirschenbaum What you need to know about the threeday cancellation notice.

66 Handy Uses for Biometrics

Installing contractors are discovering that biometrics, once a much maligned technology segment, offer practical solutions to meet clients’ security needs. Learn how to eliminate keys or cards to reduce administrative costs. By Jennifer Toscano

◗ DEPARTMENTS

❮❮ Special Pullout Section

A1 Digital Video Systems Design for D.U.M.I.E.S, Part 3 of 4

Compression and Storage By Bob Wimmer 2

Cover photo by Scott Schoeberl/Olive Juice Studios

4 13 72 74 78 81

Security Exchange Industry Pulse The Essentials Ad Index Building Your Business MarketPlace

securitysales.com • AUGUST 2011

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Security Exchange Web Watch

RIGHT

securitysales.com

NOW ON

securitysales.com

Peggy Onstad Publisher, ext. 477

SSI TV

Al Colombo, Ron Davis, Bob Dolph, Steven Gibbs, Steve Payne, Bob Wimmer, Jeffrey Zwirn Contributing Writers

www.securitysales.com/SSITV Why just read about the latest news, trends and technology, installations, applications, products, and more when you can actually see it all in action via the wealth of exciting videos to be found on SSI TV? Aiming to become the security industry’s answer to YouTube, the content is presented under the same main categories as the site’s channels: Access Control; Business Management;

Fire/Life Safety; Intrusion; IP Video / Surveillance; Security Systems Integration; and Vertical Markets. Each main category is chockfull of relevant videos, all of which can be viewed instantaneously via a large, user-friendly interface and viewer. Some recent entries as of this writing include: “Iluminar Puts Its CCTV Security LED Lights to Work,” “Provident Security’s NightOwl Remote Video Catches 2 Burglars in the Act” and “SDA

Rodney Bosch Managing Editor, ext. 426

Scott Goldfine Editor-in-Chief 114 Chatworth Lane Mooresville, NC 28117 (704) 663-7125 Fax: (704) 663-7145 Ashley Willis Associate Editor, ext. 419

Sr. Production Manager Sarah Paredes, ext. 497 Art Director Margery Young Audience Marketing Manager Katie Fillingame

Security President Shandon Harbour Shares Best Practice Tips.” So be sure to make SSI TV part of your daily viewing! Submissions are also encouraged.

Staff E-mail addresses are firstname.lastname@security sales.com (e.g. scott.goldfine@securitysales.com) Contributors‘ E-mail addresses are secsales@bobit.com. HOW TO CONTACT ADVERTISING & MARKETING

■ West

Dynise Plaisance 3520 Challenger St. Torrance, CA 90503 (760) 519-5541 Fax: (310) 533-2502

WEB-O-METER

5 most-viewed news stories during June

■ East

Tara Schelling 2738 Furlong Road Doylestown, PA 18901 (215) 794-7015 Fax: (215) 794-7756

ADVERTISING SALES TERRITORIES

Tyco in the Hunt to Acquire Visonic

ADT Commercial Offers Hosted Video Solution for Retail Market

Top Notch Customer Service Helps N.Y. Integrator Win Access Control Contract

Study: Nearly Half of IT Executives Reported Cloud Service Breaches Last Year

Calif. Carbon Monoxide Detector Law Kicks in July 1

SECURITY SCANNER®

Security Scanner® Web Poll Question:

Classified-MarketPlace Ads Peggy Onstad, (310) 533-2477

Where do you most commonly come up with your best business-related ideas? QUIET, ALONE TIME (E.G. IN CAR, SHOWER)

AT DESK OR IN OFFICE

NETWORKING WITH COLLEAGUES

DURING STAFF MEETINGS

74% 10% 10% 3%

IN SEMINARS OR TRAINING

Security professionals apparently don’t share the sentiment expressed in the familiar song refrain, “Don’t want to be all by myself,” at least not insofar as thinking up their most surefire business ideas. So much for personal time. Nearly three in four respondents to June’s Web poll said solitary situations with minimal distractions is most conducive to generating their next winning work-related concept. Far behind at 10 percent apiece was being behind a desk or interacting with peers. Ironically, an activity sometimes designed to brainstorm ideas, staff meetings, barely registered a blip in the survey. Log onto securitysales.com to view SSI’s Security Scanner archives as well as cast your vote for the August question: To what extent will telecom companies offering security-related services eat into security companies’ business? BLOGS

www.securitysales.com/blog

Some of the things we’re talking about …

HOW TO GET YOUR NEWS TO US E-mail: secsales@bobit.com Mail: 3520 Challenger St., Torrance, CA 90503 Fax: (310) 533-2502 FOR SUBSCRIPTION INQUIRIES (888) 239-2455

For the latest news as it happens, sign up for SSI’s eControl Panel at www.securitysales.com

• Top Marketing Director Dishes Up Best Practices • How to Impress Clients During a Bad Installation Job • More on the Dolph Double Trap Circuit (DDT) • P/T/Z Control in an IP World • Report: Global Smartphone Sales to Exceed 800 Million Units in 2015 Engage in the conversation!

EDITORIAL ADVISORY BOARD Ed Bonifas, Alarm Detection Systems, Aurora, Ill. Bill Bozeman, PSA Security Network, Westminster, Colo. Shandon Harbour, SDA Security, San Diego Jim Henry, Henry Bros. Electronics, Fair Lawn, N.J. Michael Jagger, Provident Security, Vancouver, British Columbia, Canada John Jennings, Safeguard Security and Communications, Scottsdale, Ariz. Sandy Jones, Sandra Jones and Co., Chardon, Ohio J. Matthew Ladd, The Protection Bureau, Exton, Pa. Mike Miller, Moon Security Service, Pasco, Wash. Joe Nuccio, ASG Security, Beltsville, Md. Alan L. Pepper, Mitchell, Silberberg & Knupp LLP, Los Angeles Eric Yunag, Dakota Security Systems, Sioux Falls, S.D.

BOBIT BUSINESS MEDIA Edward J. Bobit, Chairman Ty F. Bobit, President & CEO (310) 533-2400 Printed in USA

Winner • 2005 Finalist • 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010

securitysales.com • AUGUST 2011

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Between Us Pros

May Your Sales Force Be With You

oday’s security customers expect — even demand — prompt, courteous and consultative service at a good price or guess what? Not only are they going to go elsewhere because there are myriad alternatives, worse they are going to badmouth your business. In this social net-

working age, the repercussions could cost you countless customers and thousands of dollars. More than ever, responsive, personalized attention is critical to earn trust, build loyalty and become a true partner in helping safeguard and manage clients’ facilities or homes. Establishing and maintaining this level of sales and customer management is an enormous challenge. Yes, it’s about working harder, but even more it’s about working smarter. Fortunately, while the complexion of the sales landscape has been shifting, technology has advanced right along with it. Increasingly, new sales & marketing techniques and tools are emerging to enable success, and make sense of what would otherwise be an overwhelming task. I moderated a panel on this topic at the recent ESX event in Charlotte, N.C. Rather than confine the information to that session’s 40 attendees, I wanted to extend the wisdom of three leading authorities: Jay Stuck (Securewatch 24), Mike Jagger (Provident Security) and Chris BenVau (Stanley CSS). What follows are their top tips, apropos for this, SSI’s annual Bright Ideas Issue.

Stuck’s Top 3 Sales Force Tips 1. It is essential for a sales leader to have a record of activities and key metrics for everyone in a sales organization. How many cold calls and customer appointments were there? What was the close rate? What was the average RMR of sold jobs? There are plenty of software tools available that can assist. 2. It’s a digital world today; your sales organization similarly should be digital. E-contracts, instant quotes for customers — using technology can set your sales organization apart from the competition. 3. Using the Web for customer service applications, social media for lead generation, and organic and search engine optimization for your company is not a luxury you “will get around to someday” — it’s essential for doing business in the 21st century.

By Scott Goldfine scott.goldfine@ securitysales.com

stantial time and investment. Get senior leadership buy-in and support prior to implementing. Agree in advance on key objectives and metrics to measure program success. Regularly evaluate ongoing feedback of the results. 2. Adoption of a CRM can be difficult as some sales professionals resist change. To facilitate, embed your estimation tool inside the CRM; avoid separate processes for job quotation and activity reporting. This will also give you more accurate data on sales quotes generated, proposal funnels and close ratios. 3. Even after everyone embraces the new tool, there will be questions regarding the use, rules and potential of the CRM. Consider investing in an inside support administrator. Otherwise you may face partial implementation or pricey outsourcing.

Jagger’s Top 3 Sales Force Tips 1. Use technology for good, not evil. We’ve automated wherever possible, but never at the expense of client interaction. We’ve used digital contracts, but never an automated phone tree. We’ve automated our dispatch to get alarm signals to response staff’s Blackberrys in 4 seconds. 2. Focus on employee experience to improve client experience. We strive to eliminate waste and frustration within our company, including going paperless. We have no filing cabinets, paper contracts, paper invoices or statements, or paper-based employee forms — it’s all digital. We’ve also developed in-house wikis to replace printed procedure manuals. We have scanners at all desks, and use justthebill.com for expense/receipt tracking and GoogleSites for our wikis. 3. Leverage social media. We use blogs and Twitter to help our clients and supporters get our message out. Our strategy is educating people about how alarms work, their limitations and how best to protect your home or business from burglary. The key to social media is it needs to be genuine and honest. ■

BenVau’s Top 3 Sales Force Tips 1. Deployment of a customer relationship management (CRM) system, such as salesforce.com, can require sub8

Editor-in-Chief Scott Goldfine has spent more than 12 years with SECURITY SALES & INTEGRATION. He can be reached at (704) 663-7125 or scott.goldfine@securitysales.com.

securitysales.com • AUGUST 2011

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Industry Pulse In Depth

ESA: Federal Background Check Law Priority No. 1

©iStockphoto.com/Courtney Keating

WASHINGTON — The Electronic Security Association’s (ESA) top legislative priority this year is to secure passage of a law that would permit installing security contractors to access the FBI’s federal background check database. Two versions of the “Electronic Life Safety and Security Systems Federal Background Check Act of 2011” are up for consideration in Congress. In

The Electronic Security Association (ESA) is pursuing a law that would give installing firms access to the federal background check database. Although many groups fail each year to gain access to the database, ESA’s proposed bill is considered to have strong congressional support.

the Senate, S. 1319 was introduced in June by Sen. Charles Schumer, D-N.Y. Rep. Blaine Luetkemeyer, R-Mo., introduced H.R. 1331 in the House in April. The legislation would direct the Attorney General to permit installing security, monitoring and fire/life-safety companies to access criminal history records from the National Crime Information Center (NCIC). “Congress must authorize private industry groups to be able to have that access. That is why this bill is needed,” says John Chwat, ESA’s director of Government Relations. “The last group to [gain authorization] was the private security guard industry almost seven years ago.”

ESA has lobbied for about three years to pass similar legislation, which has stalled each time. The association maintains industry employees should undergo criminal background checks, considering the thousands of workers who each day enter homes, schools, businesses, critical infrastructure and other sensitive sites. Although some states do require background checks to license industry employees, about 18 states have no such requirement. Access to the NCIC would be an especially valuable tool for an employer in those states that don’t require an employee to be licensed, Chwat says. “For example, in Vermont or Ohio or Pennsylvania where the industry is trying to get licensing at the state level, this background check component permits them to be able to use the federal approach in securing passage of their state licensing bill,” he says. Allowing direct employer access to the NCIC has long proven difficult. Each year various private groups and industries lobby and ultimately fail in their legislative efforts. Industries that have been successful include banks, flight schools and armored car companies. The Department of Justice [DoJ] and privacy advocates have raised concerns that opening the NCIC more broadly could result in discriminatory decisions by employers that deny a job candidate unfairly. “A lot of people have this idea that the NCIC is similar to the computer on the Starship Enterprise — that perfect knowledge of everything,” says Les Rosen, president of Employment Screening Resources (ESR), a San Francisco-based background screening company. “There are problems with the database’s completeness and accuracy. It’s not nearly the solution you think.”

Instead, employers should look to the NCIC as a supplemental piece to a larger, more comprehensive hiring process, Rosen says. It starts with a well-written application that an employer carefully reviews for red flags. For example, did the job candidate sign the application or fill in the box indicating whether or not they have a criminal record? Failure to contact previous employers is the most common mistake — one that can lead to liability issues — companies make when interviewing job candidates, says Rosen, who authored “The Safe Hiring Manual: The Complete Guide to Keeping Criminals, Terrorists, and Imposters Out of Your Workplace.” “Should you hire someone who turns out to be dangerous, unqualified, unfit or dishonest, your defense is that you exercised due diligence. It verifies the accuracy of the application,” he says. Rosen also advises firms to ask pointed interview questions, such as does the applicant have any issue undergoing a background check or will former employers say anything negative about them? “Those are powerful questions that will cause most people to self-reveal information thinking you may get it anyway,” he says. Although renewed lobbying efforts to gain access to the NCIC are still to play out, Chwat says his goal is to get legislation passed by the end of year. ESA’s chances are especially bolstered given the support of Sen. Schumer, an influential congressional leader who has a seat on the Judiciary Committee. “Our sponsor in the Senate is no small guy. We’re hopeful of moving the legislation forward, not so much as a freestanding bill but attach it to another bill.” securitysales.com • AUGUST 2011 13

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Industry Pulse Industry News

Houston Adopts CSAA/APCO Int’l Computer-Aided Dispatch System HOUSTON — A new computer-aided dispatch system developed in part by the Central Station Alarm Association (CSAA) is expected to save the city of Houston $1-2 million annually in costs related to emergency dispatches. The Houston Emergency Center (HEC) recently implemented the Automated Secure Alarm Protocol (ASAP), a national program created by CSAA and the Association of Public-Safety Communications Officials (APCO Int’l). To date, HEC is the largest public safety answering point (PSAP) in the country and the first in Texas to use the ASAP program, says HEC Director David Cutler. Calls generated by the use of ASAP are more accurate due to the reduction of miscommunication, he says. “Overall, this will result in more efficient call processing and greatly reduce costs for both the city of Houston and the alarm monitoring stations. It

The city of Houston expects to realize annual savings of $1-$2 million following the implementation of a new computer-aided dispatch system. Above, the city’s downtown skyline.

will help curb the workload of our call takers and allow them to process emergency calls more efficiently.” HEC is currently testing out the program with two pilot alarm-monitoring stations. Cutler estimates a 10-percent decline in police alarm call events and $1 million to $2 million in annual costs. “While a drop in telephone call volume by 8 to 13 percent is outstanding, a 10-percent reduction in the number of alarms requiring call-taker intervention is equally astonishing,” he

P1 Introduces Identity Fraud Coverage ROMEOVILLE, Ill. — Protection 1 has partnered with LifeLock, a provider of services to help consumers protect themselves from identity fraud and to better manage their credit. “With so much activity online, people are seeing the cost of identity theft rise. Today’s security-minded consumer looks for security beyond the home,” Protection 1 Chief Marketing Officer

Jamie Haenggi tells SSI. Protection 1 will offer the LifeLock service as part of its HomeCore security solution. With every new HomeCore package, customers will receive a free adult LifeLock membership, a $120 annual value. Upgraded packages are also available. The service uses a variety of monitoring systems to safeguard identities, such

as warning customers of detected change of address and requests that customers’ names be removed from preapproved credit mailings. Customers who opt for the service receive $1 million coverage in the event of identity fraud. Should a client become a victim of ID theft as a result of a service failure, LifeLock will provide the necessary tools to help victims fight back.

Xtralis Acquires to Enter IRM Market

NORWELL, Mass. — Fire/life-safety solutions provider Xtralis has acquired Germany-based HeiTel Digital Video, allowing the company to enter the intelligent remote monitoring (IRM) market. The companies will operate as separate businesses. IRM is one of the fastest growing segments in the video surveillance market due to quickly advancing technology and industry standards, Xtralis President and CEO Samir Samhouri says. “IRM provides proactive protection through verified video alarms and controlled response at much lower annual costs than alternative solutions.” Xtralis offers remote video monitoring products through its ADPRO brands. HeiTel provides various video transmission, viewing and recording solutions. The two companies will offer a complete IRM platform, including video verification, analytics and perimeter protection to the global market.

says. “Especially when you consider that we receive an average of more than 2,000 police alarms per week.” Will the new program help law enforcement agencies and alarm monitoring companies build stronger partnerships? CSAA President Ed Bonifas thinks so. “The Houston implementation of ASAP is the new standard in fostering the public-private relationship between alarm monitoring companies and 911 PSAPs,” he says.

C.O.P.S. Monitoring Brings 4th Central Station Online NASHVILLE, Tenn. — To increase its monitoring redundancy and dealer support throughout the southern region, C.O.P.S. Monitoring has opened its fourth central station here. Headquartered in Williamstown, N.J., the company also operates UL-Listed central stations in Arizona, Florida and New Jersey. Executives chose the Nashville location given that eight states border Tennessee, company Director of Marketing and Communications David Smith says. “We saw a big opportunity in between our Florida and New Jersey central stations,” he tells SSI. “Tennessee seemed like the right place because it borders several key states that we have dealers in. It also adds to our reliability and redundancy plan because all of our sites are hot-redundant and load-sharing.” All its central stations, including two disaster recovery servers at the company’s Las Vegas data center, operate on the same network. As a result, each station shares the signal traffic load for the entire operation, which helps to improve customer service and response time, Smiths says.

14 securitysales.com • AUGUST 2011

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Industry Pulse DataBank

Mapping Out the Future of Home Security In the spring, Electronic Security Association (ESA) conducted an online survey of its membership, as well as consumers, to gauge emerging trends in the residential space. The results were presented at the Electronic Security Expo (ESX) in Charlotte, N.C. Among the findings, residential security providers will increasingly draw revenues from nonalarm products. This fact is driven by a clientele that is interacting with new technologies in new ways. Not only do traditional security providers already have a foot in the door, but their customers appear to trust them most with their security and nonsecurity installation needs.

Revenues From Products Other Than Alarms 32%

Technology Ownership

37%

26% 16%

2009

19%

75%

Laptop/notebook computer

64%

Home network (wireless or hardwired)

56%

Portable music device/iPod

38%

Home theater system

38%

Smartphone

25% Monitored, professionally installed home security system

2010

2011

2012

2013

With little doubt, installing security contractors expect the percentage of revenues brought in by products other than alarm systems to significantly alter their portfolios. Given increasing demand for interactive services by technologysavvy consumers, as well as desire for home energy management capabilities, it’s not difficult to pinpoint where these new revenues will be derived.

23% 18% 16%

Homebuilder Remodeling

8% 4%

Architectural speakers Tablet computer/iPad

Outdoor security cameras

Personal emergency response system (PERS)

While it is not exactly a revelation, a large majority of consumers are accessing the Internet via laptops or smaller notebook computers. The devices account for the widest adoption of technology in three out of four surveyed households. Outdoor security cameras are a rarity in most residences; however, the propensity for mobile computing (and increased use of smartphones) would indicate an eventual market opportunity for installing security contractors.

72%

Home security

Phone/cable

13%

Source: ESA

Types of Most Trusted Companies

A/V retailer/installer

Home automation

13%

Source: ESA

Computer/IT

20%

33% 31% 30%

Trust most

17%

11%

Expect to Offer

79%

The residential installing security community likely includes some companies all too willing to carry out unscrupulous deeds in their sales and installation work. However, the industry enjoys an enormous amount of goodwill among consumers. For all the legitimate concern over the telecoms taking another run at their business, security dealers are well positioned to maintain a trusted relationship with their clientele.

Source: ESA

◗SECURITY CIRCUIT Aug 23-27: Fire-Rescue Int’l, presented by International Association of Fire Chiefs (IAFC); Atlanta; www.iafc.org; (703) 273-0911. Sept. 7-10: Custom Electronic Design & Installation Association (CEDIA) Expo; Indianapolis; www.cedia.net; (800) 669-5329. Sep 14: Security Canada Atlantic; Dartmouth, Nova Scotia; www.securitycanadaexpo.com; (800) 538-9919. Sep 19-22: ASIS Int’l 57th Annual Seminar and Exhibits; Orlando; www.asisonline.org; (703) 519-6200.

Did You Know? Jeb Bush, former governor of Florida, will be a keynote speaker at the ASIS Int’l 57th Annual Seminar and Exhibits in Orlando, Fla., held Sept. 19-22.

V Visit www.securitysales.com/events for a complete industry calendar.

is the average residential net account attrition rate. Find more SecuritySTATS at www.securitysales.com/securitystats

16 securitysales.com • AUGUST 2011

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NMC Has Two Locations

We Monitor the Nation

Our two fully redundant monitoring centers are designed throughout with the same top-performing technology.

At NMC we provide our dealers with innovative technologies to help you grow your business, throughout the U.S., and including Hawaii.

IMMEDIATE DISASTER RECOVERY Each monitoring center can provide full back-up in case of a catastrophic event at the other facility. The monitoring centers are located in different states to enhance effectiveness.

EMERGENCY STAFFING In the event of a critical need, operators at both locations are capable of handling alarm and telephone activity maintaining superior response times under any circumstance.

REAL SERVICE, REAL POWER, REAL CONVENIENCE, REAL SECURITY • NMC’s UL2050 listing provides our dealers with opportunities in the high security market. • Alarmaccount.com enables selected end users to maintain their account information securely. • MASweb 24-hour access to dealer accounts through the web including wireless access. • MASconnect API is a free application building tool for dealers. • MASvideo API is a free development tool for video compatibility.

COMPETITIVE EDGE Two fully-redundant monitoring centers give you a competitive advantage by providing enhanced security monitoring to your subscribers.

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UL2050

7/28/11 9:56:05 AM

Convergence Channel

You Can Offer Clients So Much More Than Security Security solutions have evolved to help organizations make more intelligent decisions. Capabilities that save or earn businesses money are a top priority. Many enlightened security managers recognize this and so should you.

er operational business value will double your closing ratio. Therefore, it is worth the sales effort every time. The two biggest challenges are understanding the real operational efficiencies you can offer and finding the right contacts at your prospect’s business that will recognize and buy business value. Senior management will readily acknowledge the importance of mitigating potential liability with adequate security measures. Their focus is on cash flow from their core business operation, which keeps the lights on. When it comes to management attention, operations that make the business money are at the head of the line. Many enlightened security managers recognize this reality and so should you.

©iStockphoto.com/Lee Pettet

ditor-in-Chief Scott Goldfine suggested the topic of this month’s column, and he didn’t have to twist my arm. I live, breathe, teach and evangelize about selling the business value of security solutions. Ask anyone who has had to suffer through one of my classes. It is as easy to understand as it is hard to accomplish. You will have to qualify and work differently with prospects if you expect to sell added value in operational efficiency. Will all prospects recognize the business value you can deliver through improved operational efficiency? Sadly the answer is no, not all of them. Professional selling is a math game. From my experience using a value-added selling approach to deliv-

Value-added security solutions can deliver business value through operational efficiency in the same solution. A project at LAX Airport provided an airline with enhanced security and helped it save $40,000 it had been losing each month busing passengers between terminals.

By Paul Boucherle paul@matterhornconsulting.com

5 Rules to Show Them the Money So when push comes to shove, who wins the funding wars more often, security or business operations? Ah, good answer. So your focus should be on how security solutions can tangibly be connected to saving or making your customer money. Pretty simple, right? Wrong. It isn’t simple at all; however, it is possible to accomplish if you consistently follow a few basic rules. Get to know their business and how they make money. While this sounds elementary, many systems integrators make the critical mistake of trying to understand a customer’s business from their business perspective. Assuming you know about a customer’s business is very dangerous. This approach allows you to deliver real and measurable business efficiency because it reflects the customer’s view of their business, not yours. Get to know their business and how they lose money. While customers may at first be reluctant to talk about this one, it is vital to understand when positioning your business value solution. Many times customers accept less than optimal operational efficiency because “it’s the cost of doing business.” If you don’t know about it, you can’t bring new and value-added solutions. Try asking these types of questions: “What costs associated with [you fill in the blank] get senior management’s attention?” and “What costs [fill in the

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ideas for life

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Convergence Channel

blank] cause you [middle management] Look to Help Existing Clients tomer was a nationally known airline to miss your budgets and goals most ofbased in Atlanta whose operational inSo can security solutions really deten?” The perfect one-two punch! efficiency was busing passengers beliver measurable added business value Forget about “canned” or prefortween terminals. Due to TSA security through operational efficiency? mulated ROI statements unless you concerns after 9/11, the underground Yes. While there is a great deal of prove them and customers will back tunnels could no longer be used. The emphasis on “killer applications” you up. I have found that ROI (return operational impact was $40,000 per that promise to deliver business valon investment) as it relates to opermonth to the bottom line. ue, I will focus on the basics. I am old ational efficiency is messy, individuThe solution path required an inschool. While this may not seem like alized and must be owned by middepth understanding of the security a terribly exciting revelation, it does dle management before it becomes concerns, security processes, all the difmake good business sense. an effective piece of the business valferent organizations that would require So let me ask you an important ue puzzle. Many times the customa voice in the solution, the political waquestion. Who is more likely to tell er does not have benchmarks ters to navigate between public to measure operational efUsing a value-added selling and private entities, and how ficiency. ROI must often be approach to deliver operational opening the tunnels would destated as informed but estibusiness value will double your liver operational efficiency to as mated goals that carry some closing ratio. Therefore, it is worth many “partners” as possible. risks. That is perfectly OK. Using a network-centric soluthe sales effort every time. Good business people undertion of video, intercom, dynamstand both risks and potential ic compartmentalization (lockrewards if careful due diligence has down), multiple monitoring stations you how they make and lose money: been exercised. and customized TSA training, it resulted A) A brand-new prospect that has alTo sell business value, you must in a project that cost a little more than ready invited two other companies to be careful, effective and disciplined $400,000 and delivered a breakeven incall on them or B) One of your cuswhen working with your customer’s vestment for the client in 10 months. tomers who knows you, likes your sermiddle management teams. Having The tunnels have been open since 2008. vice and may be in the market for an a good sales process will help with The operational efficiency delivered upgrade in the near future? the discipline part. To be effective you to the airport authority, first respondUse some discretion here and confirm must recognize building communicaers, maintenance and service personnel, with other customers in that same intion bridges, contending with polititravelers as well as other carriers is subdustry segment to expand, confirm and cal realities and developing consenstantial. (For more on this application, redefine your understanding of issues sus takes hard work. Careful focus on see online version of this column at secuwith those segments making and losing each department’s immediate goals as ritysales.com/convergencechanne0811.) money. Now, you may be on to some“big picture” business value may not thing and it’s time to brainstorm and get resonate with them. Remember, who creative. So what is the next step? 4 Key ‘P’ Questions to Resolve can really buy business “value” and Try a “shared risk” pilot program to So what defines “operational efficienlook past purchase price? Most often test the actual business results against cy” in a business? The answer can and it is senior management. They defitargeted results over a set period of is as varied as the types of businesses nitely want to see the big picture your time. You will need to establish some that security solutions serve. You can solution offers. baselines, as well as program “tweaks” boil it down to four ‘P’ questions. PeoNot all customers will buy added to be able to quantify anticipated busiple: Who will be involved and who will business value, no matter what you do ness results. This sounds interesting, benefit? Process: How will your solution to effectively sell it. Hey, we live in the but can it actually be done? change, improve or stream line our proreal world, don’t we? In my experience, Of course it can, and I will share a cesses? Policy: How will you support, you have a shot at selling real business real-life example of delivering valueimprove or streamline our policies and value about 50 percent of the time. added security solutions that provide who will be impacted? Profit: We want Twenty-five percent of the time you will business value through operational efto make more of it, so how will investencounter experienced transactional ficiency in the same solution. ing in your solution do that? ■ buyers that already have standardized Paul Boucherle, Certified Protection Professional and Certified Sherpa Coach (CSC), is principal solutions. Another 25 percent are pure Solution Improves Airline Efficiency (CPP) of Canfield, Ohio-based Matterhorn Consulting (www. matterhornconsulting.com). He has more than 30 years price buyers … run away, unless that is The year was 2005 and the place of diverse security and safety industry experience and your business model. was Los Angeles Int’l Airport. The cuscan be contacted at paul@matterhornconsulting.com. 20 securitysales.com • AUGUST 2011

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select your mode of perfection

10MPor 1080p There’s only one professional Dual Mode video surveillance camera that delivers both 10 megapixel resolution and the ability to switch to Full HD 1080p at 30 frames per second – the AV10005 from Arecont Vision. At 3648 x 2752 resolution, the AV10005 delivers 30 times more pixel density and forensic detail than standard definition analog or IP cameras – all while minimizing bandwidth and storage requirements by using H.264 compression. The AV10005 can be your one camera solution for most of your megapixel needs by cropping to any other lesser resolution or aspect ratio. Make your mode of perfection the AV10005 from Arecont Vision.

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7/28/11 9:59:45 AM

Tech Talk

Push System Limits With Perimeter Protection The key to any overall security system is planning and implementing several layers of security technology. A primary element is the outdoor perimeter layers. Learn about technologies and standards you’ll need for success.

his month, outdoor perimeter security is on the menu. We’ll look at techniques that can make for a worldclass installation and system. This is an area in which many new products and services are making it easier than ever for today’s alarm dealer to bring quality and economy to the marketplace. As a starting point, remember that good perimeter security is a “4D” system: Deter, Detect, Delay and Deny. Now let’s take a look at important planning, product and standards considerations associated with this critical first layer of intrusion detection and prevention.

Perimeter security may also include rapid response from security personnel. The security professional must calculate time for personnel response. This time must fall well within the intrusion time window of

By Bob Dolph bdolph.ssi@gmail.com

New Apps Tie Satellites to Security

Courtesy Optex

What do satellite technology and perimeter security have in common? Technology that was up until recently only available to large government operations is now available to all security dealers. Let’s look at some examples. Chino, Calif.-based Optex (optexamerica.com), a long-time provider of perimeter security equipment, has introduced its MyOptex program. MyOptex is a dynamic new project layout application for the iPad. It allows security sales staff to drag and drop to-scale detection patterns onto a satellite image of the jobsite. The resulting layout can then be E-mailed or printed out in a matter of minutes, along with the invoiced product and quote bases on what Blend Technologies to Optex sensors were used. Best Effect “With an iPad and MyOptex, our The key to any overall secusales representatives can have a rity system is planning and imfull layout and sample quote ready plementing several layers of sefor a dealer or integrator before curity technology. A primary walking back to the customer’s ofelement is the outdoor perimfice,” says Adam McGuern, marketeter layers. To do this properly ing manager at Optex. we will want a mix of physical SightLogix (sightlogix.com), (e.g. gates, walls, fences) and maker of intelligent outdoor videlectronic (e.g. sensors such as No more ditches! Optex’s AX-TFR Series wireless 100- and 200-foot beams offer great versatility and help installers eo surveillance solutions, offers seismic, video analytics, fence avoid trenching cable. The products offer 5-year battery cables, photo beams). operation and have a wireless RF transmitter compartment. advanced system features such as Geo-Registration. This function Electronic security placehas three-dimensional capabilities to early perimeter detection, and bement considerations should be inascertain the size of all moving objects fore the intruder breaches the intericluded within the interior of an outin the camera’s field of view (FOV). or of the facility. side perimeter fence. The exterior SightLogix’s systems also use GPSPhysical security may also include fence will substantially reduce false based analytics to automatically steer perimeter barriers such as bollards to alarms by keeping animals outside pan/tilt/zoom (p/t/z) cameras. protect against vehicular assaults. the perimeter.

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Additionally, the Princeton, N.J.based supplier’s SightSurvey program allows security planners to adjust the selection and placement of “virtual cameras” by overlaying on a Google Maps layout. This program also helps to generate an accurate inventory of perimeter equipment being proposed.

Proper Enclosures Are Elemental One of the biggest challenges of outdoor perimeter security is dealing with the elements. The simple fact is that electronics will not work very well if exposed to water, dirt and other foreign elements. That’s why it is important for security dealers to know National Equipment Manufacturers Association (NEMA) equipment enclosure ratings. These guidelines help ensure the correct cabinet is selected for the environment in which the security equipment is expected to perform. Additionally, extra safety concerns arise when the equipment may be operated in a hazardous or explosive environment. NEMA (nema.org) was founded in 1926 and has around 460 member companies. While the organization is involved with many standards bodies, the one we will address here is NEMA Standards Publication 250-2003, “Enclosures for Electrical Equipment (1,000 Volts Maximum).” Here are the classifications:

tect equipment against splashing, falling or hose-directed water, external condensation and water seepage; withstands water pressure from 1-inch hose nozzle, 65 gallons per minute, from distances of not less than 10 feet for a period of 5 minutes. NEMA 4X — watertight, dust-tight and corrosion-resistant; meets same qualifications as NEMA 4 but with added corrosion resistance. NEMA 5 — dust-tight with special gaskets; suitable for mills and other high-dust atmospheres. NEMA 6 — submersible; for operation under specified pressures and time. NEMA 7 — for indoor Class I, Division 1 hazardous locations with gas or vapor atmospheres; National Electrical Code (NEC) class 1 (circuit breaks in air). NEMA 8 — hazardous locations; NEC class 1 (circuit breaks immersed in oil). NEMA 9 — indoor Class II, Division I hazardous locations with combustible dust atmospheres; NEC class 2. NEMA 10 — explosion-proof; meets U.S. Bureau of Mines requirements for explosive atmospheres; designed to contain gas or vapor explosions and prevent ignition of surrounding atmospheres. NEMA 11 — acid- or fume-resistant; provides for immersion of enclosed equipment in oil. NEMA 12 — industrial, indoor use; resists ingress of oils, dust and moisture to satisfy individual requirements.

NEMA 1 — general indoor protection where conditions are not unusually severe. NEMA 2 — drip-tight; indoor use; designed to exclude falling moisture or dirt; particProper protection of exterior ularly applicable to cooling perimeter equipment is important, rooms, laundries, etc. where and so this month I am featuring encondensation is prevalent. closures from Safety Technology Int’l NEMA 3 — weatherproof; (sti-usa.com) of Waterford, Mich. The outdoor use; designed to enclosure shown is the STI-7560AC. withstand all normal expoThis unit has air conditioning for protecting equipment in harsh, hot sure to natural elements; conenvironments. trols mounted on pullout Make sure to check out the wide racks for easy access; with variety of enclosures available from several rain hood and weather seals. manufacturers for protecting your security NEMA 4 — watertight and equipment, and your clients’ safety and dust-tight; intended for use investment. indoors or outdoors to pro-

NEMA 13 — Oil-tight and dust-tight; intended for indoor use.

Grading Other Rating Systems Another rating system for enclosures you might run across is the International Electrotechnical Commission (IEC) 60529 Ingress Protection (IP) standard. It has a two-digit number in which the first figure indicates the degree of protection against objects from dust to greater than 50mm in size and against moisture from water dripping, spraying, and immersion under pressure. NEMA is more prevalent in the United States while IP prevails internationally. There is no exact equivalency between NEMA and IP ratings. However, NEMA has drafted No. 250 Appendix A as a guide to distinguish relationships among the ratings. An example would be that a NEMA 4 / 4X is similar to IP56. NEMA typically exceeds similar IP ratings. You will also see similar UL (UL50 / UL508) and Canadian Standards Association (C22.2 No. 94) test ratings similar to what NEMA offers. While UL and CSA require enclosure testing by qualified evaluators, NEMA does not and instead leaves compliance to the manufacturers. ■ Bob Dolph has served in various technical management and advisory positions in the security industry for 30+ years. To share tips and installation questions, E-mail Bob at bdolph.ssi@gmail.com. Check out his Tech Shack blog at www.securitysales.com/blog.

TECH TALK Tool Tip This UL Type 4 air conditioned enclosure allows alarm control panels to be protected from extreme temperatures or other areas requiring protection. The heavy-duty metal enclosure offers protection against vandalism, either accidental or intentional, as well as dirt, dust and grime.

Courtesy Safety Technology Int’l (STI)

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Fire Side Chat

Elevator Safety: Cracking the Code Determining fire alarm priorities when elevator emergency phones are involved illustrates the need to sometimes fill in the blanks when situations fall outside the realm of existing codes. Having a third phone line or simply leaving it up to an AHJ are two potential solutions.

“

e have a lot of apartment and office buildings that are connecting elevator emergency phones to the same phone lines as the fire alarm. They have the fire alarm ahead of the elevator phone so there is no problem with it interrupting the fire alarm signal. But what happens when the fire alarm goes off and seizes the line to send alarms? The people in the car are left without phone service.” The predicament above was brought to us by Jerret Van Berkom of Electro Watchman in St. Paul, Minn. He is asking if the issue of placing the fire alarm panel ahead of all else is legal, and what the National

Fire Protection Association (NFPA) has to say about it. This month, we’ll take a closer look at the issue of digital alarm communication transmitter (DACT) requirements. We’ll also look at how something as critical as an elevator telephone might be dealt with in the field.

Topic Taps Uncharted Territory First, let me say that the issue of an elevator phone and a fire alarm DACT is all too common. I’m actually amazed this issue has never occurred to me before receiving Van Berkom’s E-mail. At the same time, I’m not the only one in the industry who was caught off-guard with this question.

By Al Colombo abc@alcolombo.us

The first thing I did was contact NFPA’s public affairs arm. I was promptly put in contact with Lee Richardson, the organization’s staff liaison, who was just as baffled by this inquiry as I was. “You may be on to an entirely new question that has yet to surface,” he told me in a phone conversation. “Let me check the code set that covers elevator issues and I’ll get back with you.” Richardson called me back in a few hours with the news: “There is nothing in NFPA or other code sets that tell us what to do.” His immediate response to the dilemma at hand was to suggest the use of a separate phone line. Of course, that is not always going to be a satisfactory solution to this problem, especially when there are only two phone lines on premises and the owner has no intentions of adding another one.

What NFPA Codes Indicate

Jarret Van Berkom (pictured) of Electro Watchman in St. Paul, Minn., wonders whether placing a fire alarm panel ahead of all else is legal, and what the National Fire Protection Association (NFPA) has to say about it.

The first place we must look when there’s a code question such as this is NFPA 101, Life Safety Code. Another important code set is NFPA 72, National Fire Alarm and Signaling Code, 2010 Edition. Section 26.6.3.2.1.1, NFPA 72, says, “A DACT shall be connected to the public switched telephone network (PSTN) upstream of any private telephone system at the protected premises.” In other words, the elevator telephone must be connected after the fire alarm panel DACT, which means that when the fire alarm panel is dialing and communicating, someone

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Fire Side Chat

theplusfactor

trapped in the elevator will not be able to get help through the use of the elevator emergency telephone. To further illustrate the problem, Section 26.6.3.2.1.3(A) says, “DACT shall be configured so that, when it is required to transmit a signal to the supervising station, it shall seize the telephone line (going off-hook) at the protected premises and disconnect an outgoing or incoming telephone call and prevent use of the telephone line for outgoing telephone calls until signal transmission has been completed. A DACT shall not be connected to a party line telephone facility.”

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NFPA’s Richardson made several suggestions, many of which alarm companies already follow. “One solution is to use a third phone line,” he recommends. And where there are only two telco landlines present, he suggests that cellular be used as a secondary means of communication for the DACT. In some cases, a single cellular unit will qualify for both primary and secondary paths. Using cellular for telco 2 will essentially free up the second landline. In this case, the second landline can then be used to connect the elevator emergency phone to the PSTN. “I would be in favor of using the second phone line for the primary elevator emergency phone,” says Bradley Howard, a Columbus, Ohio-based NICET Level IV fire alarm technician. “The new NFPA 72, 2010 edition, does have some provisions that allow the designer to set priorities to the various life-safety needs. This situation most likely being people stuck in an elevator, I’d consider that to be an emergency to protect people first, then the building, then property.” What Howard is suggesting is that the elevator emergency phone be allowed to remain ahead of the fire alarm panel DACT on telco 2 using a line seizure relay that connects to the elevator phone. ■ Al Colombo is an award-winning writer who has covered electronic security and life safety since 1986. Visit his Web site at www.alcolombo.info, and check out his Security Sense blog at www.securitysales.com/blog.

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DIGITAL VIDEO SYSTEMS DESIGN FOR

DUMIES

DEALERS / USERS / MANAGERS / INSTALLERS / ENGINEERS / SALESPEOPLE

Compression and Storage

Continuing Education Sponsored by PELCO Part 3 of 4 Brought to You by

Presented by

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DIGITAL VIDEO SYSTEMS DESIGN FOR

DUMIES

Part 3 of 4

Simplifying

STORAGE STRATEGIES While crisp, clear surveillance video is readily achieved today, managing CCTV streams and recording those images has become imperative. Everlarger IP systems featuring high definition cameras have the industry scrambling to develop effective methods to compress and store video data. Read on to discover your best options. BY BOB WIMMER

elcome to Part III of the latest in SECURITY SALES & INTEGRATION’s acclaimed “D.U.M.I.E.S.” series: “Digital Video Systems Design for D.U.M.I.E.S.” Brought to you by Pelco, this four-part series has been designed to educate readers about recent advances in technology and systems that are likely to shape this decade’s progression of the video surveillance industry. “D.U.M.I.E.S.” stands for dealers, users, managers, installers, engineers and salespeople. The 2011 series explores areas of concern for using equipment that meshes today’s surveillance system parameters and needs/expectations, with particular attention to hybrid approaches that account for the migration from analog- to IP-based systems. This third installment covers advanced compression methods and storage devices. In particular, these design considerations are explored in application and optimization of systems inclusive of megapixel cameras.

Illustration by Jerry King

Video Has a Voracious Appetite Uncompressed video and data files are huge. In HDTV, the bit rate easily exceeds 1Gbps (gigabits per second). Without compression, the volumes of data produced by digitizing CCTV image streams would swamp the available storage and communications systems. One of the formats defined for HDTV within the United States is 1,920 pixels horizontally by 1,080 lines vertically, at 30 frames per second. If these numbers are all multiplied together, along with 8 bits for each of the three primary colors, the total data rate required would be approximately 1.5Gbps without compression. To overcome this, the process of compression is applied to the image stream, reducing the amount of information that needs to be transmitted and stored. Different applications have different priorities regarding clarity of the image, data volumes and processing power. For example, identification evidence has a different picture qual-

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ity requirement compared to monitoring a parking lot. So when choosing IP or megapixel equipment, you’ll need to select the compression format that suits your application. Basic compression reduces the video signal by two different methods. The first is based on the Human Visual System research papers. This method — called Irrelevancy Reduction — omits parts of the video signal that are not noticed by the signal receiver, which in this case is the human eye. In theory this method compresses color more so than detail because our eyes are more sensitive to the latter than the former. This makes the compression less visible to the naked eye. Secondly, Irrelevancy Reduction sorts the detail information into fine and coarse groups and discards the fine information first because our eyes are more sensitive to coarse than fine detail. In short, information not observed by the human eye is discarded and only that noticeable to the human eye is saved. The second method is accomplished by removing duplication of data information and is referred to as Redundancy Reduction. This method is based on changes. Redundancy is determined in theory by the number of bits used to transmit a message minus the number of bits of actual information in the video scene. Informally, it is the amount of wasted space used to transmit certain data. Video compression is a way to reduce or eliminate unwanted redundancy. Any part of an entire video set that does not contribute to the overall video image information can be regarded as redundancy.

An Encounter With Encoding There are two leading ways to encode video surveillance information. Spatial encoding is the correlation between neighboring pixel values within a frame of video. This is in contrast to temporal encoding, which is the correlation between adjacent frames in a sequence of video.

In a nutshell, spatial encoding, also referred to as intraframe compression, is a reduction of an image file size within the individual frame of video. It is performed by taking advantage of the fact that the human eye is unable to distinguish small differences in color as easily as it can perceive changes in brightness. As viewed in Scene # 1 the grassy area has basically the same texture and color; therefore, it is a prime subject for spatial encoding. Temporal reduction, which is also referred to as interframe compression, is the correlation between adjacent frames in a sequence. This commonly

Irrelevancy and Redundant Reduction Irrelevancy Reduction Omits part of the signal that is not noticed by the human eye based on the Human Visual System Research.

Redundant Reduction Redundancy reduction is accomplished by removing duplication from the signal source that is found either within a single image or between multiple images of a video stream.

used method works by comparing each frame in the video with the previous one. If the frame contains areas where nothing has moved, the system simply issues a short command that copies that part of the previous frame, bitfor-bit, into the next one. If sections of the frame move or change, the system emits a slightly longer command that tells the encoder to shift, rotate, lighten or darken the image. Temporal compression works well for video that will simply be played back by the viewer, but it can cause problems if the video sequence needs to be edited.

What You Don’t See You Don’t Miss This brings us to lossy versus lossless or nonlossy compression functionality. Almost all of the compression methods

Spatial Compression

Spatial encoding is the correlation between neighboring pixel values within a frame of video. The grassy area above has basically the same texture and color and therefore is a prime subject for it.

incorporated in the surveillance industry are referred to as lossy. Lossless compression, as the name implies, means that after compressing the video and then decompressing it, you wind up with the exact same data as you entered. Lossless compression is required for text and data files, such as bank records, text articles, etc. Image file formats, like .gif (Graphics Interchange Format) or .png (Portable Network Graphics), use only lossless compression methods. GIF is a bitmap image format that is compressed using the Lempel-Ziv-Welch (LZW) lossless data compression technique patented in 1985 to reduce the file size without degrading the visual quality. PNG is a new bitmapped graphics format approved by the World Wide Web consortium as a standard to replace GIF. Lossless offers the advantage that no matter how many times you compress it, you still haven’t lost any video data. The bad part is that most often you don’t save nearly as much storage space as you would with other lossy compression algorithms. We now come to the most popular form of compression, especially in the world of IP and megapixel surveillance equipment: lossy. There has long been a need for compression in the security industry. Mathematicians have worked for many years on solving the basic problem of securitysales.com • AUGUST 2011 A3

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Temporal Compression Temporal reduction, which is also referred to as interframe compression, is the correlation between adjacent frames in a sequence. This commonly used method works by comparing each frame in the video with the previous one. Temporal compression works well for video that will simply be played back by the viewer, but it can cause problems if the video sequence needs to be edited.

how to reduce the image size to produce the best compromise between image clarity, the data size of the image and the amount of processing power it takes to run the compression method. Lossy compression is used to compress video files, especially in applications such as streaming video images over a security network. Ninety-five percent of all video codecs out there are lossy, meaning that when you compress the video and then decompress it, you do not get back what you put in. Now, this isn’t as bad as it may sound. Obviously if you’re compressing something like a text document, you don’t want to lose any of the data. But with something like a picture, even if a few bits and pieces aren’t quite right, you can still make out the general idea of the image. We delve into this more deeply in the next section.

Security Favors Lossy Formats As the security industry moves rapidly toward IP and megapixel cameras, technicians need to be familiar with the subject of lossy compression. Leading methods include Motion JPEG, MPEG4, H.264 and Wavelet. Motion JPEG — MJPEG (JPEG stands for Joint Photographic Experts Group) is an adaptation of the popular JPEG image compression for still digital photos. JPEG is a lossless compression technique, losing very little data in the image.

In MJPEG, each video frame is compressed separately using the JPEG still image compression standard. There is no frame differencing or motion estimation. MJPEG then creates a video stream from a succession of JPEG-compressed still photos that is independent from the motion in the image. Because it is based on these high quality lossless stills, it delivers a much higher quality image than that of interframe or temporal methods. The standards situation for MJPEG is complicated since there aren’t any. An advantage of Motion JPEG is that, because it is based on still images,

Part 3 of 4

it can produce any of its frames as a single image for identification purposes. A survey of 12 leading networked camera manufacturers showed around 85 percent of them incorporate MJPEG as one of their video streams. MPEG series — The MPEG series is based on the group of images concept. The group of images is defined as the I-frame, P-frame and B-frame. Simply described, MPEG’s basic principle is to compare compressed images to be transmitted over the network. The reference or I-frame provides the starting or access point and uses the same principle as JPEG image compression. Only parts of the following images (P- and B-frames) that are different from the reference image are then held. Specifically, P-frames (predicted) are coded with reference to a previous picture, which can be either an I-frame or another P-frame. B-frames (bidirectional) are intended to be compressed with a low bit rate, using both the previous and future references. The B-frames are never used as the references. The relationship between the three frame types is described in the MPEG standard; however, it does not restrict the limit of B-frames be-

Lossy Compression Methods for Security 90% 80% 70% 60%

■ MJPEG

50%

■ H.264

40%

■ MPEG-4

30%

■ Other

20% 10% 0% Lossy compression is used to compress video files, especially in applications such as streaming video images over a security network. Ninety-five percent of all video codecs are lossy, meaning when you compress and then decompress video you do not get back what you put in. Above, the most commonly used methods in security by percentage.

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MJPEG Characteristics Minimum latency Consistent file size Lower CPU requriements Lower cost for software and hardware No standards In Motion JPEG, each video frame is compressed separately using the JPEG still image compression standard. A video stream is then created from a succession of JPEG-compressed still photos.

tween the two references, or the number of images between two I-frames. The decoder will then reconstruct all images based on the reference image and the different data contained in the B- and P-frames. Note that a P-frame may only reference a foregoing I- or P-frame, while a B-frame may reference both foregoing and coming I- and P-frames. A result of applying MPEG video compression is that the amount of data transmitted across the network is less than that of Motion JPEG. However, the bandwidth will be directly affected by the amount of motion within the frame. There are many groups of MPEG standards that have developed through the years due to continuous improvements. The first was MPEG-1. This standard has a resolution of 352 X 240 (CIF) at 30 images a second and incorporates progressive scanning. Standardized in 1993, it is designed for up to 1.5Mbps with compression ratios listed as 27:1. MPEG-2 was standardized in 1995. It has a resolution of 720 X 480 (4CIF) and incorporates both progressive and interlaced scanning. The most significant improvement compared to MPEG-1 is its ability to efficiently compress interlaced video. It is also capable of coding standard-definition television at bit rates from about 3-15Mbps and HDTV. Compression ratios for MPEG-2 vary from 50:1 to 100:1 depending on the type of signal, and number of B-, P- and I-frames. Standardized in 1999, MPEG-4 Part 2 is designed for low bit rate video

transmission. This object-based method tracks individual items within a scene separately and compresses them together. It offers a very efficient compression ratio that is scalable from 20:1 up to 300:1. In today’s surveillance industry about 20 percent of manufacturers are turning to MPEG-4 for remote viewing of compressed video images due to the favorable ratios. H.264 — Standardized in 2003, H.264 or MPEG-4 Part 10 Advance Video Coding (AVC) builds on the concepts of earlier standards such as MPEG-2 and MPEG-4. An H.264 video encoder carries out prediction, transform and encoding processes based on motion to produce a compressed bit stream. The video decoder then carries out the complementary processes of decoding, inverse transform and reconstruction

cations ranging from low bit rate, low delay mobile transmission through HD security megapixel cameras. The improved compression performance of H.264 comes at the price of greater computational cost. H.264 is more sophisticated than earlier compression methods and this means it can take significantly more processing power to compress and decompress H.264 video. It’s also important to understand that H.264 is not one codec. There are many different profiles within H.264. Each one has different capabilities and they are not all created equal. Depending on which one has been implemented by a particular manufacturer will largely determine video quality. In all, there are more than 17 profiles within the H.264 structure. The four main H.264 profiles are baseline, main, extended and high.

Video Compression MPEG Timeline 1993

1995

1999

2003

MPEG-1

MPEG-2

MPEG-4 Part 2

MPEG-4 Part 10 AVC

The MPEG series is based on the group of images concept, defined as the I-frame, P-frame and B-frame. MPEG’s basic principle is to compare compressed images to be transmitted over the network. Today, about 20 percent of manufacturers use MPEG-4 for remote viewing of compressed video images due to the favorable ratios.

to produce a decoded video sequence. The prediction methods supported by H.264 are more flexible than those in previous MPEG-4 versions, enabling more accurate predictions and improved video compression. Intra prediction uses 16 X 16 and 4 X 4 block sizes to predict the macro block from surrounding, previously coded pixels within the same frame. As well as its improved compression performance, H.264 offers greater flexibility in terms of compression options and transmission support. An encoder can select from a wide variety of compression tools, making it suitable for appli-

Baseline profile is suitable for low cost applications like videoconferencing, some mobile applications and low end security cameras. Few tools are used and CPU requirements are low. These lower profiles will not produce high quality video in terms of picture quality, noise reduction and other performance characteristics. Main profile, though rarely used, is for broadcast and storage applications. The extended profile includes streaming video and high compression capability. It offers additional robustness compared to lower-level profiles for reduced data losses and securitysales.com • AUGUST 2011 A5

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DIGITAL VIDEO SYSTEMS DESIGN FOR

Where to Keep All That Video Storing all of this high quality video information can be challenge for both you and your network. Even with compression ratios above 2,000:1 storing video can keep many people in a state of confusion. Due to advances in today’s modern technology, it has become somewhat easy to store large amounts of data information. There are many different types of electronic devices used for data storage. The most common forms are magnetic storage, optical storage and solid-state devices (SSDs). Another alternative is relying on data storage service providers (commonly referred to as the Cloud). However, the exponential explosion of surveillance cameras and recording streams has created a new acronym: NESS (never enough storage space). Anyone who has stayed in one house for more than five years understands exactly what this means. Consider this example: 16 1.3-megapixel cameras, indoor application with seven days of medium quality video storage of 15 images per second for each camera. Let’s compare the required storage using the top two compression methods found in the marketplace, MJPEG and H.264. The storage requirement for cameras incorporating MJPEG would need 17.4TB of storage; if using H.264, the storage would be 3.5TB. It does not take a long period of time to realize video images are hungry for storage space.

head to create and recompose magnetic impressions from the disks. An HDD is a nonvolatile, random access digital data storage device. It features rotating rigid platters on a motor-driven spindle within a protective enclosure. Data is magnetically read from and written to the platter by heads that float on a film of air above the platters. The platters are spun at speeds varying from 3,000 to 15,000 rpm for high performance servers. The majority of larger businesses and computer networks have multiple HDDs. In order to manage large amounts of HDDs, software such as that provided by Milestone Systems can be used. Many of these so-called video management systems (VMS) are based on an open as opposed to proprietary platform to facilitate integration and support for hundreds of network camera models. But what happens when an HDD fails? It’s RAID to the rescue (not the bug spray). An acronym for redundant array of independent disks, RAID is a technology that provides increased storage functions and reliability through redundancy. This is achieved by combining multiple HDD components into a logical unit where data is distributed across the drives in one of several ways called RAID levels.

Part 3 of 4

The following is short explanation of RAID levels found in the security industry: RAID level 0 — Not redundant, hence does not truly fit the “RAID” acronym. In level 0, data is broken down into blocks, each written to a separate HDD, resulting in higher data throughput. Since no redundant information is stored, performance is very good, but the failure of any disk in the array results in data loss. RAID level 1 — Provides redundancy by writing all data to two or more drives. The performance of a level 1 array tends to be faster on reads and slower on writes compared to a single drive, but if either drive fails no data is lost. The main disadvantage is the cost per megabyte of storage is higher since one drive is used to store a duplicate of the data. This level is commonly referred to as disk mirroring. RAID level 4 — Stripes data at a block level across several drives, with parity stored on one drive. The parity information allows recovery from the failure of any single drive. The performance of a level 4 array is very good for reads (the same as level 0). Writes, however, require that parity data be updated each

Recording Storage Requirement Example 40 35 30

Terabytes

quicker server-stream switching. The last major profile is the high profile, which is used for broadcast and disc storage applications. Typical examples would be HDTV applications such as Blu-ray and megapixel video surveillance cameras.

DUMIES

The example illustrated here is based on 16 cameras recording at 15 images per second, storing seven days of video at medium quality. The amount of hard drive space needed is greatly reduced when using H.264 compression compared to MJPEG. This is even more pronounced with higher megapixel cameras.

■ MJPEG ■ H.264

25 20 15 10

Hard Drives Handle Bulk of Storage

The most popular magnetic data storage devices are hard disk drives (HDD). Such devices make use of a read/write

1.3 Megapixel

3 Megapixel

5 Megapixel

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time. This slows small random writes, in particular, though large writes or sequential writes are fairly fast. Because only one drive in the array stores redundant data, the cost per megabyte of a level 4 array can be fairly low. RAID level 5 — The most popular level; RAID 5 stripes both data and parity information across three or more drives. It is similar to RAID 4 except that it exchanges the dedicated parity drive for a distributed parity algorithm, writing data and parity blocks across all the drives in the array. Fault tolerance is maintained by ensuring that the parity information for any given block of data is placed on a drive separate from those used to store the data itself. However, with large HDDs how long would it take to completely rebuild a damaged drive? Between 30 to 60 hours depending on the amount of data. If a second drive fails within that rebuild time it could really be an ordeal. RAID level 6 — Ushered in thanks to advanced megapixel camera systems, this level is block-level striping with double distributed parity that provides fault tolerance from two drive failures. In other words, the array continues to operate with up to two failed drives. This makes larger RAID groups more practical, especially for high-availability systems. This becomes increasing-

NEXT UP FOR ‘D.U.M.I.E.S.’: TRANSMISSION AND INFRASTRUCTURE Be sure to check out the October issue of SSI for Part IV of 2011’s “Digital Video Systems Design for D.U.M.I.E.S.” series. The fourth and concluding installment will explore advanced transmission infrastructure and mediums for the most effective and efficient processing of video surveillance information. In particular these design considerations will be explored in application and optimization of systems inclusive of megapixel cameras.

ly important as large-capacity drives lengthen the time needed to recover from the failure of a single drive. Single-parity RAID levels are as vulnerable to data loss as a RAID 0 array until the failed drive is replaced and its data rebuilt. The larger the drive, the longer the rebuild will take. Double parity allows time to rebuild the array without the data being at risk if a single additional drive fails before the rebuild is complete.

Solid-State Memory on the Rise In contrast to traditional HDDs, SSDs (sometimes called “flash” memory) use microchips that retain data in nonvolatile memory chips and contain no moving parts. Compared to electromechanical HDDs, SSDs are typically less susceptible to physical shock, are silent, and have faster access time and less latency. But they are more expensive per gigabyte and typically support a limited number of writes over the life of the device. Presently, the capacity of these devices is limited. However, many IP and megapixel cameras are coming equipped with internal SSDs that allow recorded information to be stored within the cameras themselves. This feature reduces the possibility of lost video information in case of a networking malfunction. Due to their limited number of writes, SSDs do not have a very long lifespan and they are dependent on frequency of use. Combine that with a replacement cost of up to $2/GB compared to the $0.10/GB for HDDs and it is apparent that more progress must still be made in the SSD industry before HDD technology can be replaced.

Network Configuration Solutions With the growth of IP cameras and recording equipment the need to provide initial storage, backup and management for vast amounts of video is now an issue. The methods by which the information is stored remains the

same (DAT, HDD, RAID, SCSI, etc.), however, the way the data is managed is changing. Welcome to the era of networked attached storage (NAS) and storage area networks (SANs). NAS is a data configuration or medium that uses storage devices connected directly to a network. These devices are IP-addressable and can be accessed by operators via a server that acts as a gateway to the video information. The advantage of NAS is the storage can be centralized, and easily expanded and managed. Additional NAS boxes can be plugged into the network to handle increases in the number of system operators as well as the need for greater storage. NAS deals with storage at the file level, and is used for general purpose file sharing; however it does not address the problem of backup. SAN represents a way to separate the server and storage into two independently managed systems, thereby simplifying the complexity of the overall IT infrastructure. A SAN is a high-speed subnetwork comprised of shared storage devices or machines that contain HDDs for retaining data. These networked systems make it possible for devices to communicate with each other on a separate network, which lessens crowding of a standard network. SAN architecture functions so all storage devices are available to all servers on a LAN or WAN. As more storage devices are added to a SAN, they too will be accessible from any server in the larger network. The server merely acts as a pathway between the end user and the stored data. Because stored data does not reside directly on network servers, server power is used for more sophisticated video applications. Robert (Bob) Wimmer is president of Video Security Consultants (www.cctvbob.com) and has more than 38 years of experience in CCTV. Originator of the D.U.M.I.E.S. series (www.dumies.us.com), Wimmer was inducted into SSI’s Industry Hall of Fame in 2006.

FIND IT ON THE WEB F Visit the securitysales.com/dumies to acV cess eight years’ of “D.U.M.I.E.S.” archives. ce securitysales.com • AUGUST 2011 A7

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Monitoring Matters

Maximize Value Via Line Cards and Contracts

to do business with it. There is no pact hen someone deto be kept. By neglecting to get contracts cides to open an signed, alarm dealers damage the value alarm installation By Kevin Lehan of their companies. business of their k.lehan@emergency24.com own, they must define their goals and make plans to achieve them. Secure Your Own Line Card Commonly, alarm dealers want to All alarm dealers plan to grow their poses digits during installation probuild a base of accounts to derive resubscriber base. So it is important gramming. The result could be a false curring monthly revenue (RMR) that that newly formed companies work dispatch to your customer’s home, will fund their operations; but, ultiwith their central stations to secure which could result in a fine. At the same mately, those accounts provide a large their own line card early on to stantime, you’d then have to explain to your asset that can be “cashed out” as needdardize installations and, ultimately, customer why this happened when ed or at retirement. you’ve done nothing wrong. To maximize the value of If your goal is to grow your business Don’t Fail to Strategize the accounts, there are two and ultimately sell subscriber key tactics that should be folKeep in mind that a line accounts in bulk, it is imperative card does not limit the lowed: always keep current you have signed contracts that alarm dealer in any way. In contracts with customers and define your service agreement, fact, line cards can be exhave all accounts residing on thus creating a sellable asset. panded to accommodate a your own line card. growing account base and maximize the overall account value. can be designed to accept multiple reContracts Define Responsibility A dedicated line card increases the porting formats so you are not locked Contract law is based on the prinvalue of a dealer’s account base at the in to one technology. ciple expressed in the Latin phrase, time of a sale because it is much easier Having a dedicated line card also “pacta sunt servanda,” which trans— and less costly — for the acquiring allows dealers to organize their aclates to “pacts must be kept.” That company to re-point the phone lines if counts numerically by ranges, such means when you have a signed agreethe accounts are being moved to a difas designating fire accounts as 1,000ment with a customer to provide a serferent central station. Should your ac1,500 and burglar systems as 2,000vice for a certain amount of time for counts be scattered on multiple line 3,000. Or, pending the size of your a specific cost, you have a relatively cards, the buyer would then have to company, dealers can number their high level of assurance that you will schedule appointments with the end accounts based on geographic area. receive that revenue for the duration users to reprogram their systems. At the same time, if your goal is to of the contract length. Another advantage of having your grow your business and ultimately sell Should you decide to sell your acown line card is that all of your subscribsubscriber accounts in bulk, it is imcounts, prospective buyers will perer accounts are programmed to dial a perative you have signed contracts form audits to ensure they too can single set of telephone numbers and that define your service agreement, count on that revenue. If those auhave the same two-character prefix. Not thus creating a sellable asset. dits show your customers are not unonly does this standardize the installaBy defining a company’s goals and der contract, but instead have a verbal tion process for your technicians, it will planning how to best accomplish agreement with you, those are worth greatly reduce the number of phantom them, alarm dealers will be in a much much less, if anything. signals that land on your accounts. better position when it is time to set The reason is that while you may have Phantom signals can be particularnew, loftier goals for their lives. felt comfortable with personal assuranc■ ly frustrating and could occur when es — and your customers felt comfortKevin Lehan is manager of public relations for Des Plaines, Ill.-based Emergency 24 Inc. He also serves another dealer — usually one with acable with you — when a new company as executive director of the Illinois Electronic Security counts on the same line card — transtakes over, the subscriber does not have Association (IESA).

36 securitysales.com • AUGUST 2011

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Bright Ideas B E EXECUTIVE ROUNDTABLE

CEOs:

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(l-r) Mike Bradley, Jim Henry, Phil Aronson and Curtis Nikel gather to discuss ideas and best business practices.

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uick, you immediately have to trim 10 percent of your business’ costs; what do you do? It’s a bit of a trick question because if you find yourself in such a predicament you’ve likely been asleep at the wheel. Continuously monitoring and keeping a tight lid on costs is essential to sustain a business today. That nugget of know-how was just one of many bandied about during a recent meeting of leading integrator minds moderated by SECURITY SALES & INTEGRATION. The roundtable, which took place behind closed doors during this year’s PSA-TEC event outside Denver, represented a broad cross section of the industry with executives from companies spanning both coasts as well as Canada, and diverse operations ranging from alarm monitoring- to

38 securitysales.com • AUGUST 2011

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INTEGRATOR EXECUTIVE ROUNDTABLE

IT-based business models. Mixing it up with gusto and candor were company Presidents Phil Aronson (Aronson Security Group, Seattle), Mike Bradley (Safeguard, Scottsdale, Ariz.) and Curtis Nikel (Contava, Edmonton, Alberta, Canada), and Executive Vice President Jim Henry (Henry Bros. Electronics, Fair Lawn, N.J.). The foursome assess the fortunes of 2011 contrasted against recent history; the realities and potential of managed services; the perils of not focusing on recurring revenues and emerging RMR opportunities to increase customer stickiness; bringing customers real, measurable value that helps them be heroes within their organizations; and techniques for getting the most out of your people and processes. To learn what they had to say about training, recruiting, the future of the industry and more, check out the online version of this in-depth discourse at securitysales. com/roundtable0811. We’re about halfway through 2011. Has it turned out better than expected? Maybe not quite as good as you had anticipated? Have there been any big surprises or disappointments? Curtis Nikel: Our prediction in revenue for the year is right on target to the top line. We’ve felt some bottom-line squeeze so far, and maybe aren’t tracking the bottom line that we’d like to see. The activity seems to be all there. Coming from Alberta, Canada, the oil and gas industry and tar sand is enormous, $150 billion that we spent in the past 10 years in developing that tar sand process. So that’s driven the Alberta economy. The spin-off is security business for us. Mike Bradley: I think we’re meeting expectations, certainly not exceeding it. As we look back now in the past three years, we’re very thankful for our recurring business. Arizona has been very hard hit, and our economy has not only taken an economic hit, we’ve got a political hit from the fall out of SB1070 and all the border security issues, etc. They’ve had some impact on tourism and others, so we’ve got a

mixed bag of issues with the economy. The housing market was one of the hottest in the country, and along with Las Vegas and a couple other areas, it’s collapsed somewhat overnight. So, if you were dependent on construction, then you’re hurting. The larger customers are still fairly strong — government has still been spending. There are other pockets where the customer is still fairly healthy and still doing business, but there is no real growth right now, and it may not be for a number of years. So the recurring revenue has really been very important to us.

cal markets and in geographies. And you’re right; the construction business in Phoenix just fell off the table where it was so hot, and I thank God for having the balance of focus in those vertical markets and in those geographies that act similar to the RMR for you in mitigating the impacts of that on a regional basis. Phil Aronson: Our 2010 and 2011 have been really good. During the past nine years, we’ve grown about 30 percent a year and we continue to do that. For us, 2009 was the toughest year. We do a lot of regional work, but it’s our glob-

“Business is simple, it’s people, process and tools. So you get the right people in the right places. We’re always looking to be as lean as possible because this is a tough business, and with the margins you can’t make mistakes.” Phil Aronson, President Aronson Security Group, Seattle

Every aspect of our business that depends on recurring revenue is growing and has grown through this entire process. We’ve had an uptick in attrition of the RMR customers, but we’ve also had a stronger uptick in the additions. I think that’s a testament to the quality of work that we do and some of the marketing efforts that we put in place. So the construction market is probably about on par of where it is expected to be. It’s probably half the revenue that it was three years ago for us. It’s not insignificant, it’s still a struggle and I think it will be for the foreseeable future. Jim Henry: What Mike says is very true. We also are in the Phoenix market and our RMR is more managed services, security contracts and what have you. Overall, we’re on plan or a little bit above plan for the year, but the reason we’re able to achieve that is through the diversification we have in verti-

al clients that are in expansion mode and have budgets. The other thing is we really tried to build our strategic action plan for the year, and forecasting is a big part of that. We work really hard with our account executives so we know what’s coming up during the next quarter. We have 30-, 60-, 90-day forecasts and we really drill into it. Hope is not a strategy. What’s the buying process that the client’s going to use? Is it going to be a bid project? How many people are going to bid? Is that really work we want to be spending a lot of time on? Can we go after more designbuild? Then we can predict because with growth like we’ve had we needed to predict, for cash-flow reasons, what’s coming in. We don’t want surprises. Henry: I just want to reinforce how critically important it is in the large integration business what Phil is saying because even good surprises are bad because they have ramifications. So

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you have to have that visibility out there, and if there is an expectation of something out there that’s good, you’ve got to plan for it because otherwise it’s actually going to have some negative impact. Aronson: Yes, if you can’t deploy that $2 million job that all of a sudden you get, it might be better that you don’t get it. All we have is our reputation. We’ve been in business for a long time, and if you don’t deploy well that’s just a huge black eye that’s hard to recover from. So you really have to know why didn’t we know about this project three, six, 12 months ago? We’ve been talking about RMR quite a bit and I wanted to specifically delve into managed services because it has generated such a buzz recently. What have been your experiences with it thus far? Nikel: Our RMR today is in service and maintenance contracts. I believe there is a place for managed service sales, and understanding the model that we have to build internally to support that type of sales activity is where I’m cautiously looking. I think as soon as you commit to a client that you’re going to manage their access — you’re going to provide a help desk and a method to have cards produced, and a system and a process — you better have that infrastructure in place and be able to fulfill that delivery. Exactly what that model should look like isn’t clear to me. It’s very clear, however, in the evolution of our business, that we need to build managed services and sell managed services. I think it goes beyond managing access, though. A network operations center is what I see in our future. The ability to actually support clients’ hardware and let them know that something has failed because we perhaps are checking to see if power is on or off on devices. We’ve successfully built and implemented for clients SNMP traps in order to manage their devices. We’ve taken that software, which manages it, and given it to our maintenance fellows who, on their Blackberrys, are able to see the integration and know when a camera dies on a transit system. I believe going forward there’s an opportunity to provide

that service to customers for a fee that will fit into our RMR model and managed services. Bradley: The ideal of recurring revenue is that where you can have hundreds of thousands of customers and you rarely have ever had to do anything for them. Monitoring has traditionally filled that niche. There is tremendous competition, of course, for that. Managed services I think are a way to create stickiness with your customers. Creating stickiness where once they get used to your services and what you’re capable of providing, they wouldn’t consider going anywhere else. Managed services fill that void. The problem is it takes a mindset and strategy that’s very different for a systems integrator. For us, recurring revenue is in our DNA. It’s fairly simple for us to understand the process of supporting it. We’re a 24/7 facility, always have been. We understand the level of customer service it takes to react quickly to those small needs. So we’re concentrating now on access control, managed video, hosted video and we’re doing some things in the bid market to create stickiness too with services beyond monitoring. We’re hosting more things and doing more things on the customer’s behalf. Energy management is another one of those categories. I don’t think it’s possible to hand off the concept of managed services and recurring revenue sales successfully to people who are used to swinging at the fence and doing big systems. I think you set up a small group of business solutions with dedicated people where that’s all they go out and get. If they come across the big elephant, they hand it over to the group that handles the big elephant. When they go on the street, they have one offer that simplifies life. There are not a lot of choices for the customer. This is the way we do it. If you want to do business with us and you want to put a small access system in, we manage it for you; this is how it’s done. That mindset is critical to being successful in this business. Henry: You want to be covering your nut with RMR and everything you do on the construction side goes to the bottom line. What I see is the rate of attrition of those

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INTEGRATOR EXECUTIVE ROUNDTABLE

traditional opening and closing monitoring accounts, that attrition rate decreases as you provide more complex managed services to the customer. So, seeing the industry that Mike’s in, looking at where the large systems integrators are and trying to get more of a mix of what we do, I’m not about to reinvent the wheel and try to go after the residential openings and closings. It’s a foreign concept for the DNA of our people. But embedding ourselves in

us because it simplifies their lives. It enables them to have greater visibility, control and awareness of their systems. Just like what we were talking about with sales; you don’t want surprises, good or bad. Customers don’t want surprises with their systems. If there is a problem, they want to know about it beforehand. Whatever we can do in preventive maintenance, whatever visibility we can give them that we saved downtime because we took preventive

“Managed services I think are a way to create stickiness with your customers. Creating stickiness where once they get used to your services and what you’re capable of providing, they wouldn’t consider going anywhere else. Managed services fill that void.” Mike Bradley, President Safeguard, Scottsdale, Ariz.

large customers in the vertical markets we have such great knowledge and providing an extended number of services, expertise, guidance and management of operations is where our focus on the RMR is. We were already doing that prior to our merger [Henry Bros. Electronics acquired by Kratos Defense & Security Solutions December 2010]. Kratos has a network product called NeuroStar they use to manage networks for mostly their DoD and government clients. So the synergy is obvious. We’re managing and doing health checks and whatnot on all the edge devices. Obviously, the network sits in between but often that wasn’t the domain we also managed. We left that up to IT. Now, we bundle that all together and give a complete dashboard on the functionality of their system. We feel this will really energize even further our ability to provide that higher level of a managed service. We want to encourage customers to continue to want to do business with

action, is excellent validation for them justifying the continued relationship of a maintenance agreement. Nikel: You become the trusted advisor. You do business in a different place in the corporation. Aronson: In the true integration business, we have to look at different recurring revenues, and it’s not alarm monitoring. It’s kind of too late; we’d have to buy a company. So we’re looking at different ways for recurring revenue. It is managed services. It’s augmented or embedded staff of IT people who are managing the software and hardware support agreements, the network, the servers, the storage, using WMI [Windows Management Instrumentation] to figure out if those hard drives are starting to heat up before they go bad. So it’s preventative maintenance. We also compete very well with our competitors when it comes to competency, staff and expertise. We try to get three-year contracts, and a lot of them aren’t just support contracts; they are

also services for if you’re building a new building, this is our contractor. So it makes the contract sticky. If you’re in a bidding process where you can often lose out, why not talk to customers about doing a long-term contract and competing for that contract? That’s how we build our business because now we know what’s coming up. We’re a trusted advisor through a contractual relationship. We can forecast that growth as opposed to the bid market. We did that 12 years ago, and you get a big job and you work on it and then you’re done with that job and you have to find another big job. Managed services offer predictability for growth. The network’s taken us more on the IT side. We started a professional services group with mostly IT people with networking backgrounds, and even consulting services about optimizing your system. I think that’s one thing the industry misses. We do training on systems after we install them and teach them about time zones, access levels, how to run the system, but we don’t know how they are going to want to use the system. We think there is a knowledge that we can have and a consulting practice that says, “Here’s what the systems does; here’s what you have today. What’s that gap of what you wanted to do?” Now we’re stickier to the client because we’re providing training. In fact, why don’t you just come in here and run this system in-house? Now you’ve become part of the company. Henry: Of course, that creates other issues where that individual, if you don’t cycle personnel through, then becomes a target for hiring by the end user. We all have examples of that having happened. But just because it happens on occasion, you still have to do it because it is the right thing. You just try to incentivize your people appropriately. Make sure the allure of moving into the end user environment is a little bit ominous to the talent you’re putting that investment in and training to that level. Aronson: One of the areas we find clients want this is from the past experience of training $8 to $10 an hour

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“To this point it has been like the Wild West where the end user is up to his own devices to do whatever he wants. He doesn’t have that pressure to be more compliant to a set of standards. It all comes down to, can he justify the ROI on what his capital investment is as well as his sustainment.”

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guards to manage their system. Those guards typically change every four to six months and they then need new training. Meanwhile, they are not doing the system backups, they’re not doing the archiving of the database and then the system will just blow up. Then there is a huge issue, so you go on down there and rebuild it. So we’ve sold those services to optimize our clients’ systems as a recurring revenue. We can have our own person be their IT support. Henry: Customers only spend money for two reasons: ROI [return on investment] or compliance. Unfortunately, there are not enough regulations and standards in our industry as exists in IT and fire. I think it’s coming, but it’s not here yet. So the importance of making sure you communicate and demonstrate that value proposition, the ROI of the risk mitigation you can provide through those managed services, is key because we don’t have the tailwind of compliance demanding sustainment. To this point it has been like the Wild West where the end user is up to his own devices to do whatever he wants. He doesn’t have that pressure to be more compliant to a set of standards. It all comes down to, can he justify the ROI on what his capital investment is as well as his sustainment. Aronson: A big thing we’re talking to clients about is government risk and compliance. For governments, the way to

show ROI is you go to the 10K [SEC filing containing all facts about a business]. You can find out what the risk items are for public companies and then tie the ROI against the governance, not just compliance. There is that governance and risk there that go together. We’ve been successful. And again, some of our security contacts don’t even know what a 10K is, but we’re showing them. Here’s the way you’re going to be ranked by the CEO if you don’t meet these governance requirements. Then there’s also bringing value to the organization. Yesterday, I was with Francis D’Addario [former Starbucks CSO] and he told me how when he was at Starbucks he showed the board and the Clevel that he helped their security department put $28 million to the bottom line. Was he able to get budget? Sure he was because you need a $2 to $3 million budget to put $28 million to the bottom line. When we talk to clients, most of them, if they really think about it, there is a way to show an ROI or value to the organization. If you don’t, their budgets are going to get cut. Let’s try a hypothetical, but completely possible, scenario. You realize you have to reduce operational costs by 10 percent. Where do you look and how do you do it? Where have you found there often to be some wiggle room?

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INTEGRATOR EXECUTIVE ROUNDTABLE

Bradley: I think thatâ&#x20AC;&#x2122;s a dangerous question because when you get to the point where you suddenly realize that, youâ&#x20AC;&#x2122;re not paying close attention anyhow. I think another question is in order that sort of answers this question. Why is it that in the past two or three years a good number of our businesses find ourselves more profitable as a percentage of revenue than we were before the recession? Some of us have found ourselves in a better position now. Weâ&#x20AC;&#x2122;re paying down debt faster than we used to. Weâ&#x20AC;&#x2122;re more efficient. Weâ&#x20AC;&#x2122;re actually creating higher profit margins as a percentage of the bottom line, maybe not necessarily top line revenue and gross profit revenue. The reality is weâ&#x20AC;&#x2122;re probably doing some things now we should have been doing all along. We made a very strong effort about two years ago to identify collections challenges and make it a focus of our

â&#x20AC;&#x153;A network operations center is what I see in our future. The ability to actually support clientsâ&#x20AC;&#x2122; hardware and let them know that something has failed because we perhaps are checking to see if power is on or off on devices.â&#x20AC;? Curtis Nikel, President Contava, Edmonton, Alberta, Canada

company. It made a huge difference in cash flow, profitability, strength with the bank, and operational efficiency. Then we had to ask ourselves why we werenâ&#x20AC;&#x2122;t doing this all along. Often cutting costs is a knee-jerk reaction to not facing realities or the brutal facts as they are presented to you. I think we should always be in the process. I think

all of us have learned some important lessons the past three years. Some of us learned them at a greater cost than others, but theyâ&#x20AC;&#x2122;re important lessons nevertheless for how we manage going forward. Nikel: Most companies when they meet a recession or difficult time often experience improved profits because

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they either are not spending on the future or not incurring costs they did before. But where are you in the lifecycle of your business? I always ask, “How are you reinventing yourself?” In our world, the cost cutting would come from process. Being an IT-type company, we’re very focused on process, and I think we allow for some sloppiness because we want creativity. Creativity costs money and it costs productivity. Process is good, but too much process creates habits and habits stop creativity. And to be of the future, you have to be creative. You have to reinvent yourself and find a place. Bradley: One of the things often overlooked is intelligence in the middle and lower level management of our companies. We have a sense as leaders that we’re the ones who need to make the decisions and we’re the ones who need to set the standard. But I think the question needs to be asked of every level of supervision and management. If we have an issue or a concern or if we see a need to create more efficiency, what would you do and how would you achieve it? At least then they own it. They may not be right all the time and some of those ideas may not bear fruit, but it forces everybody to be part of the process. I’m a believer in asking questions and seeking advice from other people. Nikel: I concur entirely. I have people who run the company; I don’t run the company. I work on strategies with them and talk about their thoughts and ask questions to stimulate them to have further thoughts. It’s not my job to cut the 10 percent; it’s the team’s job to cut 10 percent. And then working with them to be successful at it is how we handle it. Henry: There are always areas of reducing costs, but it doesn’t automatically mean the simple thing of just cutting ahead. There is a real art to driving efficiencies without throwing the baby out with the bathwater. Some smart person once said anything you can measure you can improve. It starts with the measurement, the commitment to the measurement and the acceptance of that from the installers who immediately think, “Oh, you’re over my shoulder. You’re try-

ing to see if I’m slacking off.” No, this is all about driving those efficiencies so we can validate the value you’re bringing. That way when you do have to make operational changes to reduce costs, you’re doing it intelligently and with a basis. Another piece of advice is not to spend time chasing rainbows that aren’t going to bear fruit. The amount of time, effort, resources and costs you put into proposals is significant. The qualification process on the front end, which is a little bit of an expense, saves you big time on your engineering team and sales guys running around chasing something that at the end of the day you could have said, “You know what? The price that this job’s going to go at, we don’t want.” So stop right now. Don’t do the theater. Aronson: Business is simple, it’s people, process and tools. So you get the right people in the right places. We look for people who can do multiple things, like a project manager or an engineer who can turn a screwdriver. Those are the kinds of people who are very important, who will stay with you in the down times. As for process, we take the lean SIGMA approach that if there is no value to what we’re doing then we need to get rid of it. We do lessons learned on projects that were above margin or below. We have a meeting and ask, “Why were we this way? Did we find a new way to do something?” We’re always looking to be as lean as possible because this is a tough business, and with the margins you can’t make mistakes. Then there’s the tools, and there are many out there. We’ve built our own tools to manage projects to really make it as efficient as possible so we’re not creating new spreadsheets, new databases. It’s a process that everybody knows and follows, and it gives the customer the predictability they want. There is no room for fat in security integration. There just isn’t. Every process has to have value while you’re doing it. ■ FIND IT ON THE WEB F There’s a lot more conversation from this T roundtable online at securitysales.com/ ro roundtable0811.

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Bright Ideas B IN INDUSTRY RESEARCH

Managers Aim to BUY LOWER, SELL HIGHER ©iSstockphoto.com/Diana Lundin

After several years of internal austerity and resignation to pricing erosion, security integrators are looking externally to turn their fortunes. The third annual Operations & Opportunities Report (OOR) shows company managers are eager to negotiate better deals on the goods they acquire and sell to curtail margin squeeze. The 2011 OOR also exposes the best technologies, services and markets to exploit. By Scott Goldfine

“I’m

as mad as hell and I’m not going to take this anymore!” That famous line from the classic 1976 film “Network” exemplifies the palpable change in attitude among owners and operators of installing security companies. In this case, the cause of the ire is contending with shrinking margins further inflamed by an extended recessionary period that in many cases also necessitated extensive cost-cutting. According to new research, managers have apparently hit the wall and are becoming weary of doing more, and more, and more (add infinitum) with less. To improve their lot, many of these security professionals are looking to negotiate better wholesale arrangements with their suppliers as well as pass along pricing hikes to their customers. That’s just a hint of the abundance of business intelligence unearthed from SECURITY SALES & INTEGRATION’s third annual Operations & Opportunity Report (OOR). This unique, original data identifies security integration and dealer companies’ top money-making and cost-sav-

ing ideas, leading growth opportunities, and surveys operational metrics. Nearly 200 executives, managers and others from across the nation, representative of all sizes of companies, were asked a host of questions targeting not only the best ways to boost profits and reduce expenses, but also the implications of implementation. Further, respondents were asked to identify the most promising new technologies and service offerings, as well as the most viable vertical markets. Several financial and operational questions were also included. Among the key changes from a year ago: profit margins are 9 percentage points below projections and down 7 points from a year ago; general access control and wireless networks are the most appealing technology areas; residential and elderly homes/facilities are rising markets; Internet/ Web-based monitoring is gaining tracking as a recurring revenue opportunity; vehicle fuel costs is cited as an increasing drain on the bottom line; and reputation/referrals continues upward as the leading boost to the bottom line.

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2011 OPERATIONS & OPPORTUNITIES REPORT

REDUCING COSTS

INCREASING PROFITS

If you had to identify a primary way to reduce costs in your business, what would it be?

If you had to identify a primary way to increase profits in your business, what would it be?

Increase productivity and inefficiencies of technicians

Sell more to existing client base

26.4%

31.8%

Negotiate lower prices with suppliers

26.6%

Minimize inventory

7.8%

Do jobs/projects right the first time

25% Raise prices

15.3%

Replace gas-guzzling vehicles with alternative fuel vehicles

7.1%

Reduce staff

Increase marketing

13.2%

6.5%

Allow employees to work from home

3.9%

Reduce marketing spending

3.9%

Salary freezes/reductions

3.2%

Cut hours

1.3%

Close store(s)/retail location(s)

0.6%

Shift reductions

Negotiating lower prices with suppliers jumped nearly 11 percentage points from a year ago, indicating respondents may be looking to make up for margin shortfalls on the wholesale side. Reducing staff was almost halved from the previous study.

Use less expensive equipment 5.6% Take smaller jobs 4.2% Increase employee morale 1.4% Increase work hours 1.4%

Raising prices rose by more than a third from the prior survey, further supporting security contractors’ quest to turn back shrinking margins. Taking on smaller projects to enable higher volume more than quadrupled from the previous research.

Other (please specify)

0.6%

7.6%

Other (please specify)

6.5%

What would be the main issues in implementing that cost reduction? (Select all that apply)

What would be the main issues in implementing that profit increase? (Select all that apply)

30.5% 26% 26% 20.8% 20.8% 16.9% 13% 3.9%

35.5% 29.8% 17.7% 15.6% 12.8% 7.1% 18.4%

Maintaining quality of installations and/or technical service Maintaining employee morale Negotiating or renegotiating with suppliers Administrating it Maintaining level of customer service Assessing actual cost savings

Negotiating or renegotiating with supplier pricing ascended 9 percentage points from the 2010 data. Maintaining quality of installations/technical service took over the top spot from maintaining employee morale, which sank by 6 percentage points.

Maintaining company image

Maintaining quality of installations and/or technical service Maximizing efficiencies Incentivizing salespeople to sell more Motivating employees to work harder Tracking actual profit increases Equipment support and failures Other (please specify)

Respondents expressed concern about being able to maintain the quality of installations/technical service while boosting profits. That issue gained almost 10 percentage points from a year ago. Sales incentives dropped by more than 8 percentage points. Marketing budget was among “other” responses.

Other (please specify)

How could those issues best be overcome? Better training/education Better deals with suppliers Better management/supervision Better employee performance Pay more attention to costs

Getting better deals with suppliers came in at No. 2 despite not making the list in the prior study. Better employee performance and paying more attention to costs were also absent in 2010. About 57 percent of respondents say they have recently implemented a cost-saving measure.

How could those issues best be overcome? Better training/education Offering incentives/bonuses Better supervision/management Better customer service Better internal communications

More respondents have realized the importance of customer service where it comes to profitability as that issue was excluded from 2010’s results. Better internal communications likewise bows into the list this goround. Some 62 percent have recently implemented a profit-raising idea.

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2011 OPERATIONS & OPPORTUNITIES REPORT

NONRECURRING REVENUES If you had to identify one type of TECHNOLOGY to generate more NONRECURRING REVENUES, what would it be? General video surveillance/CCTV 23.1% Standard IP video surveillance % 12.7 Megapixel IP video 11.9 % General access control 10.4 % Fire alarm systems 9.7% Wireless networks (includes mesh) 9% Mass notification 7.5% Managed access control 6% Wireless mesh networks 5.2% Other (please specify) 4.5% General access control, with more than a 4-percentage-point increase, gained two rungs on the ladder of technologies for generating more nonrecurring revenues. Wireless networks added 3 points. Megapixel video lost 5 points.

If you had to identify one MARKET to tap into to generate NONRECURRING REVENUES, what would it be? Government 15% Health care 13.5% Commercial offices 12.8% Residential 12.8% Elderly homes/facilities 9.8% Industrial 9.8% Hospitality 6% Retail 5.3% Financial institutions 4.5% Education 2.3% Other (please specify) 8.3% While still claiming the top slot, the market sort of collapsed for government the past 12 months as it sank 11 percentage points in this poll. On an upward trajectory were residential (up almost 5 points) and elderly homes (4 points).

What would be the main issues in implementing that technology? (Select all that apply)

51.1% 41.2% 32.1% 24.4% 15.3% 11.5% 1.5%

Training Sales & marketing Costs Developing pricing model Staffing Codes, regulations and/or standards

Issues like training, costs and developing a pricing model are more conspicuous on security contractors’ radar than ever. They increased, respectively, by 8, 10 and 9 percentage points from the previous study. Codes, etc. also collected an additional 3.5 points.

Other (please specify)

What would be the main issues in tapping into that market? (Select all that apply)

56.4% 26.6% 21.1% 17.3% 16.5% 14.3% 8.3%

Sales & marketing Training Codes, regulations and/or standards Costs Developing pricing model Staffing

Apparently challenges are becoming more imposing as all issues rose except developing a pricing model. Top three positions, sales & marketing, training and codes, etc., picked up, respectively, 2, 10 and 4 percentage points.

Other (please specify)

RECURRING REVENUES If you had to identify one SERVICE to tap into to generate more RECURRING REVENUES, what would it be? Maintenance/Service agreements

34.4%

Video monitoring

18%

Remote managed access control

11.7%

Internet/Web-based monitoring

10.9%

PERS

7.8%

Fire alarm inspections

Wireless monitoring

4.7%

Video guard tour Other (please specify)

3.1% 2.3%

Maintenance/service tightened its hold atop this list and now almost doubleups its closest rival for RMR service opportunities. The much-ballyhooed “cloud” is felt as Web-based monitoring rose almost 2 percentage points.

What are the main issues in offering that recurring revenue service? (Select all that apply)

43.8% 30.5% 26.6% 21.1% 15.6% 7.8% 7.8%

Sales & marketing Developing pricing model Training Staffing Costs Codes, regulations and/or standards Other (please specify)

Training edged up nearly 2 percentage points while staffing climbed more than 4 points. Sales & marketing, developing a pricing model and costs all lost 2-4 points. About one in four respondents say they have recently begun offering a new recurring revenue service.

NOTE: Where applicable, graphs not adding up to 100 percent are due to rounding.

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2011 OPERATIONS & OPPORTUNITIES REPORT

GENERAL QUESTIONS What is the single GREATEST DRAIN on your company’s bottom line? Slow economy Employee (salaries, insurance, etc.) Overhead (G&A, rent, taxes, etc.) Clients slow to pay Vehicle fuel Installation overruns Labor costs/Overtime Marketing/Advertising Poor estimates Call backs Poor employee performance Poor time management Overstaffing due to cylindrical sales

28.2% 26.6% 12.1% 8.9% 7.3% 2.4% 2.4% 2.4% 2.4% 1.6% 1.6% 1.6% 0.8%

The effects of the recession are by no means past history as slow economy gained more than 12 percentage points to overtake the top spot. Vehicle fuel more than doubled from a year ago.

What is the single GREATEST BOOST to your company’s bottom line? Reputation/Referrals 21.1% Customer loyalty/satisfaction 19.5% Monitoring/RMR 16.3% Good employees/performance 15.4% New sales 11.4% Large contracts/accounts 4.9% Extended service plans 2.4% Rising crime 2.4% Video sales 2.4% Crews staying on schedule 1.6% List price sales of replacement parts 0.8% Reputation/referrals and customer loyalty/satisfaction added to their percentages atop this list versus a year ago. Sliced almost in half was large contracts/accounts. New sales also fell.

Installing Company Profit Margins Average targeted percentage of return:

Average actual current percentage of return:

Not selling maintenance/service contracts

Not charging enough

31.1% 18% 13.1%

Not charging for design/ consulting services

12.3%

Not upselling customer

Making enough use of wireless technology Not cultivating more monitoring RMR Offering fixed product lines Fully implementing structured wiring Outsourcing Software support agreements Other (please specify)

5.7% 5.7% 4.1% 3.3% 3.3% 0.8% 2.5%

Not upselling customers increased by 3 percentage points while not charging enough receded by almost 7 points. Not charging for design/ consulting services also experienced a boost.

Would you say your company is financially better off than it was three years ago?

In a flip-flop from a year ago, security contractors are projecting higher profit margins and realizing a lower rate of return. This compares to a target of 32 percent and actual of 35 percent in 2010.

In what ways are security contractors leaving “MONEY ON THE TABLE?”

Yes

42% 58%

Even though, as shown in proft margin graph left, many respondents are falling short of projections in 2011, nearly six in 10 believe their business is better off than it was three years ago. That matches last year’s figures and makes sense since 2008 was the height of the recession.

The prices manufacturers and wholesale distributors charge for security equipment are …” Mostly fair but certain items are overpriced

Generally fair and reasonable

Somewhat overpriced

For the most part a complete rip-off!

2.4% 43.2%

40%

13.6%

A bargain!

0.8%

Some security contractors are taking issue with wholesale equipment pricing. Those saying certain items are overpriced rose more than 2 percentage points, and those calling items a bargain declined by more than 3 points.

If you own your business, what multiple would provide enough incentive for you to sell it? Less than 15x

7.3%

15x to 24x

25x to 34x

35x to 44x

15.6%

21.1%

30.3%

45x to 54x

55x or greater

11.9%

13.8%

In general, owners are seeking more money to part with their companies. Those selecting a multiple of 35x or greater rose 3 percentage points. The most prevalent is the 35x to 44x range, which grew by more than 6 points and attracted nearly a third of all respondents. 52 securitysales.com • AUGUST 2011

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Bright Ideas B SSPECIAL REPORT: ALARM MANAGEMENT

False Alarm Reduction Is at Custom Alarm Proven techniques that cut false alarms and police dispatches are business as usual for Custom Alarm. The company’s assimilation of practices like twocall verification and following up on all false alarms helped it earn the 6th annual Police Dispatch Quality (PDQ) Award. Find out what makes its outstanding false alarm management program tick.

By Scott Goldfine

he ‘C’ in Custom Alarm could just as well stand for its commitment to excellence, outstanding customer service or continuous improvement. The latter ingredient, along with three others — deploying SIA CP01-compliant control panels and enhanced call verification (ECV), and proactive internal and external communication — played particularly prominent roles in the company capturing the 6th annual Police Dispatch Quality (PDQ) Award. The honor validates Custom Alarm’s efforts and success in effectively managing alarms, minimizing false dispatches and partnering with law enforcement. Established in 2005 by the Security Industry Alarm Coalition (SIAC), False Alarm Reduction Association (FARA) and SECURITY SALES & INTEGRATION (SSI), the PDQ program raises industry-wide awareness, motivates alarm companies to be proactive and provides workable models for others. The PDQ Award annually recognizes the security company that best demonstrates an enthusiastic, cooperative and successful effort in alarm reduction strategies. Three judges grade applications that address 15 categories. This year, Custom Alarm edged out finalists Monitronics and Bay Alarm for the trophy, which was presented at the Electronic Security Expo (ESX) in Charlotte, N.C. In its winning 43-page submission, Custom Alarm listed a

2010 police dispatch rate of .19 within the Rochester, Minn., area where its headquarters and UL-Listed and FM Approved central station are located. That rate was verified in a letter of support from the chief of police. “False alarms take police away from real emergencies, risk lives, and make each alarm seem less credible,” wrote Chief Roger Peterson. “The Rochester Police Department supports the attention that Custom Alarm gives to false alarm prevention. Custom Alarm has maintained a professional and cooperative relationship with the police department in working toward a mutual goal of minimizing false alarms so officers can spend their time on the street responding to emergencies and working proactively with the community in addressing crime.” Founded in 1968 by President and CEO Leigh Johnson, the residential and commercial security and sound systems provider employs more than 70 people, and has branch offices in Winona and St. Paul, Minn. Brinkman is one of two of Johnson’s daughters — along with Director of Marketing and Vice President Nikki Johnson — who has helped build a successful enterprise whose accolades extend beyond PDQ honors. Custom Alarm has also received notices from the U.S. Chamber of Commerce, Walmart, Notifier, Bosch, United Way and SSI’s SAMMY Awards. In the case of the PDQ distinction, Custom Alarm kept pushing forward

and strengthening its alarm management program after having been a runner-up on several previous occasions. “The first time we came close to winning this award we were simply honored to be mentioned among those finalists,” says Nikki Johnson. “With each passing year, we became more determined to earn that top award. We worked harder on evaluating our program, the changes we could make and what more we could do. Having come so close all these years and worked so hard to get here makes winning all the more special to us.” Alarm system owners and responders alike are now benefiting from Custom Alarm’s finely honed approach. These techniques and policies apply to outbound communications, marketing materials and contracts; sales and installation practices; customer and installer education/training; industry-established standards like CP01 and ECV; follow-up on false alarms and problem accounts; and working closely with local law enforcement.

Keep Customers’ Eyes Wide Open Often the first representation a company has to a prospect is through its advertising and marketing materials. Thus, it is important ads and literature provide a realistic portrayal of how alarm systems function, and what response procedures are when an alarm occurs. This clear message must be consistently carried through the entire

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Customary

So as not to skip any key points, during the sales phase Custom Alarm representatives follow a checklist to educate customers on how a system can be tailored and used according to their unique needs and lifestyle. This includes discussing exit and entry doors, and how the system can be armed in different ways. The rep makes certain the customer fully understands how false alarm fees are incurred from local authorities and, if applicable, explains the permit process.

Minimizing System, User Errors

A winning team: Custom Alarm President/CEO Leigh Johnson is flanked by COO Melissa Brinkman (left) and Director of Marketing and Vice President Nikki Johnson.

customer experience, including sales pitch, contractual agreement, installation, monitoring, and ongoing service and maintenance. Custom Alarm gets clients off on the right foot by spelling out its alarm dispatch and false alarm procedures, and false alarm prevention program in its contracts. In addition to outlining standard terms and customer responsibilities, the monitoring agreement discusses ECV (also known as two-call verification) and includes a section covering false alarm charges that the salesperson reviews with the customer. An emergency contact information form, or call list, explains alarm response and how to prevent false alarms. Custom Alarm has found exercising ongoing vigilance to keep call lists up to date can be critical for nipping unnecessary dispatches in the bud. The compa-

ny counsels customers on how to select keyholders and seeks mobile, home and office numbers for each person. In 2010, account verification letters and forms were mailed to all monitored alarm customers to check accuracy of the information on file. The initiative drew a participation rate of 82 percent, most of which involved account changes. “We have a systematic way of updating and then logging changes to ensure the updates are done on each response,” says COO Melissa Brinkman. “We feel the ROI [return on investment] outweighs any costs because our dispatchers have more confidence in the people they are contacting and know they are able to verify alarms prior to dispatching law enforcement. The peace of mind knowing if a customer’s alarm goes off we can reach someone to verify it prior to dispatching the police is immeasurable.”

As it did when measured against most PDQ criteria, Custom Alarm earned high marks in the key installation areas of equipment, installer training and customer instruction. SIAC recommends control panels meet the Security Industry Association CP-01 standard, with all programmable options set to default, and all applicable UL standards. These are practices Custom Alarm has adhered to the past five years. In 2007, the firm introduced a loyalty upgrade program to help longtime customers migrate to newer alarm systems at virtually no cost to them. The upshot of enticing them to put their older technology out to pasture is ensuring the system operates with fewer problems — and less chance of false alarms. “This was a big investment on the front end for us as a company, but the continued loyalty by these customers as well as knowing their systems are updated and communicating on the latest technology was worth it,” says Nikki Johnson. ➞

Once an installation is complete, a Custom Alarm technician shows the customer how to use their new system properly, discusses exit and entry delay times, and how to prevent false alarms. securitysales.com • AUGUST 2011 55

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CUSTOM ALARM’S PDQ AWARD-WINNING FORMULA

Custom Alarm has 10 techs with some level of NICET certification and 26 certified for power-limited systems. Online training was established with all departments having required courses. Employees are expected to train for at least 12 hours beyond what’s required.

Custom Alarm has 10 technicians with some level of NICET certification, and 26 techs who are state certified for power-limited systems. In 2010, an online e-learning training program was established via Total Training Network (TTN) in which each department has required courses to complete. Employees are expected to undertake at least 12 hours of annual training beyond what’s required. “We have set up a space arranged in classroom style with adjacent computer stations for online training equipped

A 6-Step Anti-False Alarm Formula By Leigh Johnson

1. 2.

Buy good equipment (the best you can find). Train your people (the best you can find and keep them) who are installing the equipment for consistent and quality installations.

3. 4.

Train the end user, and then retrain them.

Have high expectations of your central station dispatchers to identify issues and work to solve them before they become problems.

Follow up on all false alarms, determine the cause and rectify.

Train your service people who retrain the users. Offer inspections of the systems to make sure there are no problems.

Leigh Johnson founded Custom Alarm in 1968 is its President and CEO.

Custom Alarm places a premium on follow-up. Central station personnel review a daily dispatch record to identify alarms reported as false and plan to call those subscribers. Dispatchers determine the nature of the false alarm and offer service based on its cause.

with headsets for multiple users,” says Johnson. “It is used for departmental or technical training sessions. We also have a product rollout group to handle anything from new motion detectors to security panels. The team lays out details from product literature for salespeople to training requirements for technicians.” Once the installation is complete, a technician shows the customer how to use their new system properly, discusses exit and entry delay times, and how to prevent false alarms. The training includes telling them how to change the master code and add additional user codes. Other points include: “stay” and “away” arming levels; how to cancel alarms if they are accidentally set off; how to obtain service if the system malfunctions; and how variables such as an answering machine, call waiting or DSL may impact the alarm system.

Why It’s Nice to Call Twice Custom Alarm then smoothly hands new customers over to its central station. Hallmarks of its alarm management strategy on the monitoring side of the business include use of ECV and contacting customers after every false alarm. “ECV has really changed the landscape of the way we dispatch on alarms,” says Brinkman. “For example, in the first five months of 2011, without our two-call verification program we would have seen a 23-percent increase in the number of law enforcement dispatches. Had we called law enforcement instead

of a second keyholder, they would have all resulted in false alarms.” Custom Alarm also places a premium on follow-up. Central station personnel review a daily dispatch record to identify alarms reported as false and schedule those subscribers to be called. Dispatchers determine the nature of the false alarm and offer service based on its cause. The outcome of the call (service ticket written, customer declined service, additional training needed, etc.) is logged in the account history. The information is then entered into a false alarm activity report summarizing all dispatches, history of the call, cause of the alarm and result of the dispatch. If law enforcement had been dispatched, Custom Alarm follows up with them for an update and adds that to the account as well. If law enforcement had been dispatched without the central station being able to contact a keyholder, the next day the customer is notified so as not to be surprised if they receive a notice in the mail from the police. Additionally, a disposition of events report is distributed to salespeople so they might personally call their customers to see if there is anything they can do to help. And how does Custom Alarm handle troublesome accounts where false alarms spiral out of control? “We do not have any accounts that have a bad false alarm record,” says Johnson. “We have such proactive procedures in place that we do not have anyone who is problematic. We also offer customers that have

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CUSTOM ALARM’S PDQ AWARD-WINNING FORMULA

Founded in 1968, Minnesota’s Custom Alarm is a residential and commercial security and sound systems provider that employs 70+ people, and has offices in Rochester, Winona and St. Paul. The firm operates a UL-Listed central station out of its Rochester headquarters.

Custom Alarm was named winner of the PDQ Award at ESX in Charlotte, N.C. Shown (l-r) are Custom Alarm’s Leigh Johnson, SSI’s Scott Goldfine, Custom Alarm’s Melissa Brinkman and SIAC’s Stan Martin.

false alarms free system inspections to ensure everything is working properly.” Custom Alarm also accepts electronic cancellations from the system’s keypad following an alarm activation, but still calls to make sure everything is OK. Systems are set up to automatically test at least once a week, with any issues being noted and addressed. Caller ID on incoming calls to the central station in many instances helps operators know immediately who they are speaking with. There are three other essential factors contributing to Custom Alarm’s high standard of alarm monitoring: dispatcher training, owning and operating its own facility, and its familial culture. Besides the availability of training resources discussed regarding installers and technicians, all of the company’s dispatchers and supervisors are now required to complete the Central Station Alarm Association’s (CSAA) 40hour online certification course. Dis-

patchers also have SIA certifications that are valid nationwide. Having its monitoring center located within the company’s headquarters helps Custom Alarm produce a well coordinated effort. Managers of sales, operations and customer services/dispatch team can interface on a regular basis. “We see a distinct advantage to being one company working together in one building,” Brinkman says. “If there is an issue everyone is easily accessible to help resolve it; it particularly helps to have the salesperson involved. Every department brings a different perspective on how to best take care of the customer.” While size or ownership should not be determinants of the energy devoted to an effective alarm management program, there can be something to be said about a smaller, family friendly atmosphere. “As a smaller security company with our own central station in a concentrated market we are able to work with the key people in law enforcement in the communities we service,” says Brinkman. “Virtually all of our dispatchers know our ‘regular’ customers, and the customers know our dispatchers by name. We are able to build rapport and loyalty.”

Clients, Police Must Be in the Loop Relationship building is a pervasive theme underlying effective alarm management. This applies to both customers and responding law enforcement. It’s about open, ongoing communication to address their individual needs and keep them engaged. Immediately following an installation, Custom Alarm sends the new customer a welcome E-mail that includes

a link to the company’s Web site where they will find common causes of false alarms and reduction tips, and permit information. The link is also embedded in all outbound E-mails and the company’s monthly e-newsletter, which always highlights a specific false alarm reduction tip. Welcome packets that include an alarm system quick guide cheat sheet and a refrigerator magnet with the central station’s phone number are also mailed out. Printed information on the back of subsequent invoices reinforce the company’s alarm response procedures, tips for reducing false alarms and a note on keeping keyholder lists updated. As demonstrated by the police chief’s comment at the outset, Custom Alarm excels in forging a cordial partnership with local law enforcement. “We have established a great deal of trust on both ends of the relationship,” says Johnson. “Additionally, we are proud of the professional relationships we have with the fire departments.” As an example of this collaboration in action, the company has agreed with police to immediately dispatch on commercial alarms between the hours of 10 p.m. and 5 a.m. before contacting a keyholder. This has resulted in quicker dispatches and several apprehensions. In this circumstance, the police department has agreed to waive any false alarm fees that would otherwise be assessed. In 2007, Custom Alarm got buy-in from fire responders in the development and implementation of a CO detector monitoring procedure. The firm provides those customers with codeprotected lockboxes to hold entry keys the fire department can access to avoid having to break down the door. Custom Alarm also distributes to police and fire departments a monthly alarm report of calls by county. Authorities say these reports help them double check their records. “In our community, the police response to burglar alarm systems situation is great,” says Brinkman. “We can attribute that to a great relationship that has been built over the years with our local law enforcement. The key is having an open line of communication.” ■

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Bright Ideas B M MANAGEMENT

MAKING the MOVE to

Courtesy Diebold

Managed Access

By Rodney Bosch

t is no great stretch to understand why hosted or remotely managed access control services are fast becoming one of the leading means for installing security contractors to increase recurring revenue. Shrinking margins on products and other squeezes on profits are forcing dealers and integrators to alter their traditional business model. End users across a range of market niches are feverishly hunting for organizational cost reductions and increased operational efficiencies. The nexus between the integrator and the customer is a service the customer will see value in and therefore be willing to pay a monthly fee to receive it. Managed access control provides that special connection to the customer. Generally, at a basic level, the customer is provided with the hardware and installation for the doors they want to control. A Web-based portal is used by the client to manage their own software-based system; the monthly fee includes hosting the access control database, plus technical support if needed. Among an array of upsell opportunities, the integrator can handle all badge printing and card administration, assign access rights, print reports, conduct health checks of the access control system, offer service contracts, and much more.

SSI interviewed several installing security contractors whose companies have recently undertaken the transition to offer managed access control. If youâ&#x20AC;&#x2122;re considering a move into this new service offering, there is much to learn from the shared experiences of these providers.

Overcoming Internal Obstacles Providing managed access control services makes good business sense for multiple reasons, which will be explored in this article. Still, successfully adopting the software-based services model oftentimes entails organizations first overcome significant impediments. This

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BUILDING RMR

D. Any of the above. Choose the AD-Series from Schlage®. From networking options and credential readers to finishes and levers, it’s designed for whatever you have in mind. Visit schlage.com/ad-series to see how customizable this solution can be.

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can be especially true for installing security contractors whose business structure has long been based on selling and installing security hardware. “What we found is you have to rebuild a lot of internal processes,” says Tim Feury, CEO of Marietta, Ga.-based Altec Systems. “We’ve been doing it for two years and every time you think you are getting close, you uncover a whole bunch of other processes you need to revisit.” Among the internal changes needed to offer managed services at Altec, a member of the PSA Security Network, Feury created a customer support structure that mirrors an IT help desk. “Tickets come in most of the time via E-mail or through our customer portal,” he says. “We are able to set up workflow and various things to route it to the right person.” Kansas City, Mo.-based All Systems launched its managed access control portfolio in earnest in 2009 when it provided a Brivo solution to a local school district. The district’s IT department appreciated the idea of someone else managing a technology that was unfamiliar to them, no matter that it resides on the district’s network. School administrators liked the fact they had an experienced security professional to manage cards, schedules and access rights. While signing on the school district proved to be a major success, All Systems has experienced its fair share of growing pains. Its first major obstacle was changing the sales and marketing effort to focus on recurring monthly revenue (RMR) rather than looking for big ticket systems, says Scott Lord, the company’s vice president. “Our business model has always been turnkey integrated solutions on a mid to large scale. I created a new division of our sales team, complete with a different compensation package, to make the selling of managed services a priority,” he says. “It simply did not work well to have ‘system sales’ people adding this to the sales playbook.” For Guardian Systems, a Nashville, Tenn.-based Honeywell Commercial Security Systems (CSS) authorized dealer, ramping up its IT skillsets has been

a priority since jumping headlong into managed access control services about one year ago. “We had to go out and add IT people to our staff and that was a little more expensive than what we were anticipating,” says Jason Tolleson, a sales/project manager for the company. So far Guardian Systems currently staffs two full-time IT personnel with plans to transform its tech staff even further. “Ultimately, at least half of our techs will be formal IT,” says Tolleson.

What Markets Are Hot? Cold? So which market niches are proving to be fertile ground for managed access control solutions? Suffice to say, many. However, there appears to be a good deal of agreement among service providers that enterprise-level and other large-scale end users can be a tough nut to crack. “While we work closely on many largescale, highly complex projects for the government and critical infrastructure segments, we typically find that these segments have in-house resources dedicated to managing access control,” says Jacky Grimm, director of security solutions at North Canton, Ohio-based Diebold. Among its key customer segments since introducing managed access control services in 2008, Diebold has experienced its widest success with financial institutions, Grimm says. For All Systems, its primary market verticals — health care and education — have shown little to no interest in these services. Health-care facilities have the staff and in-house support to manage their access control. Many schools either have the personnel or are reluctant to fund a recurring model. “Schools also have fewer needs for constant modifications to the access control, so the management of it is small in most cases,” says Lord. ➞ F FIND IT ON THE WEB The online version of this story includes T interviewees sharing insights and advice in on how other installing security contractors can more smoothly transition to offering managed access control services. Visit securitysales.com/managedaccess0811.

www.securitysales.com/freeinfo/18153

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Courtesy Brivo Systems

BUILDING RMR

Hosted and remotely managed access control systems can reduce overall expenses for end users by eliminating the need to install software and house servers at their facilities. Above, a property manager uses a Web-based portal to administer a managed access control system.

Instead, All Systems’ success has come from the commercial sector, predominantly property management companies. Interestingly, more and more property managers are also managing Internet services for the building and tenets, which has opened a proverbial door for managed access services. “Many of them have opted to pay an outsourcing IT firm to [manage Internet services],” Lord says. “So being able to provide managed access in the same way, especially since it is IP-based, fit the model the customer was already familiar with.” In Houston, Texas Technical Systems (TTS) recently launched a hosted AMAG solution in collaboration with Integrator Support, a provider of remote monitoring services for video and access control systems. After working diligently to train its sales staff, among other internal preparations, TTS is finding it can bring the most value to small- and medium-sized businesses, according to DJ Ramirez, a company vice president. These are the customers — law firms, doctors’ offices, etc. — with a receptionist who in the past has been charged to manage the access control system. But then he or she leaves the position and suddenly the customer is without quality service, Ramirez explains. TTS steps in to provide them a hosted solu-

tion that includes programming, badge printing and running reports. “Our strongest niche right now is the customer in Class A-type real estate. Maybe they have leased a halffloor, one floor or a couple floors. Maybe they have their own free-standing building. There is lots of opportunity,” Ramirez says.

The Price Is Right … Not So Fast While there may be a general consensus on which market segments offer the best prospects, going about how to price managed access control services remains in flux. Call it a work in progress for many service providers. “There are a couple of ways to do it. Sometimes we’ll get an opportunity and we’ll experiment,” says Feury. “The goal is to get the RMR. The pricing around that is to try and get what the market will bear.” As Feury explains it, the end user is probably more willing to pay a higher monthly fee when offered a lower upfront cost. Altec Systems has experimented anywhere from full MSRP for a reader and a $30 per month charge, F FIND IT ON THE WEB SSI’s three-part series “How to Grow RMR S With Managed Access Control” features W an in-depth examination of the business model. Check it out at securitysales.com/ growRMRmanagedaccess.

down to free installation for a reader and $100 a month for hosted services. “We tend to see models anywhere from $1,200 to $1,500 and a base charge of around $50 for hosting, and whatever you can get for additional readers,” he says. “If I had all the cash in the world I would price everything at zero, but I have to have a balance.” Guardian Systems generated a pricing sheet to break down cost depending on such factors as the number and type of doors, and the number of employees to determine the client’s managed access cost. The company also utilizes a proposal system, facilitated by a lone estimator, to ensure each prospective client is actually pitched a managed access system. “When each individual sales rep was doing their own proposals, there was no governing authority per se to see whether or not they even presented the option for managed access,” Tolleson says. “We have gone so far as getting the customer to initial they are declining the managed access portion of the contract. That way we know it was presented.” As TTS continued to tweak and refine its pricing structure, the company discovered the contract for managed services was unique unto itself as well. Contract administration becomes a lot more intensive when hosted services are involved, Ramirez says. “We have to make sure we are stressing to the customer we are hosting your security services, but we are not replacing your burglar alarm system as such. We have to spell that out.” Aside from working out numerous kinks, all sources interviewed for this story expressed a great deal of optimism for the future of managed access control services in their respective businesses. For instance: “It took nearly two years for us to adjust to the RMR model,” Lord says. “It is changing the way we do business, and frankly, the marketplace is turning more and more to outsourced resources rather than installed systems.” ■ Rodney Bosch is Managing Editor of SECURITY SALES & INTEGRATION. He can be contacted at rodney.bosch@securitysales.com or (310) 533-2426.

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TECHNOLOGY TRENDS

HANDY USES for BIOMETRICS

By Jennifer Toscano

System Type Overview A biometric reader can be used as a standalone device that protects a single critical access point or integrated into virtually any new or existing access control system on the market. You can

Installing contractors are discovering that biometric devices, once a much maligned technology segment, offer practical solutions to reliably meet their clientele’s security needs. Learn how easy it is to eliminate keys or cards to reduce administrative costs, plus achieve other significant efficiencies. customize security levels, time zones, holidays and languages based on your client’s unique needs. Optional template management software lets readers form a system that communicates alarms and transactions in real-time, creates activity reports, enables supervised onsite or remote user enrollment, and allows

o you count yourself among the legions of security professionals who have long been leery of biometrics? While institutional misgivings about biometrics are certainly not unfounded, technological advances have allowed these devices to enter mainstream application with ease. Today, biometrics that are simple to administer are commonly being implemented across a range of market niches. Hand geometry readers, for instance, are especially easy to install and maintain. In many cases, replacing card readers is simply an unplug-plugand-play operation. These devices get people into buildings and rooms quickly and can include a variety of options, such as letting an employee quickly check accrued vacation time. Plus, threshold levels are easy to control; think tightening access control in a nuclear power plant while loosening the level at a spa. Around the world, hundreds of thousands of biometric hand geometry readers are in use, thanks to trusted reliability and convenience. Let’s take a look at the product types available to installing security contractors, and the many increased business efficiencies and benefits end-user customers can realize.

you to set temporary access privileges. Units will work without fail even in harsh conditions. The primary function of any biometric device is to verify the identity of an individual. Access control, however, requires the ability to identify the person, plus unlock a door, grant or deny access based on time restrictions, and monitor

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Scan each visitor’s ID automatically and print a customized badge in 20 seconds or less. Thousands of organizations worldwide have replaced their paper guest log with EasyLobby to improve their security and manage visitors more professionally.

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EASY-TO-USE BIOMETRICS

wiring is nearly identical to the card reader’s wiring. In this mode, the biometric device essentially works with the access control panel in the exact same way that a card reader does. The card reader output port of the biometric is connected to the panel’s card reader port. When a person uses the biometric, it outputs

That’s what embedded biometrics add to a system. When biometrics are embedded, no PC nor other IT elements are involved in managing the database Standalone systems — Numerous biat the door. In some instances, this levometrics are available in a standalone el of integration can be achieved withconfiguration. Such devices are not out reporting to an external access cononly a biometric, but also a complete trol system. door controller for a single door. UsEmbedded systems come in two ers are enrolled at the unit and their different varieties. One has biometric template is stored lobeen used for some time and cally for subsequent compariis seldom even thought of as son. The actual comparison is an embedded system. It’s the accomplished within the unit aforementioned standalone biand a lock output is energized ometric reader, which managdepending on the outcome. es biometric templates within the reader. The other is newer, Networked systems — Many where the biometric template access control applications management is actually perhave a need to control more formed by a card. than one door. While multiple As an alternative to a keypad, standalone units could be emsome biometric readers also have ployed, a network of biometric a card reader input capability, the readers offers many advantagmost common being proximity es. The most obvious is centraland smart cards, although othized monitoring of the system. er technologies are also supportAlarm conditions and activity ed. At the biometric unit, the user for all the doors in the system swipes their card, which contains are reported back to the PC. All their ID number. If verified, that transactions are stored on the As an alternative to a keypad, some biometric readers also card number is sent up to the pancomputer’s hard drive and can utilize a card reader input capability, the most common being el for a decision. be recalled for a variety of user- proximity and smart cards. At the biometric unit, the user swipes their card, which contains their ID number. If one is not authorized to enter, customized reports. Networked systems also provide the ID number of the individual if, and the reader at the location, without checking elsewhere, tells that person they canconvenient template management. Al- only if, they are verified. The format of the output is consisnot enter. Likewise, if authorized, the though a user enrolls at one location, person can enter without the reader havtheir template is available at other au- tent with the card technology used by ing to verify from a remote location. thorized locations. Deletion of a user or the access control panel. Once an ID changes in their access profile is sim- number reaches the panel, it is handled ply entered at the PC. Some biometric as if it came from a card reader. The deAdded Layer of Smart Protection systems store all information in the PC termination of granting access is made Integrating biometrics with cards where template comparisons are also by the panel. The access control panel, and/or smart cards is quickly becomperformed. Others distribute template not the biometric, handles door control ing a more common solution. There’s a information to the individual readers and monitoring. very good reason. With traditional card at each door. Either way, the net effect access, in the time span between when of template management is the same. Embedded Wares Thwart Hacking a badge is lost to when it is subsequently reported missing, that badge is still Breaches of security are minimized Third-party system integration — Bi- in many ways. One way is to literally alive and active in the system. By addometric manufacturers offer a variety limit the windows of opportunity for ing a biometric to the access control of different methods to integrate bio- infringement. For instance, if the datasystem, a badge alone cannot be used metrics into conventional access con- base of those authorized for access to to gain access. trol systems. The most common way is a facility is not reliant on networking For example, a single smart card can card reader emulation. This method is hardware systems, the chance for some- store both the user’s ID number and bivery effective when integrating into ex- one to infiltrate the system is reduced as ometric template. Because of this, isting card-based systems to bring exthere is no need to distribute hand temare the possibilities of downtime. One tra security to the front entrance, serv- cannot hack what’s not there. What’s not plates across a network of readers or er room or other critical openings. The there cannot break down. require the access control system to door alarms. There are a variety of ways biometrics accomplish this task:

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EASY-TO-USE BIOMETRICS

manage biometric templates. This means integration to any existing access control application is greatly simplified, eliminating extra network infrastructure costs. Because the template only resides on the card, the solution also eases individual privacy concerns. In most applications involving smart cards and embedded biometrics, hand geometry is preferred since

a hand template uses up only 9 bytes versus an average of 300 bytes required by finger-scan readers per finger. Offering the best of smart cards and biometrics, the solution provides dual authentication by requesting both the right card and the right person. A smart card reader is embedded into the biometric reader. A plastic cardholder is af-

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fixed to the side of the unit. The verification process takes approximately one second and is virtually foolproof. This ensures that response times are fast and that the smart card can maximize its benefits by offering users increased room for other applications. In addition, the implementation supports multiple secure applications on the smart cards. Possible applications include the storage of additional information to allow for secure log on to a PC or laptop and accessing the company’s network.

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You won’t be alone in proposing biometrics. Upon learning how easy the technology is to implement, sales are growing like a hockey stick graph. In its “North American Government Biometrics Markets” report, research firm Frost & Sullivan stated that biometrics sales are estimated to reach $9.5 billion by 2014. Just about every major national government uses them as do nuclear power plants and other high security locations. Large data centers run by companies such as Equinix, Level 3, Qwest Communications, XO Communications, Microsoft, Yahoo, Google, IBM, Bell South, Siemens and others have used biometric hand readers from suppliers such as Schlage at the entrance, on the security corridor and on the individual customer areas. The readers are utilized at facilities of varying size and traffic flow, including college recreation centers, large and small companies, plus tennis clubs, gymnasiums and other work out centers. After all, if the goal of an access control system is to control where people, not credentials, can and cannot go, then only a biometric device truly provides this capability to the end user. That’s why more and more installing security contractors are proposing biometrics as part of an overall security plan. ■ Jennifer Toscano is Portfolio Marketing Manager, Credentials, Readers, Software and Controls for Ingersoll Rand Security Technologies. She can be contacted at jennifer_toscano@irco.com.

FIND IT ON THE WEB F The online version of this story includes the T sidebar, “Breakthrough Improves Fingerprint si Biometrics Reliability.” You can view the story at www.securitysales.com/biometrics0811.

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The Essentials Bosch EX65 Extreme Series Camera

Bosch Security Systems of Fairport, N.Y., introduces the Extreme Series EX65 camera. Featuring Bosch’s Dinion 2X day/night technology, the camera provides 20-bit image processing and an extended dynamic range. The product also features smart backlight compensation (BLC) to optimize light levels for objects of interest in areas with a bright background. Designed for extreme environment operation, the EX65 can withstand temperatures from -58° F to 140° F with a heater that activates at low temperatures to resist ice build-up and a sunshield in the hottest desert settings, according to the company.

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Mobotix D14 DualDome Camera

Mobotix of NYC presents the D14 DualDome camera, a weatherproof and shock-resistant 6.2-megapixel surveillance camera. The D14 provides a digital pan/tilt/zoom (p/t/z) and has no mechanical moving parts. Equipped with a 90° wide angle and telephoto lenses, the camera can monitor an entire scene and, at the same time, the telephoto lens can record portrait photos in front of a particular area, such as an entrance, according to the company. Featuring a digital sensor switching function, the camera can also be used as a day/night camera.

Channel Vision Plasma-Proof Infrared Receiver Kit

Channel Vision of Costa Mesa, Calif., releases IR-5010, a plasma-proof infrared (IR) kit. The kit allows users to control security DVRs or A/V equipment located in a secured lock box, closed cabinet or separate room up to 1,000 feet away. The product comes equipped with an IR receiver, IR hub, four flashers and a 12V power supply. Its status LEDs provide power and IR signal indication for easy troubleshooting, according to the company. Plasma and fluorescent-proof, it is able to maintain signal integrity when placed near compact fluorescent lamps, plasma and LCD TVs, or in direct sunlight. www.securitysales.com/FREEInfo/18402

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GarrettCom Magnum 12KX Gigabit Managed Switch

GarrettCom Inc. of Fremont, Calif., introduces the Magnum 12KX gigabit managed switch. It provides 16 combo ports with built-in small-form-factor pluggable (SFP) ports, allowing a choice of fixed 10/100/1,000 BASE-TX connectivity or fiber SFPs, according to the company. The product features a nonblocking switching fabric to provide wire-speed performance on all ports, has an option to configure four ports for power over Ethernet (PoE).The 12KX switch can be synchronized via SNTP or IEEE 1588 v2 precision timing. www.securitysales.com/FREEInfo/18403

Comtrol Theft Deterrent Solution

Comtrol of New Brighton, Minn., releases the theft deterrent solution (TDS), which enables automated access control with no physical barriers for asset protection in retail environments. The system will automatically arm itself with an eye-safe infrared (IR) curtain when a protected area is left unattended. The solution, which connects to an alarm panel, will immediately generate an alert signal once that field is breached by an unauthorized person or object. www.securitysales.com/FREEInfo/18404

GVI Security NID-2151 2MP Camera

The NID-2151 varifocal indoor dome camera by GVI Security of Carrollton, Texas, provides full high-definition (HD) video surveillance, according to the company. Featuring a 1/2.5-inch CMOS progressive scan image sensor, the camera uses H.264 technology to retain high video quality at a low data rate. Offering power over Ethernet (PoE) to reduce installation time and costs, the NID-2151 is compatible with the company’s autoIP open platform video management software (VMS) for quick plug-and-play installation. www.securitysales.com/FREEInfo/18405

For the latest products, sign up for SSI’s Security Equipment E-lert at securitysales.com.

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industry-leading MAXPRO VMS integrated with the Pro-Watch security management system provides a layer of coverage that helped Norton Healthcare transition to IP with confidence and ease. Ready Electric has the peace of mind that comes from knowing they’ve got Honeywell security at work for them. “We chose Honeywell’s IP solutions because they’re a trusted technology leader, with strong customer support and service.” Ready Electric and Norton Healthcare choose IP – won’t you?

Pictured: Dan Kloenne, Security Sales Manager, Ready Electric, Louisville, KY. To learn more about Honeywell’s end-to-end IP solutions, including cameras, recording devices and video management systems, download your FREE copy of our IP Selection Guide at www.honeywellipsolutions.com or call 1-800-796-2288 for more information. Get more info!

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AES Corporation ...................................................................37 Affiliated Central, Inc. .......................................................... C2 All American Monitoring ......................................................25 Altronix ..................................................................................26 Arecont Vision .......................................................................21 Axis Communications...........................................................12 Basler Vision Technologies ...................................................65 Bolide Technology Group .......................................................7 CNB Technology, Inc. ...........................................................71 ComNet................................................................................. 70 DSX Access Systems, Inc......................................................11 EasyLobby, Inc. .....................................................................67 EMERgency24 ..................................................................... C3 HES Innovations...................................................................53 HID Global ............................................................................47 HIKVISION ...........................................................................15 Honeywell Security .............................................................. C4 Honeywell Systems Group ...................................................73 Iluminar, Inc............................................................................6 Kirshenbaum & Kirshenbaum, PC ........................................6 Lenel Systems .......................................................................61 Middle Atlantic Products ......................................................59 Minuteman Power Technologies .........................................77 National Monitoring Center (NMC) ....................................17 NVT ..........................................................................................3 Optex America, Inc. ..............................................................57 Panasonic System Solutions Company ...............................19 Pelco ...............................................................................A8(34) PROTECH .............................................................................51 Schlage ..................................................................... Bellyband Schlage ..................................................................................62 Schlage ..................................................................................63 Speco Technologies.................................................................1 Speco Technologies................................................CoverSnipe SSI..........................................................................................26 SSI - eControl Panel ..............................................................35 STI - Safety Technology Int’l., Inc. .......................................74 System Sensor .......................................................................49 Tyco Security Products (DSC) ................................................5 Tyco Security Products (Kantech) .......................................39 Tyco Security Products (Kantech) .......................................41 Tyco Security Products (Kantech) .......................................43 Tyco Security Products (Kantech) .......................................45 Visonic, Inc. ...........................................................................44 Winsted ..................................................................................69

18199 18272 18204 18245 18276 18308 18283 18193 18321 18303 18231 18185 18136 18215 18234 18233 18103 18143 18236 18253 18227 18319 18278 18314 18184 18219 — 18167 18223 18153 18117 18187 18142 — — — 18188 18209 18120 18180 18170 18158 18123 18216 18135

Company listings are provided as a courtesy — publisher assumes no responsibility for errors or omissions.

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Building Your Business

ASIS 2011 Gets Serious About Integrator Education The upcoming conference in Orlando will offer systems integrators specially designed educational offerings focused on security trends, challenges and requirements within distinct vertical markets.

By Ray O’Hara

hen ASIS Int’l opens its 57th Annual Seminar and Exhibits on Sept. 19 at the Orange County Convention Center in Orlando, Fla., a new education track tailored for systems integrators will make its debut. Endorsed by PSA Security Network, the track features nine end-user facilitated sessions during three days. The set of courses offer a unique opportunity for systems integrators to strengthen their knowledge of their customers’ service needs and technical requirements, says Steve Surfaro, strategic channel manager at Axis Communications and the lead developer of the new programs. “Systems integrators will walk away from these sessions better equipped to address these markets, provide meaningful solutions, and reinforce their value to current and potential clients,” he says. Key vertical markets being explored in the series include: corporate campus; K-12; university; health care; transportation and ports; retail; critical infrastructure (energy, water, gas); and pharmaceutical campuses and plants. Within each session, an emphasis will be placed on exploring and identifying top challenges and strategies for success in these unique market niches.

Educational Track Overview The systems integrator track kicks off Sept. 19 with “Collaborative/Consultative Selling,” hosted by Frank DeFina, senior vice president of sales and marketing for Samsung North America, and Bill Bozeman, president, PSA Security Network. With the goal for the integrator and the end user being to develop a mutually successful partnership, DeFina and Bozeman will offer collaborative and consultative techniques to inspire integrators to be both innovative and proactive in their approach to business. Following are brief descriptions for the session tracks along with participating panelists and subject matter experts. Corporate campus — A second session on opening day will explore the challenges faced by corporate campus security practitioners. The panel will feature Amazon’s Ed Bacco, senior manager of worldwide physical security, and Robert Arnston, program manager for physical security systems and design; SeaWorld Security Manager Terry Jordan; and Nicole McDargh, CPP, vice president of special markets, Securitas. Topics such as mitigating risk for sur-

rounding crime, remote entry processes, and intellectual property theft will be addressed by this group of experts. K-12 and university — What are security practitioners facing in the education markets? Orange County Public Schools’ Mike Ganio, director of school safety programs, and Conan Bickford, a security/safety manager, share insights into their typical days on campus. From student violence, including bullying and fighting, to pornography on campus, integrators attending this session will walk away with new threat assessment tools and fresh insights into mobile monitoring and event response considerations. Raymond Thrower, director of campus safety at Gustavus University, and William Badertscher, senior engineer, facilities and safety control systems at Georgetown University, provide the end-user perspective of a university setting’s security needs and how an integrator can best address them during a follow-on session Sept. 20. Health care — Integrators seeking to establish or grow their footprint in

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Ports — For Port of New York/New Jersey’s Jose Gomez and Port of Miami’s Hector Pesquera, terrorism remains their top concern. In “Transportation and Port Security Solutions,” Gomez and Pesquera will examine best practices in surveillance for multiple agencies, including traffic monitoring, and study entry screening. Integrators will gain critical insights into the protection of borders and crossing, as well as perimeter security and the maintenance of sterile areas. Retail — One of the nation’s largest retailers will provide key tools and information to enable integrators to be part of a “unified solution.” Dale White, a security services specialist with Walmart, will examine crime prevention services and public view monitors in his session, “Technology Solutions for Loss Prevention, Retail Security, and Fighting Organized Retail Crime.” Integrators will learn how retailers are using video analytics and content analysis to mitigate risk to their stores. Pharmaceutical campus/plant — The protection of intellectual property is one subject on the agenda for Dan Arenovski, Purdue Pharma, and Anthony Patillo, Sanofi-Aventis, in their session on providing solutions to these unique settings. Much like their health-care counterparts, these security practitioners face a very unique set of security challenges. They’ll reveal the technologies and services needed most by end users within their vertical market, and how each can be leveraged for effectiveness and efficiency in their fight to prevent substance theft and abuse.

this market will learn how to achieve their business objectives from leading health-care practitioners Mike Cummings, CPP, Aurora Healthcare, and Bonnie Michelman, CPP, Massachusetts General Hospital, in “Healthcare Security: Compliance, Protection, and Diversity.” While the health-care vertical shares some challenges with other industries addressed in the systems integrator track, it retains a unique set of requirements unto itself.

Security specialists from Gustavus University and Georgetown University will discuss how integrators can best address security needs specific to campus settings during the systems integrator track at ASIS 2011.

Other Conference Highlights Outside of the classrooms, ASIS 2011 also offers systems integrators a robust showcase of the latest security products and services. The challenge for many will be in navigating the more than 700 displays across more than 230,000 square feet of exhibit space to find the best solutions. ASIS offers tools for attendees to use to make the most effective and efficient investment of time while in Orlando. The first is the online planner. Attendees can review session and exhibitor information and request appointments with manufacturers or service providers ahead of arrival. Secondly, attendees are encouraged to download the ASIS 2011 mobile application. This will put the very latest information on education sessions, show specials, and the exhibit floor right in the palm of their hand while attending the conference. Installing security contractors will find information on some of the newest and most innovative technologies and service offerings featured in the ASIS Accolades competition, which identifies “Security’s Best” prior to the opening of the seminar. The competition, launched in 2009, is open to all ASIS exhibitors and recognizes new products and services that demonstrate advancements in technology or that extend a new level of service. Product information will be available online to view before and after the show. Onsite, attendees can pick up a detailed directory of all entrants and visit the Accolades Showcase in the exhibit hall.

One of the most popular sessions at the seminar each year is “What’s New on the Floor?” Offered during the afternoon on opening day, this session explores some of the new, innovative physical and information security products that can be found on the show floor. Security industry veterans Ronald Lander, CPP, and Howard Belfor, CPP, SST, lead this informative session. “Internet protocol [IP] accessible appliances will be the focus on the show floor this year,” Belfor says. “Devices doing security-related jobs, whether surveillance, detection or some other reporting activity, will be accessible by the interested client via a network connection. In many instances these products will be woven into remote management software options, allowing users to outsource the management and use of the security devices.” ASIS 2011 will also host several networking events where professionals from all vertical industries and government sectors, from Fortune 100 companies to the Department of Homeland Security (DHS), can connect. The week opens with the ASIS Foundation Golf Tournament, Young Professionals Reception and a welcome reception on Sept. 18. First-time seminar attendees and new members are also invited to attend a special reception on Sept. 18 from 6-7 p.m. The President’s Reception will be held at Universal’s Islands of Adventure on Sept. 19. The entire theme park has been reserved for this event and attendees will have unlimited access to rides and attractions. On Sept. 21, the ASIS Foundation Event at B.B. King’s Blues Club offers guests an opportunity to indulge in some great Southern comfort food and energetic music as ASIS 2011 winds to a close. For complete details on the systems integrator’s track and other education and networking offerings, visit asis2011.org. ■ Ray O’Hara is president of the ASIS Int’l Board of Directors. He also serves as executive vice president, International Services and Consulting and Investigations, Andrews Int’l. He can be contacted at ray.oharapresident@asisonline.org.

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The Big Idea

Successful Partners, in Marriage and Work IDEA of the Month If you had just one really great idea you could share with the alarm industry, what would it be? This month’s great idea comes from Beverly Davis, my wife and working partner.

Davis’ great idea: All couples who work together should separate their responsibilities and not crossover into each other’s primary area of responsibility.

always equate time and the use of time to the phrase, “In the blink of an eye.” No matter how much time it takes to complete an event in your life — i.e., the years you have been married, a long sought-after vacation, the education of your children — when looked back upon, all seemed to have whizzed by in a flash. This was brought to mind recently as my wife, Beverly, and I celebrated our 50th anniversary. We reminisced about the usual things; events in our lives, children, grandchildren and so forth. However, what stood out in my mind was the fact that for most of those five decades Beverly and I have worked together, building one business after another. We still do work together; if you call my office today, more than likely you’ll speak with Beverly. Thus, for this month’s column I asked Beverly if she had just one really great idea about spouses working together. Of course, she did, and more. Expounding on her imminent wisdom highlighted above, Beverly emphasized the need to always be there

for each other when decisions need to be made. And finally, she advised, “Always respect each other.” I’ve heard it said that half of all marriages nowadays end in divorce or separation. In particular, when the marriage of working partners begins to fail, the trauma from it all can be exacerbated. Not only are the couple’s family and friends adversely affected, but employees of the company as well. Here is where advanced planning is absolutely essential to the continuance of the business. There are important questions that each couple should ask of their spouse when planning for the future:

• Is either spouse the dominant par-

ticipant in the business and can the business survive without their contribution?

• In the event of a divorce or spou-

sal death, can the other manage the business effectively? If not, who then is responsible for day-to-day management?

By Ron Davis rdavis@graybeardsrus.com

• Is each spouse having fun and en-

joying their lives, both business-related and personal?

In my case, I’ve been fortunate to be married to a lady who is not only my best friend, but the best business associate I could have. I cannot tell you how many times I might have taken wrong turns or made bad decisions in my business career, only to be gently steered in the right direction by Beverly. It takes a lot of work; plus, dedication above and beyond that which is needed in a stable marriage. No matter how long you are at it, the time seems to go by in the blink of an eye. I’d like to pose an idea that hasn’t been addressed by our industry; it just may be worthy of consideration by some of the national and regional associations. Why not form a subgroup of working couples to discuss the opportunities and methods of combining a successful business relationship and marriage? Think about all of the businesses that are around today where both parties in a marriage are working, and working effectively. A byproduct of this group might generate a lot of good managerial ideas to pass on to the rest of the industry. Lastly, thanks to you, Beverly, not just for your great idea, but also for the 50 great years we have worked together. ■ Ron Davis is a SSI Hall of Fame inductee and President of Davis Mergers and Acquisitions Group Inc. Also known as The Graybeards, the company is active in acquisitions and mergers exclusively in the alarm business.

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Several Things to Know About the 3-Day Cancellation Notice

By Ken Kirschenbaum ken@kirschenbaumesq.com

site at www.kirschenbaumesq.com/ oo often ignored by alarm If you are in a jurisdiction that pernoticeofcancel.htm.) dealers, the three-day notice mits a waiver, it typically requires: 1) When is the law applicable to you of cancellation provision is the waiver be in writing; 2) it be handas an alarm dealer? If you think of required in every state. Even written by the subscriber; 3) it is on the law as it is sometimes referred to if a state hasn’t enacted its own threea paper separate from the contract — the “door-to-door sales act” — you day notice of cancellation statute form; and 4) states that the subscriber can get a good idea when it applies. there is a federal law that applies. Failneeds you to install your system right It might be easier to explain when it ure to comply with this ubiquitous leaway and waives the three-day cooling doesn’t apply. The law does not apply gal requirement is all too common in off period. Not all jurisdictions require to commercial transactions, only for not only the alarm industry, but other all of this, but by adopting this pracresidential subscribers. businesses as well. tice, you should be in compliance in Additionally, the law applies only Noncompliance is often intentionthose states that permit the waiver. when at least part of the transacal, but also out of ignorance of the leWhat happens if you don’t comply gal requirement. Some alarm with the law? For one thing, owners think the law is too difthe subscriber can cancel Rule of thumb: If you’ve been to at any time and require you ficult to follow or don’t boththe residence before the contract to return their home to its er using written contracts that is signed, for a sales pitch or survey condition before you startcomply with the strict requireof the premises, then give the ed your work. But of even ments of the law or think givcancellation notice. more concern, the consuming subscribers the cooling off period will result in too many er agencies in your state (e.g. tion takes place at the residence. So lost sales. Though persistent and intenConsumer Affairs, attorney general or if you have a business office or retail tional disregard for the law may have the agency that licenses your business) store and the transaction takes place additional consequence, the failure to could take action against you for dethere entirely, no cancellation notice comply in almost all cases leaves the ceptive trade practices. This could enis needed. If any part of the transacsubscriber with the right to cancel at tail requiring you to give notice to all tion takes place at the residence, then any time until the law is complied with, existing subscribers that they can canthe notice is required. Rule of thumb: even after the installation is completed. cel with you and get refunds, along If you’ve been to the residence before What exactly is the law? You are rewith fines and penalties. the contract is signed, for a sales pitch quired to have a notice in your conWhat’s the bottom line? Comply with or survey of the premises, then give tract that lets the subscriber know the law. One other thought. When you the cancellation notice. they can cancel the contract without go to sell your subscriber accounts, you Can the subscriber waive the cancelpenalty and get a complete refund, may find that your potential buyer will lation right? The law is sometimes reprovided they cancel within three lose interest if you have, as a matter of ferred to as the “three-day cooling off days (72 hours) of the contract exepolicy, failed to comply with the law. ■ period” because it affords the subscribcution. In addition to this notice, you er three days to recover from the sharp, are required to provide the subscriber Ken Kirschenbaum has been a recognized counsel persuasive, hard-sell convincing tactics a cancellation form, which is to have to the alarm industry for 35 years and is principal of Kirschenbaum & Kirschenbaum, P.C. (www.kirschenof your salesman. Under those circumyour address, the date of the contract baumesq.com). His team of attorneys, which includes daughter Jennifer, specialize in transactional, defense stances, it’s odd that the law would perand when the subscriber must act to litigation, regulatory compliance and collection matters. mit a waiver. In fact only some jurisdiccancel. (For the form required in your The opinions expressed in this column are not necestions permit waiver, others none. state, you can go to our firm’s Web sarily those of SSI, and not intended as legal advice.

SECURITY SALES & INTEGRATION (ISSN 1539-0071) (USPS 511-590) (CDN IPM# 40013413) is published monthly with an additional issue in December, by Bobit Business Media, 3520 Challenger Street, Torrance, California 90503-1640. Periodicals postage paid at Torrance, California 90503-9998 and additional mailing offices. POSTMASTER: Send address changes to Security Sales, P.O. Box 1068 Skokie, IL 60076-8068. Please allow 4 to 6 weeks for address changes to take effect. Subscription Prices - United States $96 per year; Canada $96 per year; Foreign $140 per year. Single copy price - $8; Fact Book - $35. Please allow 4 to 6 weeks to receive your first issue. Please address Editorial and Advertising correspondence to the Executive Offices at 3520 Challenger Street, Torrance, California 90503-1640. The contents of this publication may not be reproduced either in whole or in part without consent of Bobit Business Media. All statements made, although based on information believed to be reliable and accurate, cannot be guaranteed and no fault or liability can be accepted for error or omission.

Legal Briefing

84 securitysales.com • AUGUST 2011

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