Interface bundles services for 9,500 Dollar General retail stores

Deal saves millions on phone service alone for end user
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Thursday, August 25, 2011

ST. LOUIS—Interface Security Systems is in the process of completing the installation of a secure managed cloud services project for the entire Dollar General 9,500-store retail chain. While terms of the deal were not released, Interface CEO Michael Shaw told Security Systems News that the Dollar General multi-year contract is “expected to generate in excess of $100 million in top-line revenue for Interface.”

Interface is providing the WAN management, PCI compliance, wireless access management, IP alarm system monitoring, IP video surveillance, and Interface digital voice. This suite of secure cloud-based applications and management is delivered via Interface Secure Managed Broadband, a wide-area network design featuring redundant, high-speed network connections for failover and business continuity.

Officials from Dollar General declined to be interviewed for the story. Dollar General is a publicly-traded company with 2010 revenues of about $12 billion; the company employs more than 86,000.

“They are in 40-something states and are growing at a remarkable pace, adding about 600 new stores every year,” Shaw said.

With this project, Dollar General was looking to do three things, Shaw said.

First, it wanted to standardize and improve overall store operations with a faster, more reliable WAN, to better deal with POS reporting and PCI compliance. Second, a new loss prevention director wanted to upgrade the stores’ security systems from old analog digital dialer panels to IP panels with GSM backup. The LP director also wanted to be able to access video from the stores remotely.

And third, the company wanted to eliminate the POTS lines in the stores and go to VOIP phone service.

Vying for different portions of the job were major networking, telco and security providers. While some network and security providers proposed working together on the project, Interface was the only one that was able to take on all of the elements of the job, from the networking, security and telephony—and components of those systems, including the Cisco routers on the premises, the Honeywell IP security panels, PCI compliance, and video surveillance, according to Robert Aranda, Interface IP Services president.

“The design of the system is our secret sauce,” Aranda said. With different providers managing security, telephony and network and loss preventions system for an enterprise this large there would likely be “a collision on [the network on] a regular basis,” Aranda said.

“From a physical, IT and logical perspective, we manage all of it,” he said. “I don’t know of another provider that’s willing to take this level of responsibility.” Aranda said this is the “source of our growth.” Indeed, Interface executives reported that the company doubled its RMR from 2007-2011 and grew at 15 percent CAGR between 2008 and 2010.

Aranda said the company’s security expertise helped clinch the deal because Interface was the only provider who addressed the difficulties of VOIP telephone service not working with digital dialer panels upfront.

Changing to VOIP service will save Dollar General millions of dollars, Shaw said. “They had 450 different telephone providers ... they had a whole staff of people just to manage the phone bills,” he said. “We send one bill—for all services.”

Interface was awarded the contract in June of 2010 and the installation will be complete by the middle of October. Shaw said the project management team, led by Michael McCleod, completed “800 to 900 stores per month to keep up with the schedule.”

JoAnna Sohovich, president of Honeywell Security and Communications, said that Honeywell met with Dollar General to talk about supplying the 9,500 Vista 21 IP panels with built-in GSM radios necessary for the job. “Part of the stipulation was that they [Dollar General] wanted to make sure that Interface had a phenomenal relationship and was backed by its manufacturer,” she said.

And while 9,500 panels clearly exceeds an average order, the Honeywell factory was able to produces all of the panels on time. Sohovich, a former plant manager herself, said that if demand for a product can be forecasted, the factory can respond. “Delivery has never been a question with our customers,” she said. “The factory personnel would consider it a personal affront if they didn’t achieve 100 percent score [for on time delivery] every month."

Interface worked with Vertek, a Vermont-based on-demand telco engineering company for the provisioning and management of the delivery of broadband. It worked with Endeavor, a private-label field service fulfillment and logistics company, which “stepped up their organization to support field organization requirements [for the project].”