IST doubles service revenue

Family-owned systems integration business built over 13 years
 - 
Thursday, November 17, 2011

HONOLULU—At the suggestion of a new operations manager, Integrated Security Technologies decided to install a new customer service portal in 2010. As a result, the company doubled its service revenue in one year.

“It’s great. Customers love it,” explained Christine Lanning, president of IST, which is a member of PSA Security. “They can go online and enter their problem, and they’re notified about when a tech will show up, what actions were taken, and when we resolved the issue.”
 
IST service techs have their own laptops and they have a responsibility to “close out a ticket or put in a note on the ticket within 30 minutes,” she said. The new system helps ensure a two- to four-hour response time for IST customers. It also helps the service techs organize their time and provides valuable metrics for IST.

Lanning founded IST 13 years ago with her husband, Andrew Lanning, who is CEO of the company. In fact, the couple got their business license the same day they got married in May of 1998. Since that time, IST has grown from a two-person operation to more than 20 employees. This year, IST will reach about $6.5 million in revenues.

Christine and Andrew were both working for a local alarm company when they met, and they were both eager to do more than standard intrusion work. Andrew has a background in Navy weapons systems and tried to talk the alarm company owner into doing some systems integration work. The owner wasn’t interested, so Lanning decided to go out on his own.

“Systems integration in the mid- to late ’90s was a new segment of the security market,” Andrew said. “We could see the market demand, but there was no skill set here on the island among technicians.”

Success did not come immediately. “I didn’t know how hard it would be. My educational background is in anthropology and psychology. I had a credit card with a $20,000 limit and I thought that’s all it would take,” Andrew said. “I was broke in a week and I didn’t get my first contract until five or six months later.”

Christine studied business as an undergrad and has a master’s in information systems. Working together, the two landed IST’s first job: installing an outdoor verified video motion-sensing system for a DOT base yard where vehicles were stored. The base yard was getting broken into, so the Lannings installed a perimeter motion sensor system and tied it into the alarm and video so the central could video-verify what was going on at the base yard.

It was a cutting-edge system at the time, and a good first foray into systems integration for the Lannings. It was educational from a business standpoint as well. “I learned you don’t get paid [by the government] for 150 days,” Andrew said.

From there, they “played the meta tag game” and built a website. “It was cheesy—with lots of lightening bolts,” Andrew said, laughing.  They loaded it up with common search terms for physical security systems integration. IST’s next customer—Crunch Fitness, which was based in Manhattan—found them via the Web. This was not a common occurrence in 1998, Andrew noted. IST installed a fairly advanced video system for Crunch Fitness in eight locations in the continental United States.

In the next year, Andrew saw one of Lenel’s original owners, Rudy Prokupets, at ASIS and was impressed. “I thought, ‘This is what security ought to be: Software talking to hardware, non-proprietary.’”
 
IST got Microsoft-certified, which was required to become a Lenel VAR, and IST’s business took off from there. It acted as a subcontractor for Diebold on a “few hundred doors and cameras” at the Army Medical Center in Honolulu and that became a “showpiece project” for IST, which led to many more jobs. It now works with many manufacturers in addition to Lenel, notably Gallagher and AMAG.

Today, IST does a lot of government work. “DOD can definitely be half of our work some years,” Andrew said, noting the company just finished a subcontracting job for Jim Henry of Kratos Defense and Security Solutions. It’s also heavily into health care, the finance sector, critical infrastructure and county government, which in this state is huge. “The county government of Honolulu is on one big Lenel platform, including police, fire, environmental services, [and] civil defense,” he said.

The company also does some hospitality work. This is one vertical IST will work harder to penetrate in 2012. Other priorities for 2012 include increasing what it charges for labor. “We haven’t increased our labor costs since 2005, but we’re taking a hit on the bottom line with the rise in fuel costs. We’ve got to capture that back, so we’ve got to educate our customers about it,” Andrew said.

IST will also be doing more branding. “We’ve always been heavily associated with Lenel and OnGuard. We still are and we always will be, but we definitely represent other products and we want to make sure people know that.”

Finally, IST is preparing for its Technology Symposium, a two-day customer event in April where it brings in trusted vendors to give educational presentations. “We’ve done a room for 40, but we’ll do a room for 60 this year and likely divide it into one day for commercial customers and one day for military,” Andrew said.