Industry Outlook

Apr 1, 1997 12:00 PM, By TINA D'AVERSA-WILLIAMS

What is systems integration? Is it necessary? How will true integration be accomplished? Ask these questions to security professionals and you get a different answer from each one.

What we can agree on is that true systems integration links several technologies into a single, open system, using a common database where all functions are controlled from a single monitoring station.

The integration of high-tech security hardware and software systems, as well as other communications and software systems, human resources, and facility control systems, strengthens security companies while reducing costs. There is no question that the future of commercial security systems worldwide lies in systems integration; the benefits are too obvious for the evolution of systems development to go in any other direction.

Some integrated systems companies are offering comprehensive system services including hardware, software, installation, consulting, and systems design and engineering services. These companies have added engineering, computer hardware and software people, and systems integrators to their support staffs. Other companies that manufacture the hardware and software use independent integrators to provide the specification, design and consulting services.

One company providing a comprehensive security systems integration solution is Pinkerton. According to Denis Brown, president of Pinkerton, A key element in Pinkerton's strategy today and for the 21st century is to provide our clients with world-class, global, total security solutions. So Pinkerton, already well-known for uniformed security, investigations and consulting services, also offers security systems integration.

Ensuring that a security system's hardware and software elements consistently meet and exceed client expectations is the responsibility of Pinkerton's Systems Integration Division (SID). SID designs, installs and services the combination of components necessary to create a security system.

Criteria by which a systems integration firm is judged include: * the integrator's capabilities; * the speed and quality of maintenance service; * remote monitoring capabilities; and * price.

SID's strategy is to remain an independent systems integrator representing multiple system lines throughout the country.

* Systems integration capabilities. SID has some of the top systems designers and technicians in the industry and backs them up with the latest security technology, according to the company. Project teams have experience in implementing hardware and software security solutions in single offices and large industrial campuses with multiple facilities. If the client needs access control systems, closed-circuit television, intrusion alarms, electronic imaging or any combination, Pinkerton offers hardware and software in line with the client's corporate culture and budget.

* System maintenance. SID's nationwide network of technicians stays in touch via the Internet, sharing advice and information about security equipment. The division's Advanced Technology Center can answer questions and dispatch service technicians when necessary.

* Price. Pinkerton does not manufacture hardware and software but has developed a preferred buyers' network of equipment manufacturers, according to the company. Pinkerton uses this advantage to procure equipment at price points not available to general consumers.

* Remote monitoring. Pinkerton's computer and communications technology enables clients to outsource security system monitoring. Pinkerton's Advanced Technology Center, staffed 24 hours a day, provides clients remote access to their systems. Pinkerton can also remotely manage card access, video and alarms. In addition, SID's Service Management System provides clients with equipment inventories and service histories for hardware in their system.

Financial history Pinkerton's revenue for the fiscal year 1996 increased 5 percent to $906.2 million from $862.8 million for the prior year. Operating profit improved 14 percent to $23.8 million from $20.9 million for the prior year. Net income was up 19 percent to $12.5 million, or $1.46 per share, as compared with the prior year at $10.5 million, or $1.26 per share. Net income for O96 reflects the impact of $2 million in nonrecurring other income received as a result of an agreement pertaining to the acquisition of the company in 1988.

Net income also reflects a higher effective tax rate of 47 percent in 1996, an increase from 1995's effective tax rate of 41.7 percent. This increase is due to prior year savings from job-related tax credits and one-time tax-minimization strategies. Operating profit for the fourth quarter improved 7 percent to $8.8 million from $8.2 million in the fourth quarter of 1995. However, net income for the fourth quarter decreased 15 percent to $4.7 million from $5.5 million in the fourth quarter of 1995, because income taxes increased to $3.5 million from $1.7 million in the fourth quarter of 1995. Revenue increased 10 percent to $297.8 million from $271.1 million in the fourth quarter of 1995.

Pinkerton's acquisitions were designed to enlarge the Systems Integration Division. They were structured like mutually advantageous team building exercises, according to Dennis Raefield, SID president.

During 1995, the company acquired Omega Corporate Security (which would become the flagship integration company), J.L. Torbeck and API, in Los Angeles. In 1996, several security systems integration companies became a part of Pinkerton, including DAS Inc., Douglas Roesch Communications, ProNet Image and Audio, Delta Audio Visual and the security operations of Select Security Inc. in Canada. In January 1997, the company acquired Signacon Controls, New York, and WKD Security GmbH of Germany, which gives Pinkerton a global presence.

The Systems Integration Division, with $70 million in revenues, plans seven to 10 additional acquisitions in 1997, targeting the North Central, Rocky Mountain and Northeast regions, according to Raefield.

Pinkerton history Pinkerton Inc. made its initial public offering on the New York Stock Exchange April 4, 1990, under the trading symbol PKT. Pinkerton began trading on the New York Stock Exchange on June 26, 1996. Prior to that, Pinkerton was traded on the National Association of Securities Dealers Inc. stock exchange under the trading symbol PKTN.

Founded in 1850 by the original private eye, Allan Pinkerton, the company provides security services and technologies to address the asset-protection needs of its clients through 220 offices in the United States, Canada, Mexico, Europe and Asia.

In 1995 Pinkerton president Denis Brown acquired Omega Corporate Security to launch the Security Systems Integration Division (SID). Dennis Raefield, owner and president of Omega, became president of SID.

With headquarters in Encino, Pinkerton employs more than 45,000 and counts approximately half of the Fortune 1000 companies as its clients. The company is one of the world's largest suppliers of contract security and investigation services.

About the author The column is authored by Tina D'Aversa-Williams, publisher of Access Control and Security Systems Integration, whose background includes work in market research and analysis.

We want your feedback. Send comments to: Access Control and Security Systems Integration, Attn: Editorial Comments, 6151 Powers Ferry Road, Atlanta, GA 30339; or e-mail us at tdaversa@mindspring.com.

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