Integrator Initiates Siemens-Worthy Strategy

Siemens is not a flamboyant company; we quietly do what we need to do to bring sophisticated, integrated solutions to our customers without beating the drums too much.”

These words are as true as any spoken by Alan Calegari, senior vice president and division head of the Security Systems division of Siemens Building Technologies Inc. (SBT), during a rare, exclusive interview with Security Sales and Integration.

SBT — an operating company within the Automation and Control division of Munich, Germany-based Siemens, whose roots go all the way back to the 19th century — believes in letting its work speak for itself. Established in 1998, SBT solidified its position as one of America’s leading integration solutions providers with the 2001 acquisition of Security Technology Group.

Today, SBT does $1.5 billion worth of business annually within the U.S., employs 7,000 people and has more than 100 installation/service branches nationwide. Although SBT is owned and operated by a global conglomerate primarily associated with manufacturing, it identifies itself as a systems integrator and focuses on that side of the business.

SBT offers a broad range of product and service solutions, with segments dedicated to the Building Automation, Fire Safety, Security Systems and HVAC markets. The Security Systems business delivers access control, CCTV, intrusion detection and other systems primarily to the Fortune 500 corporate, governmental and education markets.

Calegari, who was recently assigned to SBT U.S. after spending three years streamlining Canadian operations, is committed to using his more than 30 years of military and multinational corporate experience to whip the company into the nation’s No. 1 systems integrator. He explains SBT’s business model, how the company differentiates itself, what other integrators can learn from SBT, and the industry trends and opportunities he sees moving forward.

Company Looks to Unify Efforts, Concentrate on Government Jobs
How is Siemens set up and where does SBT fits in?
Calegari:
In the United States, as opposed to Siemens’ other territories throughout the world, each operating company still maintains an independent legal entity.

However, each one really runs in alignment with strategy similar to the global philosophy. Overall, the spirit is to capitalize on Siemens’ brand name and the broad spectrum that each of the operating companies brings to the market.

SBT is an example of Siemens’ operating companies. The challenge now is restructuring U.S. security and coordinating it more globally. From a global standpoint, SBT has gone through a major change from being a rather divided organization, consisting of branches and regions, and been unified into one organization with a critical mass presence. We are still fine-tuning, but are well on our way.

How is SBT U.S. structured?
Calegari:
Within SBT, there are four divisions: Building Automation, Fire, Security Systems and HVAC. In security, our charter is that we are not a product or manufacturing company, we are an integrator. Our portfolio consists of Siemens or third-party products, depending on needs, functions, etc.

Our broad portfolio of services and products is very appealing in certain applications and drives the customer to accept an organization that can deliver so much underneath one umbrella. Olympic Village in Athens [site of the 2004 Summer Games] is an example of a project in which we engineered and implemented all the security needs. We were not quite ready for Salt Lake City [site of the 2002 Winter Games] with that formula, but were very ready for Athens.

I believe we have mastered the packaging and formula to demonstrate the skill sets necessary to meet the needs of municipalities and government and are able to fulfill all their security and infrastructure needs.

SBT Strives to Deliver Local-Level Service on Nationwide Scale
What advantages do you gain as an end-to-end provider and being part of a huge conglomerate?
Calegari:
We have chosen how we are structured and it was not by accident. We have developed strategies and created an organization supportive of this. First and foremost, we must be innovative, ethical and support customer goals; these are the three Siemens directives.

We are big, but we have branches in Kentucky, for example, with regular people like any other local business. We can compete locally as we can globally. As we move across the globe, we move across neighborhoods with the same level of commitment and quality. We have a very aggressive customer satisfaction program and use an external group that conducts direct interviews with customers after service, installation, etc.

All SBT divisions bring together customers for focus groups to ascertain what requirements and needs are for products/solutions. We are doing that a lot now for the federal customers.

Product Brand Mix Stretches Far Beyond Siemens’ House Lines
Can you please provide a summary of SBT’s products and services?
Calegari:
Building Automation is the biggest component of SBT, which includes environmental controls as well as energy savings programs that are environmentally friendly. Our Apogee system is the backbone of the building automation business, and also interfaces with our fire and security systems.

We stay away from the terms ‘bundled’ or ‘integrated,’ as they have been overused. Instead, we discuss what is needed with the customer and provide the solutions through customized systems.

Our history in fire goes back to the early days in Switzerland where the company pioneered the first smoke detector. We continue to be on the leading edge of fire detection and suppression. Systems such as FireFinder now have voice control and firefighters can interact with our panels. Our security offerings include a large number of products, mostly in the areas of access control, such as our C-Pass system, and video.

Do you use other manufacturers’ products as well?
Calegari: Beyond what we manufacture within Siemens, we believe it is our duty to understand in detail other suppliers’ products that can fulfill needs, and we are not shy about using them as strategic vendors or partners. The true spirit of an integrator should be unbiased in terms of product and have a strong technology understanding.

We have some products that we upgrade and brand as Siemens, our own SBT products or Siemens-manufactured products. The stress the security market has received recently has forced others to focus more on the manufacturing side and forced them away from field operations. This makes a company like us appealing to install their products in the field.

Our technicians are trained and extremely knowledgeable about third-party vendor products, which comprise probably about 40 percent of our portfolio. We tend to achieve the highest level of certifications from those vendors. This way, we can install, troubleshoot, upgrade, etc.

Targeted Markets Include Healthcare, Education, Water
Which market sectors are you keying on? What are your strategies?Calegari: I see us evolving into a more sophisticated effort with bio-containment; energy management, as well as sites that produce energy; healthcare, capit
alizing on Siemens Medical — one example of migrating over and molding existing internal strength to other areas; water management, with creation of supplies and distribution by capitalizing on our U.S. Filter acquisition as well as securing those water supplies. These markets will be extremely strong moving forward.

Others that are equally important but we are not as aggressively pursuing are universities, K-12 and airports, where Siemens Maintenance Services business works strategically by bringing core competencies to the fore.

We have a very sophisticated training system with an education center in Buffalo Grove [Ill.] that keeps our sales and technical people up to speed in these markets. Our sales force is extremely focused and understands the types of market requirements and teams that support the verticals.

What are your major marketing initiatives?

Calegari: We prefer to be engaged in industry-related activities. We also heavily support education initiatives that bring attention to the Siemens name. This part of what we do, helping young people, is really fulfilling.

Integrator Looks to Youth, Outside Industry for Fresh New Talent

What are the qualifications to become a SBT systems integrator or subcontractor?

Calegari: All our integrators, installers and other technical people are employees. For minor support roles, we use subcontractors. We go through a very selective process to find individuals with technical backgrounds in IT, engineering, etc., who must then go through various apprenticeships and come from competitors or allied fields.

In the past three years, I have seen a migration of recruitment from traditional general technology people that rotate among competitors to more of a homegrown, college-educated model. We really train the college-educated guys and put them into teaming/mentoring programs with senior staff, and expose them to various training and certification programs. We put them through third-party vendor specialized training.

We have a program of education recognition in which we partner with high schools and promote basic understanding of our industry and encourage them to pursue careers in our businesses. We also support them through scholarships or other programs.

This helps bring in a level of freshness you do not get from the retreads of the industry, not that there is anything wrong with that. We need an injection of new blood for the future.

In addition, there are always opportunities for qualified organizations to work with SBT on a subcontracting basis and sometimes we do have other independents represent us in areas we do not have branch offices. We are not an isolated fortress; we want to say that loud and clear.

What can other integration companies learn from SBT?

Calegari: You can learn from everyone and they from you. We have a very honest, transparent business model. Anyone would benefit if it were applied to their operation. I welcome anyone to engage in the same ethics.

Security Industry Is in Midst of Paradigm Shift From Physical to IT

What have been the most significant changes in the industry the past five years?

Calegari: The industry has come to be defined differently as security used to be physical whereas now we are moving into IT. We have now entered a completely different paradigm of thinking. The convergence is changing the nature of the industry and scaling the number of companies that can be called security companies.

Also, after 9/11, we have to look at security in a whole new way of changing codes, standards and applications that have moved rapidly with technological advancement. The past five years and equally the next five years will redefine what the security industry is all about.

What will be the most significant changes in the industry during those next five years?

Calegari: The government is going to continue to employ very sophisticated levels of monitoring and control, which will migrate into the private sector. In the next decade, a downtown building might have the same screening as airports, only it will be in a much more sophisticated application, such as intelligent video, biometrics, GPS, RFID, sniffers, etc.

In the past, security was viewed as a way to protect assets; today, it is protecting the economic value of a company by maintaining its viable economic functioning.

What are the three greatest challenges the industry faces today?

Calegari: First, the industry must deal with redefining itself, with two extremes today being guards and IT. There needs to be a clear path and identity.

Second, the past was reactive and that approach is at the forefront of many initiatives today. So the challenge is that industry leaders must use a different paradigm of thinking that promotes solutions. You cannot just push products, but instead must understand the level of threat and base those products on solutions that address that threat.

Third, you have to make a choice to be either an integrator or a product company. Being a little bit of both is difficult and what you need might not be in your portfolio. Companies need to divest their selfish approach of only pushing their own products.

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About the Author

Contact:

Scott Goldfine is the marketing director for Elite Interactive Solutions. He is the former editor-in-chief and associate publisher of Security Sales & Integration. He can be reached at [email protected].

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