State of Commercial Security 2022: Contending With COVID, Supply Issues & More

A classic trust exercise is turning your back to someone (hopefully that you know, and who is paying attention!) and allowing yourself to fall backwards for them to catch you before you fall. The concept is that it’s important to realize we don’t have to carry heavy burdens alone and everyone benefits through collaboration and looking out for one another. Extrapolating that to security integrators, sometimes the greatest success is achieved by working together for common goals — often realized through the support of organized dealer programs and networking among members.

This philosophy can really reap dividends during times of extreme hardship and duress, as we have all experienced courtesy of the pandemic the past two years — along with its integration business manifestations of overall economics, customer site closures and project delays, staffing shortfalls, supply chain woes, and inflation.

“It’s a process to go and find who’s spending money and what vertical is hot,” says Tyler Blake of Midwest Alarm and BCI Integrated Solutions. “But I still say there’s still customer segments or verticals that are not what they were pre-pandemic and it’s probably going to be a little bit of a longer recovery period for those people just because the losses that they had were so substantial.”

“We’ve notified customers of supply chain increases, and we are passing that along to the customers,” says Jim Lonie of Integrated Security & Communications. “We put a letter out to all of them, we’ve called it out in our quotes, so we’re not hiding anything. We’re not trying to bleed them dry; we’re passing through what we’re getting marked upon.”

Despite such hurdles Blake and Lonie remain steadfast and optimistic, in large part due to the unshaken confidence they have in the mindshare of best practices, training, relationships and leading technology they enjoy within the Honeywell Integrated Security Certified Dealer program.

Find out how they and two other security company executives (see box for details) are navigating these taxing times in SSI’s annual Commercial Dealer Roundtable.

The Panelists

  • Tyler Blake is COO of Tampa, Fla.-based Midwest Alarm and BCI Integrated Solutions. In business more than 50 years, the company operates its own central monitoring station and serves customers with a full complement of security solutions, primarily in the Midwest and Southeast.
  • Jim Cooper is vice president of technology for Millstone, N.J.-headquartered Integrated Security & Communications. Founded in 2007, the company runs four other locations in Northeast, South and West, offering a wide range of engineered commercial security solutions.
  • Ronald Haught is CEO of Quincy, Ill.-based Alarm Systems Inc. and Associated Technical Services in Milwaukee. Those interests include offering a variety of security systems and services, a fire extinguisher business, specializing in Michigan’s healthcare market. Local and national accounts span nearly 20 states.
  • Jim Lonie is a 30-year industry veteran who presently serves as COO of Millstone, N.J. -headquartered Integrated Security & Communications. Founded in 2007, the company runs four other locations in Northeast, South and West, offering a wide range of engineered commercial security solutions.

In what substantial ways the pandemic continues to affect your company?

Jim Cooper: It’s really been interesting finding balance making sure company needs are met, customer needs are met and all the different regulations are met. Because we have a national footprint every state we work in is a little different. It’s really been a bit of a challenge, especially on the operation side for field staff. We have had to make sure everybody’s compliant with the customers’ needs, not only in terms of their business but also if they fall under other government regulations we have to be compliant as a sub under that.

Tyler Blake: Maybe the most obvious impact at present is the supply chain. Not only just lead time on parts, which seems to change by the day and week, but for us and in talking to other integrators as well, certain projects, especially multiyear, are experiencing a lot of margin compression. With contracted multiyear projects, some big product categories have seen four or five price increases the past year, plus surcharges and everything else. For an integrator taking the risk on such a project they might lose their entire margin. Your product markup has now been lost to the supply chain issues.

Secondly, the other challenge remains labor. The past year was tough on not just people at work, out of work with COVID, but also the mental tax for employees, and especially now adding the supply chain on top of it. Project managers and field technicians are getting a bit mentally fried with so much change happening constantly.

Jim Lonie: One of the biggest things on the personnel is whether we can send someone to a site or not, whether you can have vaccinated or unvaccinated people on the site. Because if we have to send someone to a service call who’s not vaccinated, now you’ve got to pull someone off another team to send them there. It really disrupts your day-to-day flow and kills morale as it puts people at odds with each other over who’s vaccinated or unvaccinated. They can feel punished for being sent to a job when the other person can’t go. We’re battling whether we have to keep people at home because we can’t send them anywhere in certain states.

Ronald Haught: Something we’ve done that has really helped the situation is having custom-built COVID trailers made. We built basically portable offices with heat and filtration systems that we stock with PPE and all the stuff they would need, and shipped these trailers to specific jobsites, be it a remote site or a corporate office. These trailers minimized exposure for our staff and customers alike. That has helped as our staff weren’t confined to their work vehicles and it gave them a space to decompress, do their work and not feel like they were under the thumb.

We’ve considered employees’ wishes; although we encouraged being vaccinated, if they don’t want to that’s OK too and we just have to work around it. Specifically in the healthcare side, we’re in a lot of nursing homes and hospitals and so we must be very cautious and take that super seriously. Our guys get tested regularly, twice a week I believe. In some locations, they’re tested every time they go.

What are you anticipating overall for your security business in 2022 and why?

Haught: In conversations we’re having with many of our customers, they’re like everybody else in that we’ve all suffered productivity, business and revenue challenges. A lot of these folks were constrained by the environment and now their companies are to the point where they postponed as much maintenance work or other things as possible to the point now it’s critical. A positive that’s come out of that is in conversations about the products you’re putting in and those projects, we’ve discovered it’s a great time to talk about alternative technologies.

For example, there’s a resurgence in biometrics and understanding some of the crowd control and social distancing capabilities. With everybody wanting to bring their workforces back into offices, there is a hunger to learn about these products. So we’re parlaying that to add additional items to help benefit their business.

Blake: I believe Q1 and Q2 are going to be really strong, especially anything with larger corporate enterprise customers. My optimism on the construction side is a little bit more tepid, kind of in the mid to latter part of the year due to hangover with the supply chain. We’ve heard from a handful of projects that are so far overbudget they have been put on hold because the cost per square foot has gone through the roof.

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It’s going to be a repeat of the past two years where it’s finding where the cheese is to move to; it’s not going to be just straight up for every vertical or market segment. I am curious to see how much money from the infrastructure bill gets pushed down. There’s going to be a lot of K-12, government, university work, state work, federal work, that’s all going to come through that. I believe the money will be there but it’s going to be filled with a lot of bureaucracy. It’ll probably be closer to an 18-month rollout, and so I don’t know how much we’re going to see as soon as 2022.

Cooper: People are a little leery of traditional contact environments and are looking for ways to do contactless. Using a contactless biometric to get through your turnstile or whatever your doors are, tying some of that stuff in with automatic door operators can be an appealing and effective solution. We’re also seeing analytics, AI and machine learning gain popularity on the video side for occupancy counting, contact tracing, things like that. At the beginning of the pandemic we saw a huge surge in requests for technology, but that petered out when people realized it wasn’t performing and was too expensive.

Lonie: We’re seeing a lot of products becoming end of life that must be replaced, so that brings business. We have a couple of projects going on now where it’s a couple of million dollars of customers upgrading their infrastructure. That’s going to continue.

What does integration in security mean to you today, and contrasted against five or 10 years ago?

Lonie: Integration to me is how we can integrate into the access control platform as well as all the other systems like visitor management, health-related training, and create one customer service platform. Whereas 10 years ago, everything was disparate and you were using Excel spreadsheets to keep track of it all. Now you can create one complete integration package to put before everyone.

Blake: Beyond access control and video integration, I believe the market is really headed to a whole building management system. We’ve dived into that headfirst. It tells a really good story to customers, especially for those managing huge campuses or buildings, that they can have one product and manufacturer to bring in, in our case Honeywell, not just video and access control but also fire alarm.

Then HVAC controls and management of blinds and some of the new stuff like air quality monitoring. With the pandemic, they can see in real-time what the air quality is like in a certain part of a building. Similarly, someone swipes a badge in a part of the building and the lights turn on, and when they leave the lights turn off, and then HVAC goes down or up. Customers don’t want to manage 10 different systems, they want one interface to see all this information and data. That seems to be the problem, as most electronic building devices shifted from manual operation with say a thermostat, they all went to their own interfaces. It’s almost overwhelming at this point.

I believe the integrated future will be a full building platform. You’re seeing that already with Tyco and JCI as well. There’s a lot going on, especially with renewables and solar too. Anything high or low voltage in your building is going to be under one interface, with all the data and analytics in real-time. Customers want everything turnkey with those different systems, and one throat to choke on the integrator side that can do it all and make it go.

Cooper: Integration on the security side of the house has come a tremendous way. Years ago, if you were going to integrate your card access and video you did it with relays and inputs and outputs. You had 200 cables tied between a matrix and a bunch of relay output boards on your access control. We called that integration. An alarm point goes off and we spin a p/t/z around over coax to get a shot of the door. Now, we look at integration as information sharing.

We have to look at it as more of an overall solution, not just security or fire or building automation. It’s also an integration of building intelligence and people intelligence, bringing in HR systems and tying all that together. Integration for us is doing something else with data in a meaningful manner and doing so in an easy way.

Years ago, if you asked anybody in this industry if your software has a REST [representational state transfer] API, they wouldn’t have known what the heck you were talking about. Now we don’t even evaluate platforms without an open API that we can integrate with. If there is a desired integration that doesn’t exist off-the-shelf today, we want to be able to develop it ourselves. The last engineer I hired had no industry experience, but he’s got software development and electrical engineering experience. That’s a tremendous boost to the rest of the team, bringing in someone with outside thought.

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Let’s be honest as an industry, we’re pretty far behind the times in general. We’re not the fastest to adopt new technology. Bringing on somebody who doesn’t have that history can help drive some of the integrations and the market forward. You’ve got a REST API on these three systems, let’s come up with a middleware that makes everything talk together. It’s all standardized, we can control the flow of information and at the end of the day our customer gets a nice integrated, seamless solution.

We want to cut down, touchpoints and take away manual actions to make their job easier. From an access control perspective, if we do that with their HR system, now on a new hire you don’t have to type somebody’s name in. We can automate a lot of that stuff, and that’s what we’re looking at for integration. It’s a cool buzzword but once you’ve integrated your card access and video, what do you do with it? True integration can go further and have a lot more meaning to the end user’s overall operations than just the piece of it we normally deal in.

Haught: From the smart building perspective, we have had some success in specific verticals, but it’s not for everybody. We would love to dive into this further, but to go back to the pandemic, we can’t find enough people to really expand those specific markets. You might be able to go sell it, but then you’ve got to be able to service it and maintain it. I’ve steered clear of some of that. I’m looking forward to this thing calming down so we can go to that next level. I believe in the next 12-24 months it is going to be huge.

I was just dealing with a project involving a large HR integration in the Pro-Watch. It’s been a bit of a challenge because of the HR platform we’ve been asked to integrate into and the way some of those things are done. It’s all about educating that customer, making sure you evaluate those risks and being able to implement what you promise you can do.

How does Honeywell’s Integrated Security Dealer program help you succeed?

Lonie: Honeywell has brought us to the table a lot of times in our area with customers that aren’t quite satisfied with their current integrator. They bring us in and, in turn, we like to lead with that product. When we have an opportunity, a new customer or business platform open to anything, we like to bring Honeywell to the table because their building solutions are something everybody’s looking toward. Honeywell has tied all their different platforms together really well, so it’s a persuasive presentation to customers. It’s a great partnership.

Blake: The thing Honeywell gets right is they understand it’s a partnership, from Rick [Koscinski, Honeywell general manager] and the entire team down. The reason we always go back to Honeywell is the people. They really do make a big difference. It’s good to have a team of people over there that have been doing this not only a long time, but really understand it’s a two-way street. There’s a lot of new entrants to the market and certainly other large manufacturers that don’t really get that aspect of it. They might see you once a quarter and they’ll only want to know how many X, Y and Z widgets you sold. There’s no true partnership there.

Cooper: It’s a great relationship. Honeywell really knows the dealer base and where people’s strengths are. When a customer has a unique requirement, they do a good job with saying, “Hey, here’s the best partner for what you’re looking to do.” On our side, it helps that it’s a 1,000-pound gorilla. Everybody knows the Honeywell name. When you’re proposing a Honeywell system, you automatically get that brand recognition. Even somebody who doesn’t know the space knows it is a big company with a lot of backing. That helps make our job easier.

Haught: I want to echo Tyler’s sentiments; it is from the top down. Our relationship with Honeywell is just that. We have the ability to reach out and touch them when we need it. It’s not just the relationship of Honeywell staff, but it’s the environment Rick and his team have created in allowing us as integrators to be able to reach out to other integrators and work together on projects without fear of people stepping on each other’s toes or trying to steal business.

It’s a fairly tight group at the top, and I’ve not experienced that type of relationship with other manufacturers. It’s beautiful because we will call each other sometimes and say, “Hey, I got a question or a problem.” “Hey, can you do this?” Everybody tries to help each other and that’s not necessarily supported by a lot of other manufacturers. These guys facilitate that conversation, even if it’s indirectly with other integrators, to make sure everybody’s on the same page and willing to work together for a common goal. That is to move that goalpost for all of us as a brand as well as an industry.


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