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Card, mobile credential, payment and security

At the one-year mark, CBORD builds value from Diebold acquisition

Chris Corum   ||   May 31, 2006  ||   , ,

By Andy Williams, Contributing Editor

As the one-year anniversary of The CBORD Group’s acquisition of Diebold’s card systems division approaches, the Ithaca, NY-based company spans the range of colleges and universities – small, medium and now large campuses.

To Bruce Lane, CBORD’s executive vice president, the acquisition was a perfect fit with CBORD’s strategic direction. “Finally the stars aligned to make this happen,” explains Mr. Lane. “I’d been staying in contact with my competitors at Diebold for many years and I kept after them on it.”

“Prior to the acquisition, CBORD had the largest installed base of campus card users in the industry,” said Mr. Lane. “Diebold had larger university customers and that provided us with the need to meet any size campus.” Besides its 650 colleges, mostly in Canada and the U.S., but also in South Africa, New Zealand and Australia, CBORD also has about 200 corporate accounts, including hospitals and companies like Sprint and Daimler Chrysler. CBORD serves between 6 and 7 million cardholders. It is also delving into community colleges.

“We found some beginning synergies that benefited both customer bases,” says Mr. Lane. “Diebold had a very strong core competency in access control. The CS Gold access control product is highly optimized to meet the particular needs of colleges. The product has hundreds of access control installations in colleges. It’s a very powerful, defining product and we’re looking forward to bringing that to our Odyssey customers.”

The $38 million transaction addressed a gap in CBORD’s product line by adding Diebold’s access control and security expertise. The purchase also involved Diebold’s Card System employees migrating to CBORD. Most of them did, a couple didn’t, said Mr. Lane. “There were a lot of great people at Diebold that we are now happy to have as part of the CBORD family.”

Proving to the market that the acquisition makes sense …

CBORD has spent much of the past year proving that the acquisition was good for both companies. “Anytime there’s a change in the players or the marketplace, it’s always reasonable to assume that schools or employees or suppliers are going to get a little nervous. There’s no way to deal with that other than to show it was a good combination,” said Mr. Lane. “Our goal is to make the combined companies as successful as they can be, and to make it viable over the long haul. We’ve worked really hard and made the investment to show the marketplace that it was a logical move.”

For example, he said, CBORD has moved the CS Gold help desk into a new facility in Canton, Ohio. “We’ve also refurbished our training facility in Farmington, New York.”

CS Gold is optimized for large institutions while “Odyssey has a sweet spot among smaller and medium-sized schools,” said Mr. Lane.

“The Gold system is highly desired by institutions that have an IT staff and where the operators are looking for the ability to customize all levels of software for their use. These colleges have the time and resources to get into the system. The Odyssey system accomplishes most of that through user-set parameters where you don’t have to employ a programmer to do it,” he added. Another difference between the two: Odyssey can use a Sybase ASA or Oracle database, while CS Gold is Oracle-based.

“We found that when we were competitors there are customers who want a highly customizable system and others who want a very parameter-driven system,” Mr. Lane added. “(The two products) appeal to very different campus operations. They each have different system architectures. Now either type of customer can find a solution at CBORD.”

Building interfaces and finding shared components

Building an interface between CS Gold and CBORD’s signature Webfood online food ordering system, “was one of first things we did,” said Mr. Lane. Webfood, he said, is now installed in a number of CS Gold schools.

CBORD, he said, also pioneered its campus card users’ ability to use industry-standard POS terminals developed by MICROS Systems. “They’re the largest hospitality POS provider in the world,” said Mr. Lane. “When I started working with them 20 years ago, they were a small company. What’s nice is that now we’re one of MICROS’ largest resellers in the world. That gives our customers better access to service and product enhancements.”

He said Diebold had already begun to install MICROS as a better alternative to making POS terminals themselves. “So use of MICROS was a first, great similarity and point of synergy between the Gold and Odyssey systems.”

He added: “For off-campus programs, a school often takes CBORD card readers and sticks them at off-campus merchants. The readers work off the university’s host. We have hundreds of schools that do that, but we are evolving a new off-campus merchant program, a whole different paradigm to make off campus card use a lot more possible, particularly from a cost perspective.”

Integrating access control into the Odyssey platform

CBORD is also working on integrating Diebold’s access control system into campuses currently using the Odyssey platform. Before acquiring Diebold, CBORD had relied on third-party systems, such as Best, Synergistics and Sensormatic to provide access control solutions to campuses.

“Access control is different because you have to know how to deal with resident students, those on vacation, assigning students various levels of privilege,” said Mr. Lane. “Access control matrixes seem to be lot deeper for universities. They’re not a 9 to 5 operation. The matrix of privileges seems to be more complex for colleges and a lot of off-the-shelf access systems choke on that.”

CBORD is nearly complete with interfacing Diebold’s CS Access, the original native access control part of CS Gold, to the Odyssey platform. However, CBORD will still support third-party access control products if the school doesn’t want to change.

But with CS Access capability, CBORD will no longer have to pass on requests for a one-stop service that includes access control, as the company had to do in the past. “We now have the industry’s best access control system that’s highly tuned to the campus world,” said Mr. Lane. “Some (access control) companies build their systems to work well in a corporate or factory setting, but CS Access is very attuned to the particular needs of the college students and administrators.”

The CS Access portion is not being actively marketed yet. “The development work is done,” said Mr. Lane. “CS Access is battle-proven, Odyssey is battle- proven, so we hope to have it introduced within the next few months.”

The future …

Mr. Lane said he’s been very gratified with the acceptance of this transaction among CBORD’s university clients. “It seems to me the marketplace has accepted the work we’ve done and rewarded us with a number of new accounts,” he said. As to the future: “We have a lot of tricks up our sleeve and cool new things we’re going to be doing. We’ve doubled our development capability (and) we have no plans to do anything but grow. We’re very competitive and we’re very pleased our Gold and Odyssey products are widely accepted in the marketplace.”

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