Mike Bielinski – Vodat International Ltd – The Interview

mike-bielinski-300resVodat International is the UK retail sector’s fastest growing supplier of telecom solutions and Proactive managed private networks, and provides a complete range of communications technology services to retailers with anything from 10 to 1,000 plus stores.

These solutions harness the power of an ‘always on’ connection, bringing to life the flow of data between stores and their central offices and distribution centres, and offer the retail customer a combination of telecoms technology excellence and solutions specifically designed to deliver improved productivity, customer experience and security.

Vodat International’s management team has been providing business solutions to the UK retail sector for over 20 years. Vodat is fully PCI DSS-compliant and has been awarded ISO 27001 accreditation. To date Vodat have installed and currently support network solutions in 50 UK high street retail companies, representing over 5,000 retail sites with over 20,000 supported devices. In the convenience sector Vodat customers include Musgrave, Budgens, Londis, AF Blakemore and Hendersons. Mike Bielinski, CEO of Vodat International Ltd, spoke to The Grocery Trader.

The Grocery Trader – First of all, Mike, in non-technical terms, how do you sum up what Vodat does?

We help retailers get the best out of communications technology, not just in their use of the technology itself but also the products and services that can be generated to leverage measurable business benefits.

GT – Where and when was Vodat founded, and by whom? Who owns it now?

I founded it with my three co-directors in 2002, when we saw how affordable and reliable broadband was becoming. I own the majority shareholding, with the management team owning the rest.

GT – How big is Vodat now globally? How many countries do you trade in?

To call us global would be an exaggeration; we don’t actually trade outside the UK, but we do provide services to UK clients’ operations in Europe and the USA, about nine countries in all.

GT – Where are you based? Where do you develop your technology?

We’re located in Stockport, in a converted mill. All our technical development is performed there, including integration of technologies from the USA and elsewhere in the UK.

GT – What’s your background? Do you see yourself as an IT expert first, or a retail expert?

I’m an IT systems professional turned serial entrepreneur, following seven years with John Menzies in the late seventies, and from that viewpoint I have a strong affinity with the convenience store sector. All my experience and work since has been with the retail industry, as a developer and supplier of IT solutions to the retail sector within well-known software houses, as well as through my own start-ups. I have experience in both technology and retail, but rather than call myself an expert I see myself more as a visionary who brings in experts in the field around him.

GT – How are your accounts teams set up to service the needs of retail customers?

The team is made up of business development managers, whose role is to develop new business, and account managers, who work with our existing customers and build an understanding of their business, and introduce services that will benefit them. Our partnership sales channel is focused on working with our existing partners and developing new ones who can introduce us to prospective customers looking for the solutions and services we provide. Supporting the sales team are telemarketing people, who schedule meetings with clients.

GT – How are you different from a telecoms company like BT? What do you offer that they don’t?

exterior-of-store-ashburyOur first major difference is that we provide a proactive managed service; by that we mean we proactively monitor the network’s performance on a continuous basis and react to issues in real time, sometimes well before they are even noticed by our clients. The second is that we provide a service specifically for the retail market, and our experience and knowledge of retail, plus our ability to develop retail-relevant solutions, stand us apart from our competition.

GT – Do you supply telecoms solutions to other industry sectors besides retail?

We only service retail clients. We believe to do otherwise would detract from our focus and experience, which are after all the reasons why our clients buy from us.

GT – How are your retail sector products and services geared to the specific needs of the retail sector?

Everything we develop is geared to four objectives:

• Saving costs across the retailer’s estate

• Improving productivity within the retail operation, in head office and stores

• Improving customer service through whatever contact channel the customer may use

• Maintaining and ensuring security in the retail environment, particularly in respect of the payment process

GT – If retailers have already invested heavily in telecoms and networks, do you offer them an audit service to see if they need to invest further?

Yes we do. In addition all our customers benefit from our continual research into communications technology and related applications and products.

GT – How up to speed are UK retailers generally in their use of telecoms and private networks?

The last 7 years have seen a major take-up of Internet Protocol Virtual Private Networks (IPVPN’s) by the retail community, but in our opinion few retailers are getting the best out of its management, or using the technology to the full to implement radical changes in their productivity and customer service.

GT – What can Vodat do to improve things?

We can help clients start the process by carrying out a review of their communication platforms and their use of the technology at their disposal to deliver business benefits.

GT – What specific telecommunications products and services do you offer?

We offer the following:

• proactively managed IPVPNs based on an MPLS core network with alternate access,

• IP telephony (IPT) (VOIP and Soft Pabx solutions),

• call centre applications,

• calls and lines and mobile solutions,

• secure PCI-compliant payment services – any card (debit, credit, pre paid, Loyalty and contactless), any acquirer (UK and Europe), on a range of accredited payment devices, with any EPOS device, in store and on line,

• Store Communicator – a very cost effective intra-store and head office messaging, task and diary management and media distribution application,

• E-learning and compliance tools,

• E-commerce solutions with an e-merchandising uplift application that   makes it easy for merchandisers to improve customer spend at the shopping basket,

• secure hosting services,

• consultancy services and solutions to enhance client network security.

GT – What retail productivity tools do you provide?

Our tools contribute to productivity in a number of areas. First, the IPT solution improves internal productivity by making it easier for staff to talk to each other directly and with the “presence management” feature provide direct and seamless connectivity to personnel wherever they may be – in the office but not at their desk, out of the office on their mobile or at a store, in a meeting and so on, and if not available the facility to leave and retrieve voicemail on and from their outlook inbox.

Combined with the IPT solution, our call centre application allows both inbound and outbound call management plus the facility to integrate the call with a retailer’s own CRM system, thus improving the productivity of the call handling.

Store Communicator eliminates paper and allows specific targeting of stores with, most importantly, an auditing control to ensure messages and tasks have been acted upon – again making it easier for staff to communicate more effectively.

The e-learning application takes this further, to introduce targeted compliance programs such as health and safety, alcohol and fire assessments backed by personnel specific interactive e-learning programs.

The e-merchandising product makes it easy for merchandisers to create and measure the effect of special offers at the shopping basket without having to involve technical resource.

eps_4919GT – What specific customer experience and customer interaction solutions do you offer?

Again from our product list,

• The IPT and Call centre applications enable customers to be routed seamlessly and intelligently according to their request by whatever means they contact the retailer voice (land line or mobile), e-mail or web chat. Existing clients can be recognised via the retailer’s CRM system and handled     accordingly. E-commerce customers can communicate via web chat or a ‘call me’ button. Calls to stores (often ignored) can be automatically transferred to alternate call handlers that recognise the source of the call and the store where it should be directed. In all cases the call can be stored, recorded, and measured against any relevant database to help the customer feel he is being recognised and dealt with according to his needs.

• Our e-learning programs are designed to help the retailer provide homogeneous training to staff throughout the organisation, to improve customer service at the point of sale,

• The e-merchandising uplift application enables the retailer to customise the shopping basket experience according to its customers. Coupled with a fast and secure payment service, it provides the customer with an efficient fast service geared to his or her needs, and at any point they can use the ‘call me’ or web chat feature to be put through to specific and relevant help.

• The payment services provide for secure, fast and accurate processing of the widest possible range of cards – debit, credit, prepaid loyalty fuel and so on. This makes it easier for retailers to introduce incentive and loyalty schemes for their customers.

GT – How secure are your solutions? Do you offer ‘add-on’ enhanced security products?

Vodat has the internationally recognised ISO27001 certificate for IT security compliance, and specifically for retail we are a PCI-DSS compliant level 1 payment processor. This is a process of continual assessment, and as a result we are able to offer our customers the assurance of the highest levels of security in our applications and data handling on their behalf. These are not add-ons; they are integral to everything that we offer our customers. We strongly believe that security is, and will continue to be, a significant awareness issue for retailers and their suppliers. However we also provide consultancy and security products to our customers, as well as a secure hosting facility to enhance the security of their own applications and data networks.

GT – Can you tell us how your retail customers use the products and services we’re talking about?

Everything we do for our customers is designed to drive cost out and improve both productivity and sales – we call it sweating value out of their telecommunications asset. Firstly, our customers value the proactive management of their network – it frees them to concentrate on their business without the overhead of dedicated communications personnel. Combined with our calls and lines and SIP trunking, we are able to save them significant cash on their rentals and call charges across fixed and mobile. Add to that the fact that our IPT solution both drives cost out by replacing physical switches with a hosted software application and SIP phones, thereby reducing the total cost of ownership. All our applications are part of our “Communicating Excellence” program, designed to help retail companies meet the challenges of operating multi-location retail businesses in an environment which is more complex and more competitive than ever before, with multi-channel communications affecting how and when customers shop and the added complexities of a global supply market.

Our Communicating Excellence program will deliver any or all of the above for a single annual charge, within an overall service contract that is benchmarked on an agreed basis each year. This means that we establish a true partnership with our customers where we act on their behalf to continually strive to reduce costs and provide opportunities for them to improve productivity and customer service with the latest and best in telecommunications technology.

GT – Do you have any case studies?

We have case studies on our web site from MBL, Hendersons. Beaverbrooks and Jaeger.

GT – What kinds of retail groups are your target customers?

We target high street retailers with between 10 to 1000 shops covering all retail sectors except currently hospitality and leisure. Our relationship with Londis and Spar groups is enabling us to move to the 2 to 10 shop estate, and with our new revised payment service being launched this March we will also be able to target the single shop through another channel and offer these retailers some of the benefits of larger groups in the areas such as multiple payments services, cheaper telephony  and secure fast internet access. The convenience store market is very important to our growth.

GT – How scalable are your solutions as store groups grow bigger?

It’s a good question, because up until recently our solutions have in fact only been able to be justified by bigger groups – now we can offer a very scalable affordable solution from even a single store to a thousand and more.

GT – Do you offer your solutions to the Tier 1 retailers?

They are of course available to Tier 1, but Tier 1 retailers’ dynamics are totally different to the rest of the market in that quite often they have their own telecommunications teams, who would not necessarily value the proactive management aspect of our service. That said, from a sales perspective Tier 1 is always a longer sales cycle so up to now we have concentrated on getting the fastest growth, which has resulted in us having a strong position moving forward.

GT – How do your solutions help retailers who have multi channel routes to market?

They do so by adapting to the convergence of merchandising and payment technologies to create a single integrated cross channel platform for the multi channel retailer. Our solutions such as IP telephony, the call centre application our payment services and our merchandising uplift product will allow the customer to become part of the network, through the store, kiosks, the Internet and on Smartphones. Retailers will have to grasp this new technology to get smart about how they communicate with, promote to and manage customers across all these channels.

GT – Do you supply fully managed, remote monitored services, or does the client need to run them themselves?

All of our services are provided as fully managed, but in some cases we have provided a mixture. In all cases the network infrastructure is fully managed.

GT – Do you sell directly or through resellers? How do you work with the device manufacturers and telecoms providers to achieve your solutions?

We are passionate about dealing directly with all our customers, and generally sell directly via direct mailing, telesales and seminars but we do use specific partners where applicable for introductions. In the convenience store market we are working very closely with specific groups to channel our service to them through to their own franchisees.

In terms of what we supply we take complete responsibility for the procurement, Integration, implementation and management of all of the elements required for the specific solution.

GT – We hear a lot these days about the term ‘PCI DSS compliance.’ What does it mean? How do you help retailers achieve it?

Simply put it means that both Visa and MasterCard have introduced a set of rules that apply to anyone that processes debit and credit cards. These rules are aimed at ensuring that the end to end process is entirely secure, and that does not mean just the system processes, it also includes the attitude and mindset of the personnel involved in handling card data. Getting to that state can be extremely expensive and it is not a one off – PCI-DSS certification is on a stringent annual assessment, and we believe will become more stringent and more frequent over time as the banks and the acquirers attempt to reduce fraud. This not only covers card present transactions, it also encompasses all forms of on line payments.

We help retailers specifically by providing a payment service that is not only PCI-DSS compliant in its own right, it also completely removes the need for a retailer to actually hold any card data in his own environment, making it very significantly easier – and hence cheaper – for him to be PCI-DSS compliant.

GT – For the benefit of non-technical readers, what are the benefits of PCI DSS compliance, and you as a company having ISO27001 accreditation? When do retailers’ IT systems need to be PCI DSS compliant, and what happens if they aren’t?

The first real benefit as stated above is that because Vodat International is PCI?DSS?compliant and because our solution is too, the retailer doesn’t have to go through an extensive compliance regime – bottom line, it saves them money and aggravation.

In terms of date the answer is now, but the banks and acquirers are allowing some leeway if they can see the retailer is in a plan to become compliant either himself or through a system such as ours. Unfortunately this has caused a lot of retailers to enter into longterm agreements – as long as five years – for solutions that are not as open ended and future proof as the one now offered by Vodat International.

Retailers that fail to convince their banks/acquirers that they will be compliant are experiencing charges on a monthly basis, reflecting the proportion  of fraud assessed in their card transactions. We know of some where these charges have been in the region of 5000 euro per month.

GT – How does your technology drive telecoms costs down? What kinds of savings are we talking about?

Clearly the biggest technology advance was the availability of reliable, cost-effective communications and convergence of voice and data, which has paved the way for instant and more reliable information and customer interaction. This convergence of voice and data has had a huge effect on the cost of telephone charges, to the point that any calls across the customer’s network are free. Combined with deregulation the cost of a national call has been reduced from around 5p per minute to 0.7p per minute. It started with deregulation, which initially made calls and lines simply a commodity item, but now with convergence and SIP trunking it is much easier to provide very cheap charges because the voice is being routed as data on a point to point basis and does not have to go through several exchanges to reach its destination, resulting in less interconnect charges. In the next five years it will be the additional convergence of mobile and fixed line. For example we are able to route landline to mobile calls as if they were mobile-to-mobile, reducing charges by 400% in some cases. We have been able to deliver as much as 50% savings on our customers’ telecommunication costs over the past five years.

Add to this the parallel convergence of merchandising and payment technologies to create the integrated cross channel platform for the multi-channel retailer. It will allow the customer to become part of the network, through the store, kiosks, the Internet and on Smartphones. Retailers will have to grasp this new technology to get smart about how they communicate with, promote to and manage customers across all these channels.

GT – How do you go about devising a solution for a customer? How long does it take to see a return on investment?

Another good question – sometimes the application is glaringly obvious and I can say honestly that we have far more ideas than we have products at the moment. Their development is clearly prioritised according to cost and potential, but most frequently by demand, as long as they form part of the bigger set of solutions aimed at those four objectives of cost reduction, productivity, and customer service, all within a secure environment.

However we are also driven by the demand not just of our customers but also the industry itself. Our considerable investment in PCI-DSS compliance is a direct result of this, on the basis that it would be impossible to be a player in this market unless we addressed these issues, and to that extent we have converted what was an issue into an opportunity with our unique PCI-DSS compliant payment service, which is becoming a significant revenue and profit generator for Vodat International.

In terms of ROI we aim for a two-year payback – in most cases we have exceeded that. With the payment service it will be longer but we are in this for the long haul and have a strong opinion on the importance of secure communications and applications, both now and in the future.

GT – What external factors do you see impacting on demand for your services?

Clearly the recession has had an impact, but we view it as an opportunity for us and those retailers that survive to use cost reduction in their telecommunications infrastructure as a strategic platform for change in their business – again addressing productivity and customer service. The continual war against card fraud will also benefit us, as we are able to continue to develop and implement secure solutions for our customers and prospects.

GT – Where do you see Vodat going from here?

It is a question of extending what we have to more of the market – particularly tier 3 and 4, where there are significant volumes to be achieved, and of course bringing more products and services allied to our objectives – cost, productivity customer service and security – to our existing and new customers. These are our strategic objectives. We want to be considered as the natural choice for retailers in respect of their telecommunications and all things related to how they communicate internally and with their customers.

Vodat International Ltd   Tel: 0161 406 1820   www.vodat-int.com