Diebold prides itself in the talents, efficiency and profitability of its service arm, one of the best in the industry. But service has taken some interesting turns in Diebold’s history, from the days in which it was simply given away to a turning point in 1948 when it was decided that service could be a successful profit center. A very successful one.

Diebold’s service department was first formed in 1915 when we purchased the Marsh Time-Lock Company of Chicago, Ill. Service then meant keeping the customer happy, not making money.

In the 1930s, business fell to a low ebb due to the Great Depression and bank closings. We found ourselves simply trying to hang on. Our product mix included safes, vaults and timelocks, and the job of the service technician – then called field installers – was rather small and specialized. They were just to clean and inspect the timelocks.

Around 1939, with the advent of our mechanical file product lines, service took on a new life. The mechanical files had many moving parts that technicians had to adjust, repair and lubricate. But still, this was done as an adjunct to sales, not as a money-making operation.

In 1946, we acquired the O.B. McClintock Company which had a small nationwide service force of 40 people who serviced security systems.

Following on the heels of that acquisition, we purchased the Yale Safe & Lock Company which serviced a large base of timelock customers in the East. When we purchased Yale, we took on and grew the lock work business, giving us more work and the need for more service people.

Because service was growing rapidly, a corporate review of its function and value was held in 1948 and a critical business decision was made. We decided to treat service as a separate profit center. Although the service force was not large, we began taking more and more service work back from independent contractors and doing it ourselves – for a price.

Service became a stable pursuit for us, especially so when it came to alarm systems. Insurance companies of the day insisted banks provide them with a certificate of compliance to receive a break in rates. The certificate merely stated the bank had a working security system that was routinely maintained. It was a windfall to Diebold whose experts dealt with those systems.

Later, however, the Bank Protection Act established minimum standards for security and the insurance and financial industries accepted the Act as the only necessary standard they needed to meet. Competitors rose to grab large pieces of the business. Diebold’s profits took a hit.

With the advent of the ATM in 1974, the number of our service technicians grew dramatically. Everywhere we placed an ATM, we had to have a technician available to service it.  By 1979, the increased number of ATMs allowed our service arm to become very profitable.

Service remains profitable today. Half our revenues come from service, sometimes called “the heartbeat of the company.”