United Oil Cuts the Wires

United Oil Co. operates 127 gas stations and supplies fuel to another 80 service stations throughout Southern California. The company wanted a dependable and cost-effective wide area network that would facilitate communications between its gas and service stations and its headquarters in Gardena, California.

The company traditionally used DSL at its field locations, but there were fluctuations in communications quality, as well as wide variations in billings. "The inconsistency made this network very unpredictable and hard to manage," says Bill De La Espriella, United Oil's director of technology. "At one station, we had a DSL provider charging $59 per month; at another station that was just one block away, the charge was $184 per month." With multiple communications lines at each station, he says the administrative office had to deal with a mountain of paperwork just to pay the bills.

In 2010, the company began investigating wireless options for its field operations, including 4G cellular communications and satellite connections. "Many of our payment processing systems were using satellite communications for network access, so we considered satellite as a potential DSL replacement," says De La Espriella. "But satellite communications were just too slow unless we paid a premium for it. We had to look for something else."

That "something else" turned out to be 4G, facilitated by a combination of Verizon 4G service and Cradlepoint routers that are integrated for 3G/4G wireless communications. "We knew that we wanted to get off of DSL, and there were a number of vendors that we had looked at in making the decision to move to 4G, but in the end, the Cradlepoint and Verizon team was able to bring to us the technology expertise and resources that enabled us to do what we wanted to do," says De La Espriella, "That was critical because the technology was new to us." Vendor expertise was also critical because United Oil runs a lean IT shop: A staff of 12 supports the company's 700 employees and IT operations throughout Southern California.

United Oil chose a phased implementation strategy, cutting over its first service station to 4G for a three-month period in late 2010, and then adding three service stations for the second three months. These four stations served as a production test bed, says De La Espriella. "It gave us the opportunity to see if the 4G technology was working the way that we thought it would, and if we could anticipate gaining the business advantages that we were projecting." The company expects the entire project to be finished this year, depending on available resources and other priorities.

While the initial rollout was successful, the move presented several challenges. For one thing, the service stations weren't outfitted for 4G. The first step was to install Cradlepoint's 1400LE routers and modems in its service stations, as well as the Verizon 4G chips that would connect the routers to the cellular network. In addition, a United Oil network administrator had to set up more than 700 VPN tunnels to secure business communications between the retail branches and the home office.

United Oil also had to meet PCI requirements to protect credit card transactions. "The decision was to move our credit card payment processing over to the 4G wireless connection, although at some stations, the brand requires that we process credit card payments over a satellite connection," says De La Espriella. "However, even in those cases, we're slowly moving to a new program that will allow us to process these transactions over wireless broadband."

As with any new technology implementation, there were some surprises. "We expected that our 4G network performance would be uniform for every service station that we implemented on it, but we quickly discovered that, even with a large provider like Verizon, it wasn't," says De La Espriella. He adds that some service stations were located in territories where the communications infrastructure wasn't as robust, and that United Oil had to pay extra to get service levels up to expectations. "Verizon has told us that they expect to upgrade their service in these geographical areas going forward," he notes.

Cellular service also wasn't always as reliable as the company needed it to be. United Oil addressed this problem by installing either an external wide-band directional antenna or a cellular amplifier/signal booster at particular retail locations. Finally, despite the seeming ubiquity of cellular service, De La Espriella says there is a small number of locations where Verizon doesn't provide either a 3G or a 4G signal. United Oil and Verizon are working to resolve the situation.

On the billing front, United Oil enjoys a consolidated bill for all its in-field wireless network communications costs. The bill includes a summary of usage per service station, which IT and accounting can use for analysis purposes.

De La Espriella says the wireless connectivity keeps United Oil's IT group in a position to continue to "work lean" as it rolls out 4G to its remaining service stations and supports operations that must deliver 24/7 customer service in a highly competitive marketplace.