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Technology and SOP cut shrink

The UTM Group evolved from an IT/security company in 2004 and currently has offices in South Africa, the USA and Hong Kong. The company today employs 25 people locally and has a national support footprint, providing future proofed and backwards-compatible security and networking solutions to the retail, pharmaceutical and educational sectors, as well as for residential and commercial estates.

Run by CEO, Kelly McLintock, the company offers a total security management solution handled by three synergistic divisions within the company: technical support, sales and monitoring. The offering includes managed surveillance, access control, time and attendance, and business intelligence, all aligned with best practice technology.

Focusing on retail, McLintock says UTM addresses this market by offering a comprehensive solution that looks at loss prevention as a whole. UTM is able to integrate the latest technologies and business processes to manage all five levels of shrinkage in retail. The five levels are:

Administrative shrinkage,

* Customer shrinkage (shoplifting),

* Fraud,

* Contractor shrinkage, (contract labour, guarding and cleaning staff) and

* Supplier shrinkage.

“Of these five options, contractors and the company’s own staff in some retailers make up 90% or more of the annual shrinkage in retail operations,” McLintock explains. “Some of this is the result of opportunistic theft, but most is planned.

“And while almost every retailer makes use of guards to protect their assets, the reality is this is one of the largest contributors to costs and often one of the key areas of shrink. The peace of mind retailers and their customers gain from visible guards does not make up for the losses that occur.”

Delivering real ROI

McLintock suggests companies can cut losses by replacing a percentage of their guards with technology. And while many vendors will tout CCTV systems as the solution to retailers’ shrinkage problems, McLintock says it has its uses, but is most effective as a management tool. The real benefit of CCTV is in its use in conjunction with other systems and processes in fighting crime.

In this regard, he says that while sweet hearting and collusion occupy a significant share of shrinkage today, the problems cause by syndicates is growing. UTM has found that more syndicates are planting employees within retailers with instructions to move into specific positions where they can assist in theft and fraud. Due to this increasing threat, UTM includes covert operations in its security solutions.

UTM has found covert operations and POS (point of sale) integration as the areas in which it sees the best ROI (return on investment) for retailers with respect to shrinkage. And, as expected, EAS (electronic article surveillance) assists in stopping front-door shrink to an extent, but it is not a 100% effective solution.

It is not all about technology however. McLintock says an important part of loss prevention in the retail environment is standard operating procedures (SOP). With the correct SOP in place, retailers automatically see a reduction in losses because it is easier to notice when employees ignore the processes the company has in place. In addition, SOP eliminate excessive costs in operations, which again delivers an improved ROI.

Exploiting retail data

When considering all the information collected in retail operations daily, from POS transactions, delivery notes and even overt and covert CCTV footage, it is clear that retailers are in possession of an enormous amount of data. McLintock says one of its clients requires eight petabytes (roughly 8000 terabytes) of storage per annum from its CCTV operations alone.

UTM assists companies, not only in monitoring their camera operations remotely, but also in analysing historical footage. This analysis assists clients in finding patterns and SOP breaches that were not noted in the live monitoring situation, providing invaluable information.

This information not only deals with shrinkage, but can also help the company use its security cameras to determine the best processes for optimising revenue. Issues such as people counting, the route customers take through the store, which displays attract their attention and which are ignored, dwell times in front of specific areas, heat maps and so forth can all be analysed to improve processes. This allows the company to extract additional value from their security investment and improve revenues.

Understanding security

While the technology and insight is there to significantly improve retail operations from a security and business perspective, McLintock says not all retailers are moving in the right direction at the same speed. The reason is that many of the IT and analysts they hire to assist them, while having their relevant skills, are not well versed in security, or risk managers are not being well versed enough in IT.

This results in a lack of understanding of the abilities of the available risk technology as well as the storage and bandwidth requirements involved. This often leads to misunderstandings in the rollout of solutions and a perceived lack of performance and ROI. It also prevents many companies from experiencing the benefits of using security systems as business improvement tools.

To ensure the reliability of its monitoring and data analysis operations, UTM manages its own national MPLS (multiprotocol label switching) network. It also ensures its installations are done according to standards set by the British Security Industry Association (BSIA), the leading security standards authority in the world.

McLintock also notes that UTM’s success is not the result of technology, but the strength and quality of its team. “We deliver what clients expect because we look after our staff and create a positive working environment,” he adds. “This allows us to build strong relationships and deliver a consistently high quality of service.”

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