ROI is not a four-letter word

August 2014 Integrated Solutions

As security budgets tighten across most industries, security managers face increasing demand from CEOs and CFOs, to be able to deliver a return on investment (ROI).

At the outset, securing buy-in for the installation and/or upgrade of an expensive security technology system involves the complex task of demonstrating value to compete for limited business resources.

One of the main challenges for security managers is that companies often focus on quick returns on capital investment rather than the long-term benefits that can result from an investment in security. Although a typical investment case may be made on the basis of risk management, demonstrating the value an integrated security system can bring to the wider business is more likely to generate support from management, who typically look to profitability as a benchmark of success.

With the implementation of integrated building solutions, operators across industries have experienced the value of leveraging security technology to increase efficiency and streamline workflows. On a wider organisational scale however, we are increasingly seeing these systems deliver benefits to other areas of the business outside of security, which can be directly linked to revenue generation for the business. By getting buy-in from other departments and stakeholders within the organisation, security managers can begin to formulate a business case for investment that goes beyond security risk aversion.

Changing attitudes

Historically, investment in an organisation’s security systems has in most cases been seen as a sunken cost for the business. Some industries such as corrections and gaming have always considered surveillance critical to their business, so securing investment has not been such an issue. But commercial buildings and until recently, the retail sector, have tended to take a low cost approach to security. For these industries security was traditionally a compliance exercise to meet industry standards and provide a blanket solution to safeguard the business.

This started to change as a result of terrorist activity throughout the world, which alerted organisations to the need for the protection of critical infrastructure. Governments started identifying risk management practices that needed to be implemented to drive change. Outside of government, larger organisations that had reasonable security solutions were being forced to look at security in a holistic way, making sure they had the right measures in place to mitigate risk. For example, in the mining industry, companies adopted stricter requirements for a variety of procedures, such as the protection of explosive chemicals from access breaches. A paradigm shift began to take place in organisations where senior management looked at security as an integral part of their overall strategy in areas such as workforce management and critical business workflows.

Within industries such as retail, transportation hubs and gaming there is an opportunity to demonstrate how integrated security solutions can add value to a business. This includes revenue generation driven in two key ways:

• Direct benefits for other business areas outside of security including OH&S (occupational health and safety), marketing and legal departments.

• An improvement to the customer experience, leading to repeat customers.

Revenue generation for other business areas

There is now a greater desire than ever to identify ways in which the benefits of integrated security solutions can contribute to improved profitability across a number of business areas. Most notably, these include OH&S, marketing/advertising and legal departments.

Digital video management solutions, which can be standalone applications or integrated with building management systems, are able to provide vital video information with advanced capabilities including scrollable timelines and multiple-camera playback.

Customers who implement this type of solution can deliver operational efficiency improvements in areas outside of security, such as OH&S. By minimising the resources and costs associated with running day-to-day operations, security operators are able to dedicate more time to live monitoring. As a result, operators are better prepared to anticipate and therefore prevent accidents and issues before they happen.

In the retail industry, integrated security systems have also proven to be effective in reducing the risks associated with OH&S incidents. Large businesses in this sector spend a lot of money on insurance claims and premiums for instances where people have slipped and fallen whilst on their premises. Via live monitoring, security officers are able to monitor high traffic areas and allocate cleaners to certain areas as a preventative measure against accidents. As an extension, retailers’ legal departments may also benefit from being able to access video footage to assist in validating accident claims.

Marketing/advertising is another area in retail where revenue can be generated from leveraging the capabilities of integrated secur­ity solutions. In this case, technology is not just a tool for monitoring, but for collecting and storing data that can then better inform business operations. In a shopping centre for example, cameras can be used as sensors to monitor the level and locations of foot traffic through different entrances and within stores. This creates revenue for the marketing department, as the centre can then justify charging premium advertising rates for some digital signage or increasing rent for certain tenants depending on the identified hot spots. It can also be used to inform the product placement of certain brands and goods and drive in-store advertising effectiveness.

The IT industry has long been talking about the role of data in the enterprise sector from a business management perspective, especially for operations like sales and customer management. But the security surveillance industry increasingly is becoming a part of this conversation, as the example above demonstrates. And it’s not just shopping centres that are seeing this shift – transportation hubs like airports can also use data obtained from security systems to drive revenue. Traffic flow data obtained from camera sensor technology can be used to inform a range of decisions including where to place ATMs and what to charge tenants for retail space based on consumer demand.

Revenue generation driven by customer experience

Outside of benefits to other business areas, security technology can also be leveraged to strengthen customer relationships. There is a growing appreciation of the value in delivering a tailored and personalised experience for customers that in turn drives loyalty.

The gaming industry for example, as a heavy investor in security, is now looking at how this technology can be leveraged or modified to improve customer experience. For casinos, delivering a memorable customer experience is paramount for creating loyalty, which in turn drives repeat business. This may include leveraging capabilities like number plate recognition where CCTV cameras can be used to recognise when a VIP guest arrives at the premises. This intelligence can then be used to open the gate and display personalised greeting messages on digital screens at entry points that guide the guest to empty spots at the reserved carpark.

Retailers can also improve customer service and sales by collecting information about in-store customer behaviour. This information can inform the availability and distribution of salespeople, which can contribute to positive customer ex­periences. Given the tough market situation for bricks and mortar stores, this data can also help to differentiate a retail outlet by creating personalised experiences based on customers’ preferences. By monitoring foot traffic, stores can use insights from the navigation patterns of shoppers to determine, for example, that men spend the most time looking at business shirts. This can then streamline the layout of the men’s section to help make it convenient for customers to locate what they’re looking for.

As data mining techniques become more advanced, organisations will be able to search video footage for a wide array of patterns, relationships and trends that will help them improve their customer service offering.

Selling the business case

In the current market environment, security managers who are used to making a security case for investment in new technology will increasingly need to be able to make a business case for financial profitability.

In order to get buy-in from senior management it is critical for security managers to engage early with third-party experts to develop an understanding of how an integrated solution can be used, not just in a functional way, but also more widely across the business. This can be achieved by finding innovative ways to leverage the connectivity of an integrated security network and making sure each element of the system is “speaking” to the other. It is also essential that the business outcomes being pitched match the unique needs of the organisation.

Another critical step is to identify people within your organisation that can help demonstrate benefits to business areas outside of security. It is important to target the right stakeholders in order to secure internal support for your case. When pitching, financial profitability should be emphasised with a focus not just on cost reduction for security outcomes but also a demonstration of a return on investment that will financially benefit the wider business.

For security managers it will be increasingly important to recognise that investment in sophisticated security systems has business justification beyond traditional use cases, including operational improvements that ultimately may promote cost reduction and revenue growth across the business.

For more information contact Honeywell Building Solutions, +27 (0)11 695 8000, kevin.pearman2@honeywell.com, www.honeywell.com





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