How to Calculate — and Communicate — Return on Security Investments

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Many organizations find it hard to justify budgeting for physical security to protect against risks that have not happened yet. They also see security systems as a costly expense that do not generate revenue and therefore may not be worth the investment.

In the past, the only way to demonstrate the return on investment (ROI) for a physical security system was to quantify losses that did not occur. Physical security risks such as theft, workplace violence, health and life safety, and vandalism are difficult — if not impossible — to put in terms of dollars and cents. Trying to convey or calculate a return on prevented risks alone may not be convincing enough for executive teams to act.

However, now there is a new and better way to communicate that value — return on security investment or ROSI. And while the term ROSI has not become common lingo among systems integrators yet, cyber and financial security providers have been using the term ROSI for years in order to demonstrate the value of their solutions.

As it gains traction in the physical security world, ROSI will be understood as a powerful tool used to convey value and drive high-cost sales.

Optimizing Business Operations

As a concept, ROSI goes much further than the usual discussion of protection that physical security professionals rely on to make the internal sale to management. While the financial investment may be in security products and solutions, the benefits from that investment can now extend to every business operations unit across the enterprise.

The reason for this is that physical security systems such as access control and video surveillance now have the ability to deliver massive data sets. This data, paired with advanced artificial intelligence (AI)-based analytics, has the power to provide insights and information to optimize operations in many areas of business.

Compared to cybersecurity, the complete value proposition of a physical security system may initially be less obvious. For cybersecurity professionals, ROSI highlights the overall impact a potential data breach has on business operations, efficiency and the organization’s bottom line.

Today, systems integrators can use ROSI to explain how physical security systems provide a return in terms of both risk mitigation and other business value. This can help security professionals overcome the significant hurdles they often face in making the case to their executive teams as to why their organization should invest in a security system. As an integrator, understanding and adequately explaining ROSI to an end user helps them, in turn, communicate ROSI to their C-suite level executives and upper management.

Over the last several years, as physical security devices have joined the networked IoT ecosystem, they have become abundant sources of data. In particular, granular data from video cameras, access control readers and visitor management logs are valuable organizational assets which can be used to deliver returns in the form of business intelligence.

The data extracted from these devices would be impossible to gather manually at the same speed, efficiency and accuracy as that offered by networked devices. Furthermore, AI and machine learning, often embedded in physical security hardware and software, helps organizations draw additional insights from all the data being collected.

Video analytics are a great example of ROSI in action. On the surface, video surveillance systems primarily function as a preventive security measure or part of a risk reduction strategy. But integrated video analytics, such as people counting, hotspot detection and building occupancy analysis, can be used for purposes far beyond security.

For example, the metadata gathered from these analytics can be used to help manage the remote/hybrid workforce, controlling access to ensure that personnel adheres to new schedules that limit building occupancy and crowd density to meet health and safety protocols.

Today’s enterprises can take this data gathering one step further and feed it via application programming interfaces (APIs) to other parts of their organization. For example, analytics from video surveillance systems can provide insights on usage of a kitchen or other non-work area to inform architectural blueprint software being used for planning construction of a new building. This is where returns on security investments really start to shine.

In terms of health and safety, there is also a clear return on early liability detection. Using AI and video analytics, event detection can identify when an employee is engaging in prohibited behavior (for example, when an employee has entered a restricted area or is operating machinery without proper protective gear).

Besides being a risk to personal safety, ignoring regulations can cost an organization hundreds of thousands of dollars in the case of a workplace injury or compliance infraction. Detecting these events automatically and remediating behavior produces cost savings in real dollars.

Reducing Manual Tasks

Value of physical security systems can also be derived from a reduction in manual tasks taken on by integrated solutions. A security guard that would typically cost an organization can be augmented or replaced by an automated visitor management system.

Security personnel can track a potential threat across multiple disparate cameras across a facility in real time. Not only does this save time, it also increases operational efficiencies in terms of reducing manual errors and speeding up manual processes.

As our technologies become more connected than ever, it is time for physical security experts to start thinking like cybersecurity experts. The ability to effectively communicate ROSI beyond security purposes allows security directors to make a better case for well-integrated physical security systems.

For security integrators, helping to educate your customers about ROSI means more sales and an overall better industry understanding of security systems capabilities.

By bringing ROSI into the discussion, systems integrators can help their customers communicate the new value of physical security – helping organizations scale faster, mitigate issues sooner, and actively contribute to their bottom line.

Bruce Ericson is Vice President of Global Sales for San Jose, Calif.-based Vintra, a provider of AI-enabled video analytics solutions.

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