Business Story: Outsourcing Makes ROI Sense
In today’s climate of heightened concern for security, chief security officers, building owners and managers ask hard questions about the costs of effective building security systems and the resulting return on their security investment.
Once installed, “run-it-yourself” security systems become the responsibility of building owners and managers, who often have to create a technological infrastructure and hire or assign staff to run the system--24 hours a day, seven days a week, 365 days a year. To address the requisite elements of installing, operating, and managing a reliable, functional security system, owners and managers are faced with multiple layers of costs, from purchasing equipment, to monitoring alarms and revoking access cards, to ensuring prompt repairs, to providing for system operation in an emergency.
A better alternative to installing run-it-yourself security systems is outsourcing security system operation and management to experts. Outsourcing allows building owners and managers to significantly reduce their costs, provide better security for their employees and tenants, and eliminate the 24/7 headaches of system responsibility.
Analyzing the ROIA security system’s return on investment varies significantly depending on whom the building owner elects to run the system over its lifetime. The cumulative savings generated by outsourcing to experts the operation and management of a building’s security system are significant compared to running the system in-house. Outsourcing lowers costs more than 35 percent over a six year period – the estimated life of a typical run-it-yourself system.
Anticipated costs, hidden costsBuilding owners ask, “How much will my building’s security system cost?” as they anticipate the obvious expenses such as system design, installation, maintenance and security officers. But in fact, the true cost of a security system involves a host of other, less obvious expenses: the costs of running the system on an ongoing basis. With outsourcing, all of the obvious and not-so-obvious costs are included in one outsourced operations fee each month.
Obvious costsDesign and Installation: The cost of system design and installation for a run-it-yourself system will be higher than an outsourced system for two reasons. First, a security consultant will charge approximately 20 percent of the system’s purchase price each time he is hired to design a run-it-yourself system, whereas system design is included in the purchase price of an outsourced system. Second, security systems that are installed and run by an outsourced provider will never become obsolete, whereas run-it-yourself systems are typically replaced every six years.
Maintenance: Maintenance costs are comparable for run-it-yourself and outsourced systems, but clients may have to wait hours or days for service from a third-party vendor, while an outsourced provider employs service and maintenance technicians 24/7/365 to respond quickly to calls, including after hours, weekends and holidays.
Security Officers: With an outsourced security system monitored by experts 24/7, fewer on-site guards are required to monitor and initiate the appropriate response to alarms and critical events.
Not-so-obvious costsOngoing Monitoring: Run-it-yourself systems often hire an external provider to monitor only the fire panel. Outsourcing security system operation and management encompasses ongoing monitoring of all alarms, including fire, life safety and other critical mechanical systems, as well as propped door, intrusion and tamper alarms.
Ongoing Administration: A run-it-yourself system generally requires an inhouse security staffer's time for several days each month to issue and revoke access cards and run visitor and employee tracking reports. Outsourcing allows employees to focus on their primary responsibilities instead of security system administration.
Ongoing Programming: Owners must hire a programmer for several hours each month to respond to constantly changing building and tenant needs, such as programming perimeter doors to lock at a different time on a particular day. An outsourced security system includes this ongoing programming as part of the overall fee.
Ongoing Operations: Emergency generators, redundant computers and a 24/7 security or IT staff are required for the physical infrastructure of a security system to operate properly. With a run-it-yourself system, the security, network administrator or building engineer is responsible for troubleshooting, which interferes with their other responsibilities.
Ongoing System Changes/Upgrades: Systems software and hardware must be continuously updated to avoid system obsolescence, without disrupting system operation. All changes and upgrades must be done within the context of the system’s existing configuration to ensure it remains functional.
The Bottom Line: Outsourcing reduces costs and improves ROI significantly.
Lower cost is only one benefit of outsourcing. Office building owners and their security executives report that by outsourcing, they are able to focus on more business- and security-centric tasks. Higher rates of tenant retention result from tenants having confidence in their building’s expertly-run security system. With a thorough understanding of the hidden, as well as the obvious costs of a security system over its lifetime, building owners and managers can make an educated decision regarding how their system is run. The facts are clear: Hiring an outsourced expert to operate and manage a security system will have a significant, positive return on investment.
SIDEBAR: Branch Properties Uses IP Video at Roswell Town Center“The city government is thrilled that Branch owns the center because they know that we have made both a financial and personnel commitment to the community. We have cleaned up the center and invested in the security services that make it a safe place for the patrons. It improves the overall quality of the community.” - Dena W. Hughes, senior property manager, Branch Properties LLC
Challenges – Roswell Town Center has an entertainment complex open in the evenings that attracts crowds of young people. The community youth enjoy these public facilities, but sometimes get carried away. Ensuing problems include drunkenness, disorderly and inappropriate behavior, fights, graffiti, vandalism, car break-ins and minor accidents.
Solution – Incom Interactive Surveillance has installed 8 Axis network cameras and 2 stationery ones running through an Axis 240Q video server. All are centrally monitored 24/7 by Incom operators using Milestone XProtect software. The operators also take emergency calls from call boxes Incom has set up around the center. A policeman is on duty weekend nights, and keeps in touch with the Incom surveillance operator, as well. Branch property managers also have remote access to the surveillance system, and receive daily event reports from Incom.
Advantages – Branch Properties has better control over the security situations and are able to provide faster response and evidence for resolving issues. The safety of people and the protection of property are ensured round-the-clock.