As you plan for future security system improvements showing the return on investment (ROI) is one of the most important tools you have to show the need for system improvements. The return on investment calculation will compare the net benefits of a project to total project costs.
The benefits to a new system can be obvious- the improved safety for building occupants and improved security for company assets. But how do you show that the investment can improve the company’s profitability? Showing the relationship between investment and profitability can make the difference between getting approved for funds or continuing with your current system.
To prepare a ROI case for your security project the first step is to collect data to show the costs and benefits for the proposed system. Before you can start this process you must first define the project. Start by stating the problem that will be solved and solution provided by the upgrades. This will help you establish the value of the project and allow it to be prioritized against other company projects.
What are the costs of the project? Make sure to capture all costs for the project including implementation and training. Your total cost of ownership for the system includes not only the cost to buy the system, but the cost to install and day-to-day costs run the system.
It often helps to use an itemized list to show all items related to video surveillance, access control, cabling and installation, training and inspections. Reviewing in this detail is also an important part of the RFP review process.
Next explain the cost of not doing the project. What happens in the organization if you do not implement the upgrades? If your proposed solution includes automation of tasks what would it cost if you had to do each task by hand. If the solution helps mitigate risk to the business what does it cost if this risk is not addressed?
After collecting all of the costs it is time to focus on the benefits. Benefits of a security system upgrade can be direct or indirect. Direct benefits could include a reallocation in personnel needed to monitor facilities or a manufacturing process. How would these benefits grow over a period of time? What could the company save from reducing the number of line supervisors from one at every station to one for every four stations? Now what would the benefit to the company be after two years of managing production in this way?
Indirect benefits are a little harder to put on paper but should not be overlooked. What is the cost to the company to have a full-time administrator manage the access control badges and system? What is the cost of a delay if that person is not able to respond to a request in a timely manner? The benefits to productivity are what you are quantifying here.
Once you have compiled all of the cost and benefit information it is time to calculate the return on investment. Providing a summary of your conclusions with the related calculations will help make the business case for your proposed security system investment.
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