Determining the correct amount of protection to give your assets and facilities can be difficult. Ensuring you use only the most cost-effective security solutions requires you to first have a good understanding of your unique security threats and operational needs.
So how do you determine the right amount of asset protection? For an answer we’re going to give you a sneak peek at the analysis our security experts use with new customers to quantify the true costs of their lost or stolen assets. We do this by looking at three factors:
- Material Cost - The replacement cost of the asset itself.
- Operational Cost - The lost revenue and cost in staff hours working without the asset.
- Security Risk - The potential damage to people, property, or reputations if the lost asset is misused.
Our security specialists use this information to generate a report for new customers on what value different sized asset protection solutions will deliver to them over the long term. Our customers can use this analysis to help make an informed purchasing decision.
Quick Example: Protecting Keys
It’s pretty easy to use this appraisal to analyze the costs of lost physical keys:
Material Cost: This would be the cost of rekeying, which can be expensive, especially when the lost key is a master or grandmaster. Or in regulated industries.
Operational Cost: When keys are lost it slows down or even prevents access to the secure areas or assets they were protecting. So the operational cost would be an estimate of lost productivity.
Security Risk: A missing key represents the possibility of theft or further damages. The security risk is an estimate of such damages.
Organizations holding any number of sensitive keys pretty quickly find it cost-effective to implement an electronic key control solution. But the right level of protection for other assets often is not so easy to determine. Let’s walk through another example in detail: handheld radios.
Detailed Example: Securing Handheld Radios
There are a variety of options here between physical lockers and electronic security lockers. Electronic lockers can automate much of the asset protection process. Others offer built-in charging ports or can be centrally managed. So while they can add operational efficiencies, those come at a cost.
Let’s walk through how we determine whether a particular asset locker solution is cost-effective for a customer looking to secure radios.
This is the easiest factor to consider since it’s already quantified. It’s also usually the least important. A wide range of radio models are available today, from $50 off-the-shelf consumer models, all the way up to hardened APCO-25 models costing thousands. So the impact of their loss can range anywhere from inconvenient to mission critical.
At the upper end of that range an organization with only just a handful of P25 radios could justify the purchase of an electronic asset locker system on the replacement cost of the radios alone. But for many organizations using more standard commercial radios this isn’t the case.
The more integral an asset is to your operations the greater its loss will be felt. And often the staff-hours spent managing its loss will be greater. Searching for it, reordering, configuring, and so on.
For example, a hotel or other organization in the hospitality industry may use radios only to help coordinate periodic conferences. Not mission critical. However, a large, multi-building corrections facility may rely on radios constantly. Very mission critical, and often regulated.
Quantifying the operational impact of lost radios in the second scenario very likely makes electronic asset lockers cost-effective for that corrections facility.
Then there’s the risk of further damage to the organization if the asset is lost or stolen. Let’s take radios in corrections facilities again. There’s also a need to control inmate access to institutional assets like radios. Their theft could create a public safety risk beyond the immediate risk to the facility.
At this point if there’s a quantifiable risk to the public, an organization’s intellectual property, or other intangible, beyond the immediate replacement cost and operational impact, in most cases it immediately becomes cost-effective to deploy an advanced system of asset management.
This three point analysis is a good ‘back of the envelop’ way to evaluate the cost-effectiveness of any security system. Rather than comparing product features, the key is to focus on the value delivered to your organization and the unique demands they can meet. It’s not about the technology, it’s about your business.
For an even deeper dive into security ROI check out our 6 Step Purchasing Guide, which gives more details on quantifying risks and calculating the Total Cost of Ownership for higher end security solutions.
Originally published February 22, 2017, updated June 20, 2018