To figure out whether it’s time for you to implement an electronic key management system—or for some of you, implement your first key management system—you have to figure out whether it’s worth it: whether it’s a good investment that will deliver a quick and substantial return.
That return is not the case for everyone. One example: we spoke with a car dealership recently that wanted to discover if a KeyTracer key management system was a wise investment to help secure the keys to their inventory of automobiles. What we did with them—and what we do with every potential customer—was to perform an analysis of their current costs, compare the results with the cost of a KeyTracer system to replace it, and then let the crunched numbers speak for themselves. In this case the numbers said No—the dealership would be better off with things as they were than investing in a key management solution. Far more often, the companies we talk to say Yes.
But you can’t crunch key and asset management numbers if you don’t know where to find those numbers in the first place. That’s not always as simple as it sounds, since a lot of costs—tangible and intangible—are either obscure or hidden entirely. Simply funneled through accounting they seem like insignificant operational costs (just to pull one out of the hat: the costs to maintain guard uniforms throughout the year). But looked at as a part of overall operating costs, they can truly mount up and form a small but not insignificant element of your ROI calculation.
There are no cookie cutters—no models—for you to follow here. Every organization is different, its costs are different, its key management ROI formula is different.
But there is a framework: a way to think about and uncover the complete costs of the way you handle key and asset management today. It’s a framework that operates on a few common-sense principles:
- Every nickel counts. The salary of guards is obvious. But supplying power for them, keeping their uniforms clean, providing parking spots: all that costs money too.
- Costs are tangible and intangible. The tangible cost of a key cabinet for that guard to watch is easy to track. But the various intangible costs associated with tracking down a lost or forgotten key are harder to nail down.
- Costs are sometimes measured in risk avoidance—key management investments are often insurance policies against legal and other exposure. The cost of reprogramming a lost key may be negligible to an auto dealer, but the cost of replacing a master key can be a giant hit to a penitentiary.
As I say: there’s no one-size-fits-all answer to this. When we talk with companies about their own challenges, we share thisframework with them and work together to uncover what their current key and asset management processes cost, and if a Key Tracer solution is a smart investment. We’ve boiled that process down to a few basic approach points—the cornerstones of our framework—in a brief white paper with a long title: The Pieces of ROI: A Framework for Understanding Key and Asset Management Investments.
It doesn’t have all your answers . . . but it’s definitely the best place to start.
About the Author
Jay Palter, VP of Marketing