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If anyone knows of good ROI resources for security or LP, preferrably including the explicit methods used, etc. with regard to either security or LP, I'd appreciate knowing about them.
(These could be case studies, explanations of principles and methods used, etc.)
Also, if someone knows of ROI methods used in comparable areas, like safety programs or systems, emergency management, law enforcement or even healthcare compliance programs, I might be able to adapt or modify methods from those examples.
The security industry has a long way to go in developing its own authoritative methods of performance metrics, while more and more CEOs are demanding to know what they're getting for their security dollars. This often leaves us with the difficult task of "proving a negative"...i.e., the value of what didn't happen versus the cost of countermeasures. Even certain "counting" metrics aren't very satisfactory: "We prevented 3 unauthorized entries"...yes, but what's the dollar value of accomplishing that, relative to the cost?
We know intuitively, for instance, that a workplace where employees feel secure (compared with one where they don't) will experience higher productivity, lower turnover and will probably have a lower absentee rate, to say nothing of fewer WC and other insurance claims. It will also likely have a much lower exposure to various forms of legal risk (lawsuits, labor complaints, etc.).
Now, the CEO knows the same thing - intuitively. The problem is, more and more of them are asking how do you prove, in dollars and cents, what security (as opposed to improved hiring practices in HR, for instance, or the improved compensation package) contributed to our net income of $100,450 this year? How much of that "belongs" to our security program?
The question is also obviously critical when it comes time to budgeting for security programs. Every departmental budget competes with every other departmental budget, especially for discretionary dollars...and ROI has a lot to do with who gets them and who doesn't. In short, the executives are going to give the dollars to whoever can prove that they can use them best to do one thing: adding to the company's bottom line profits, and not just "keeping a bunch of possible bad things from happening".
One approach is to use the company's history, or horizontal analysis, from one period to the next: We had 3 burglaries last year costing us $10,000 each and this year we had only one, so we saved the company $20,000. Unfortunately, this is only really valid when everything is fairly static so that comparing one period to another is appropriate. If things change - burglary rates in the immediate area, company doing business in a new location, other businesses moving into/out of the area, lower/higher employment rates, opening of a new freeway nearby, changes in LE patrol activities, and who knows what else - the historical comparison may be completely invalid because changes could be due to factors other than the security program.
Thanks!
(These could be case studies, explanations of principles and methods used, etc.)
Also, if someone knows of ROI methods used in comparable areas, like safety programs or systems, emergency management, law enforcement or even healthcare compliance programs, I might be able to adapt or modify methods from those examples.
The security industry has a long way to go in developing its own authoritative methods of performance metrics, while more and more CEOs are demanding to know what they're getting for their security dollars. This often leaves us with the difficult task of "proving a negative"...i.e., the value of what didn't happen versus the cost of countermeasures. Even certain "counting" metrics aren't very satisfactory: "We prevented 3 unauthorized entries"...yes, but what's the dollar value of accomplishing that, relative to the cost?
We know intuitively, for instance, that a workplace where employees feel secure (compared with one where they don't) will experience higher productivity, lower turnover and will probably have a lower absentee rate, to say nothing of fewer WC and other insurance claims. It will also likely have a much lower exposure to various forms of legal risk (lawsuits, labor complaints, etc.).
Now, the CEO knows the same thing - intuitively. The problem is, more and more of them are asking how do you prove, in dollars and cents, what security (as opposed to improved hiring practices in HR, for instance, or the improved compensation package) contributed to our net income of $100,450 this year? How much of that "belongs" to our security program?
The question is also obviously critical when it comes time to budgeting for security programs. Every departmental budget competes with every other departmental budget, especially for discretionary dollars...and ROI has a lot to do with who gets them and who doesn't. In short, the executives are going to give the dollars to whoever can prove that they can use them best to do one thing: adding to the company's bottom line profits, and not just "keeping a bunch of possible bad things from happening".
One approach is to use the company's history, or horizontal analysis, from one period to the next: We had 3 burglaries last year costing us $10,000 each and this year we had only one, so we saved the company $20,000. Unfortunately, this is only really valid when everything is fairly static so that comparing one period to another is appropriate. If things change - burglary rates in the immediate area, company doing business in a new location, other businesses moving into/out of the area, lower/higher employment rates, opening of a new freeway nearby, changes in LE patrol activities, and who knows what else - the historical comparison may be completely invalid because changes could be due to factors other than the security program.
Thanks!
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