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Shrink Prevention on a Budget

If you’re a retail loss prevention executive and reading this article, there’s a 99 percent chance you’re already working under a budget. This article will discuss security technology decisions and offer both short- and long-term considerations. Hopefully, it will also provide insight from a manufacturer’s standpoint.

Before we get into specifics, the two types of budget considerations I’ll discuss are capital and operational. You may have individual budgets for both or just have a single annual sum you’ll need to allocate to all security products and third-party services. Your security technology may also fall under your company’s IT department with loss prevention as their customer. This article will also explain where each budget strategy is applicable.

How Do I Choose the Right Physical Security Technology Platform?

If your current technology for cameras, video recording, access control, intrusion, and third-party monitoring are all meeting your current needs and long-term vision, you can stop reading. However, if you’re debating a technology change because of under-performance, end of life, cybersecurity concerns, or availability, the first decision you’ll need to make is choosing the right platform.

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The top criteria for selecting a new physical security platform should be hardware. Is it proprietary or open architecture? The definition of proprietary hardware means it will only work with the manufacturer’s software. With proprietary systems, if your needs aren’t being met, you’ll need to buy new cameras, video recorders, or access and intrusion panels. Essentially you are locked in, and budgetary replacement costs will be steep.

Open architecture, by contrast, means peripheral hardware will work with a variety of security management software providers. Likewise, the security management platform will support much different hardware options, so if cost, performance, or availability become an issue you can add or change with the minimal possible capital budget expenditure.

If you’re moving to a new open architecture system for hardware or software management, there are multiple considerations you’ll want to evaluate in addition to the cost. Every year new companies enter the space, but few end up being viable long-term technology partners. One of the first suggestions is to look at the size of the company and its market share in retail. Ask for a list of their top customers and verify satisfaction levels. If references confirm they’re happy long-term customers, then the product you are considering has an established track record. That’s a good start.

You’ll also want to know how much, if any, of your current infrastructure will work with your new platform. For example, if you need to switch your access control (AC) platform, what existing hardware will work and what will require full replacement?

For access control, many existing card readers and some controller panels can be reused. However, most of the AC systems sold in the early 2000s and before were proprietary and some older manufacturers have ended the sale and support of these systems necessitating a changeout. If that’s your scenario, ensuring current card credentials are supported will be a primary consideration to minimize disruption to business continuity.

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The same holds for the camera and video recording platform. Most open architecture platforms support hybrid configurations of both analog and IP cameras. This means you can use high-resolution IP cameras on public view, customer service, and point-of-sale (POS) while retaining analog cameras at lesser viewed locations until a budget is allocated. This strategy allows the available capital budget to be spread across more stores, where crucial video evidence is most likely required.

Intrusion system replacement is usually necessitated by older equipment that can’t support newer requirements, frequent product failure, or a change in the monitoring process. The conventional method of a burg panel connected to a third-party central station is now being rethought by some major chains. The annual operating expenditure for this service can often justify bringing monitoring in-house as part of the security operations center (SOC) responsibility. Newer, more accurate technologies like light detection and ranging (LIDAR) are replacing passive infrared (PIR) motion sensors and door contacts. If your company has substantial false alarm response fines, or thieves have defeated systems, you’ll find the investment can provide a return on investment (ROI) you can justify to a capital expenditure committee.

What’s Involved in Moving to a Unified, Open Architecture Platform?

Unified, open architecture software platforms that support video, intrusion, and access control as well as new hardware technologies are a sound long-term investment. From a budget standpoint, these software platforms can be consumed as an upfront perpetual license or as software-as-a-service (SaaS).

SaaS has a lower upfront deployment cost and will include all future support and upgrades. Your company IT department will already be familiar with SaaS as it’s the common model for everything from operating systems to POS platforms. It usually falls under operational budget and is a contracted annual cost, over a multi-year term.

- Digital Partner -

SaaS costs are determined by the specific services provided along with the software. The most common are cloud related and when many people hear SaaS their immediate thought is a cloud product. However, SaaS can be used in the acquisition of fully on-premise systems as well. Think of it like a leasing model where the new software platform can be acquired over multiple years. From a budget perspective, this allows large deployments to accelerate rather than being dependent on annual funded rollouts.

What about On-premise vs. the Cloud?

There are many variations in security cloud products and services and how they can be budgeted. Your company IT department very likely has its own cloud space now. A few companies are using their own cloud presence to host the security platform head end and manage on-premise video storage. That’s part of the flexibility of unified, open architecture software platforms. If bandwidth is available, they may even choose to stream the video back to centralized storage in their cloud. This eliminates on-prem recording hardware and the associated repair and replacement costs. Depending on your company’s long-term strategy this may be a roadmap item you’ll want to make sure any new platform you’re considering will support.

Another potential strategy your IT department may be considering is virtualization. This approach consolidates on-premise servers running various programs. This in turn reduces the overall hardware requirement and maintenance costs, and offers energy savings. Depending on the size of your camera deployment, having your security software platform operate in this virtual environment may make sense—if the security platform supports virtualization.

Another option to consider is third-party security cloud products. Just like SaaS, these offerings will be a contracted subscription over a defined annual term. The variations are the cost basis for these services. It’s important to understand these variations and ask the right questions based on your business objectives.

Cloud-managed or hosted video and access control services have burst on the scene over the last few years. Many are venture capital-backed start-ups with a recurring revenue risk management solution (RMS) business model. The draw of these services is reduced administrative management of the system. This typically includes things like system health and firmware updates. What it may not include are specific tie-ins to other programs like video to your intrusion or exception based reporting (EBR) platform that minimize investigation time. One absolute is they all require bandwidth and access to the internet, which will factor into the budget decision.

Combining an open architecture platform with certain cloud-managed features may be the right option to consider. Whether it’s a hosted enterprise head end, evidence management, long-term video retention, or global access control—the right platform choice should fill those needs within your budget.

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