5 ROI Rules of Thumb

You're likely dealing with a CEO and CFO who want to know why they should invest in Escalade-like networked digital video when they've already got a perfectly fine Chevy CCTV system.

January 01, 2005 — CSO — You're likely dealing with a CEO and CFO who want to know why they should invest in Escalade-like networked digital video when they've already got a perfectly fine Chevy CCTV system. That is, you need to demonstrate video surveillance ROI.

It's impossible to create a generic return case for video surveillance because, while its applications overlap, they are also unmanageably varied. At the Pathmark Stores grocery chain, Pedro Ramos, director of loss prevention, looks at inventory shrink and insurance fraud (customers taking pratfalls), among other issues. Sheila Bramlitt, director of corporate security at First Horizon National, must focus on cash theft and safety (armed robberies) at her company's banks. At Genzyme, a manufacturing and R&D venture, CSO Dave Kent monitors assembly lines and corporate espionage.

Still having said that, we can descry some ROI rules of thumb from these sources and others for when you're building your case for the Escalade:

*Digital video surveillance scales well. The larger your planned installation, the more remote sites you plan to monitor from a central control room, the more efficiency you can create and the faster your return will come.

*Cost calculations favor digital video over closed systems. "The economics of storage favor standard IT infrastructure," over closed systems such as DVRs, says Bob Degen, senior vice president of corporate security of First Data. "The equipment functions better with less repair. It's easier to expand on. We're in the process of building a command center. We'll put all alarms, images, sound and voice over the Web to that centralized site. That will create huge advantages."

*Integration with other systems will cost more up front but will also facilitate positive ROI. Linking video surveillance to access and safety, especially, could possibly allow you to lower insurance premiums, but also to facilitate response times to crises large and small.

*Cross-threading applications and systems allows you to share the cost burden with other departments. "We partner with safety and business continuity of course, but also, say, our real estate group," says Bramlitt. "If we can partner with them when they're building a new site, we can share the costs and benefits." It makes upgrades an easier sell, she says.

*The more things a digital video surveillance system does, the higher the ROI. What software applications, or even business activities, exist to extend the usefulness of the surveillance infrastructure? Training? Marketing? Find all the ones that are realistic for you and attach a value to them.