When you purchase a security system for your business, it may be difficult to see what return on investment your security system will bring you. In this case, what’s the return on investment on something that doesn’t happen? Your security’s return on investment depends on what events you can catch or put a halt to altogether. When there’s trouble, your system can put a stop to it, letting you keep that money in your pocket. Since it’s a little more difficult to calculate a “normal” return on investment, we’d like for you to think about it differently than you would before. Here are just a few measures for your security’s return on investment.
What’s the Value of Nothing Happening?
Many of our clients have businesses that thrive on tangible reports that are based on cash flow. However, this can’t be the case with a security system. When you make the initial investment to purchase a security system, it’s impossible to measure your success in terms of how much money it earned you. Simply, it can’t work that way. Instead, we’ll start with the first measure of your security’s return on investment. Calculating the total cost of ownership (TCO) may give the best idea of your security’s return on investment. The Association of Financial Professionals uses these equations to give a solid estimate:
ROI = (Security cost avoided – Cost) / Cost
ROI= (Annual Loss Expected * Mitigation Rate – Cost) / Cost
ROI = [($Single Loss Expectancy *Annual Rate of Occurrence) * Mitigation – Cost] / Cost
What’s the Value of Something Happening?
In the event of an actual loss, it’s necessary to assess the possible risk of choosing not to get a security system. For this example, consider a few risk assessment concepts like single loss expectancy (SLE), the annual rate of occurrence (ARO), or annual loss expectancy (ALE). To demonstrate a possible situation, read the scenario below from CSO:
“Echo Inc. has been suffering from increased security breaches for the last few years and is considering investing in a user behavior analytics (UBA) solution. However, the executive suite is not convinced the investment is worth it. The new CIO has decided to run some numbers. Echo’s CIO estimates that Echo has been suffering about 10 (ARO=10) security incidents per year for the last three years. These incidents seem to cost about $20,000 (SLE=20,000) in data loss, fine, and productivity. The UBA solution is projected to block about 90% (mitigation ratio = 90%) of the attacks. However, the costs causing the solution is an estimated $50,000 per year. In this scenario the equation would be the following:
ROSI = ((10 * 20000) * 0.9 – 50,000) / 50,000 = 260%
The investment in this example of $50,000 per year would save Echo Inc. an estimated $130,000 per year. Put simply, the savings produced from the investment would provide a 260% payback on the security investment.”
-Isaac Kohen, Contribitor, CSO
This example lays out what is needed to understand your return on investment. Though you may consider many more factors than just this, these formulas can act as a starting point to better understand why this investment matters.
Contact Remote Technology For Your Security Needs
Considering these examples could be key in convincing your administrators to invest in proper security measures for your facility. These examples are just simple scenarios, but Remote Technology can help your business find the best solution for both your budget and your overall security. To see what we can do for you, contact Remote Technology by using the image below.