“We don’t have the budget for that.” Sound familiar?
Alright, let’s get to it. You need a clear, concise narrative that demonstrates the return on investment for your physical security program. We’re not just talking about fending off threats; this is about showing the undeniable financial logic behind every dollar put towards protecting your assets and people.
Budget constraints often put you in the spotlight, requiring you to provide a compelling case for your physical security program. We understand that simply putting numbers in your budget just won’t cut it. You’re going to need to justify spend on every new line item. To help you make your case, we have built a simple return on investment tool to help you think through the sources of value and do a rough quantification of the potential return. This exercise is a rough estimate of the possible return on your investment.
Whether the results are a return of $3.00 to $1.00 or $3.11 to $1.00, the real value in this exercise is to help you clearly communicate the source and magnitude of the value and provide leadership with confidence that you will get that return!
Navigating budgets: Showcasing physical security program ROI
Stakeholders often view security as an expense, but it’s time to change that perspective. Physical security programs don’t just protect premises; it ensures business continuity and safeguards the bottom line. Our comprehensive guide outlines the strategy to communicate this effectively so you’re not perceived as an expenditure but as a strategic investment.
Crafting a compelling narrative for physical security ROI
With economic headwinds impacting every ask on every team, securing budget approvals often means overcoming the perception of security as a mere cost center. To succeed, you have to craft a compelling narrative that outlines the ROI of your physical security program and positions them as essential for your organization’s long-term success. Demonstrating that your program not only safeguards assets but also bolsters business continuity and the financial bottom line is crucial.
So, how do you do that? We’ve got you!
Crunching numbers: Making the case for security spend
Let’s break down how you can translate security expenditure into clear ROI metrics. It’s about the big hits your company avoids and the daily incidents that never escalate because of the systems you’ve diligently put in place. This guide empowers you to leverage data to tell a compelling story of prevention and protection that resonates with the C-suite.
Emphasize the big picture
The role of a corporate security team is multifaceted. You provide protection, instill confidence, and act as a safeguard against catastrophic events. While these contributions are valuable, they can be challenging to quantify. To simplify, focus on the everyday incidents that have a substantial financial impact.
Think in terms of the 80/20 rule. Identify the top three to five incident types that contribute most significantly to losses. Prioritize those where the financial impact is the greatest.
Identify types of losses
For each incident type we have categorized five different forms of losses that you are likely to see in your business.
1. Lost/damaged asset
While not the biggest form of loss, these are often the most numerous as just about every type of incident involves some form of damage to something the business owns.
Incidents like assault, harassment, product counterfeiting or fraud can result in lawsuits.
Many types of incidents can bring the company to the notice of regulators.
4. Lost productivity/downtime
Often tied to lost and/or damaged assets. The cost of not being able to use an asset is almost always a bigger cost than the value of the asset itself. For context, think of the lost productivity from a site shutdown (yikes!).
5. Lost revenue
This can be grouped under lost productivity but in some cases (i.e. counterfeiting, shut down of an ecommerce site) calculating lost revenue is simpler and can be very persuasive.
6. Data Breach
Data breaches usually involve one or more of the above but are worth putting into their own category due to the large costs associated (estimates for the cost of a data breach are in the range of $7 M per breach) and because they are top of mind for most executives.
Gather Crucial Security and Incident Data
Informed decision-making hinges on essential data:
- The number of incidents for each selected type.
- Average losses per incident.
- Once you have entered this into the ROI tool, you will have a measure of your losses per year.
Presenting the data
In this exercise, you are predicting the future, and that can be difficult, especially if you do not have past trends to fall back on. For each incident type, we have provided some examples of how an incident and investigations solution will help you reduce incidents and losses, but quantifying how much you can improve is going to be a bit of a sway.
One way to approach this conversation is to start with the statement, “What would you have to believe to make this a worthwhile investment?” If a 1% reduction in incidents results in a number greatly above your investment, do you need much more information to make this decision?
For this approach we would suggest estimating your savings by thinking about the smallest improvement you believe can be made and see if that matches up to your investment. Given the size of losses that are typical, it does not take much convincing to pay for a software solution.
Making the commitments
The most compelling element of an ROI calculator is the commitment of the person presenting it. To get a return, we need to have impact. Too often, investments are made, and nothing changes. The credibility of your ROI calculation depends on your commitment to driving change. Demonstrate your expertise by:
- Showing that you know the issue (i.e., What are the key incident types? How many do we see? What are the losses associated with each?)
- Offering a proposal on how a software solution will impact each of these incidents.
- An estimate of this impact.
Remember, you don’t need significant savings to justify the investment. Focus on reducing physical security incidents compared to future expectations, and stay modest in your projections.
Beyond the bottom line: Recognizing the soft benefits of strong security
The value of a physical security program encompasses the hard-to-measure, intangible benefits of a secure environment. Confidence among employees, a strong brand image, and the ability to respond effectively to unforeseen events are all part of the equation. While these benefits might not be as easily quantifiable as financial gains, they play a vital role in the overall health and resilience of your organization.
As mentioned, some intangible benefits of implementing a software solution are things like:
- Improving executive protection
- Being more prepared for catastrophic incidents
- Having improved data for better decision-making, just to name a few.
These are tough things to quantify in an ROI exercise, but they make great add-ons. To help drive your point, choose a couple that you feel would be eye-catching for your audience. You don’t want a laundry list. A couple of high-impact benefits are far better than 10 mediocre ones.
Download the guide and lead the change
Ready to turn skeptical glances into nods of approval? Our guide isn’t just a document; it’s your roadmap to securing buy-in for a safer tomorrow. Download it now and kickstart the conversation that leads to a more secure and resilient enterprise.