What elements in the larger economic climate have the greatest impact on security purchases? How are people responding to these changes?
With economic ups and downs, the global population finds itself responding and adapting in different ways to these changes.
There is no doubt that changes in the economy will lead to changes in buying practices across all industries, and the security industry is by no means an exception to this. In times of economic growth, individuals and organisations will be more inclined to "splash the extra cash" on the best of the best. Whether it be deploying several new surveillance cameras in an existing security system, implementing the latest security technologies in an access control and intrusion detection system, or adding additional layers of security and authentication to a solution which is already in place, there are several "luxury" or "additional features" which can be implemented into an existing security system but might be described as add-ons. They make the system better, but a base system is required, and it can be argued that they wouldn't work without this base system. In times of economic low, people's approaches change. Everyone becomes more concerned and stringent about spending money. Budgets are tighter and often, fewer and smaller-scale purchases are made. Let's see what some of our panellists have to say about security purchasing decisions made in the light of economic climate change.
Today’s economic climate has an impact on all aspects of an organization, including security purchases. Security managers are not immune from the need to weigh budgets and performance demands. However emerging technology may prove to be the element that has the greatest impact in this area. When you consider that no one wants to compromise security the burden shifts from simply meeting a budget, to demonstrating the greatest return. The advent of improved analytics, the flexibility that comes with improved resolution, and feature sets in VMS mean that the security spend can be shown to be an investment, not just a line item cost. It may seem like a distinction of syntax alone, but can be enough to insulate the security budget when the economy gets tough.
Mass media commentators have probably used one word most since the crash of 2008. For several years it was by preceded by “collapse in…” and more recently it morphed into “growing…”. That word is “confidence”. Naturally, when buyers are hunkered down with their cash bags gripped tightly and a strategy of basic survival they need, at the very least, an overwhelmingly strong ROI case for new purchases. As discussed in an earlier panel question, for security purchases, ROI can be particularly vague. In the few cases when ROI is believed, or simply ignored for other reasons, in the absence of cash the buyer needs a credit arrangement. The turmoil in the banking world made this scarce or, at best, expensive and likely to undermine the ROI argument. With credit and confidence improving a little in recent years we can expect to see security purchasing policies develop.
Today, there is actually a price on safety, ranging from lower insurance premiums to potential costs of mitigation. Vehicle attack is a harsh reality in our modern society and public gatherings must be considered to be potential terrorist targets. Keeping retail shoppers safe, shielding structures from accidental or intentional automobile crashes, protecting hotel patrons from suicide car bombers, and keeping employees and visitors from harm have always been a concern…today more so than ever. From pedestrian-filled farmers markets and universities to new and used car lots, a wide variety of agencies find peace of mind through the use of barriers, bollards, barricades and crash gates for vehicle-based physical access control at the perimeter. For those areas where a vehicle will never enter, fixed bollards and barriers are the norm. However, at entrances, barriers that go up and down are needed to let authorised vehicles through.
Whether the economic climate is in growth or decline, demand for surveillance / CCTV systems continues to increase. There are some exceptions with bespoke solutions, for example in the construction industry which typically sees a decline in a downturn, but the general trend remains steady growth. An economic downturn can create an increase in security risks, due to social unrest and increased crime. As a result, businesses are automating systems over increasing security staff and guards. At the same time, the advent of ‘big data’ and the ability to analyse surveillance footage means businesses are finding new ways to increase efficiency. Retailers can analyse footfall patterns through surveillance footage, optimising store lay out as well as deterring theft. Selecting the right drive for these applications is critical. Purpose-built surveillance drives cost only slightly more than desktop equivalents, yet deliver higher capacity, consume less energy, generate less heat, and are specifically designed to handle 24/7 workloads.
So what does the security buying landscape look like in the light of economic climate change? As we see from our panellists' responses, budgets are clearly tighter. However, As Henk points out, this doesn't cause the demand for security systems to wane. Therefore, people look for solutions which are going to last longer. This isn't to say that this isn't a concern in times when the economy is doing well, but people become even more concerned with return on investment when there's an economic collapse. People put more effort into looking for solutions that are robust and can provide more (coverage) with less. As Greg mentioned, there is indeed a price on safety these days and Dave shrewdly highlights the importance of weighing up the budget and performance of a security system. This is when people start looking at their security purchases as investments more than ever before.
Simon mentions confidence. Buyers want to be confident that what they purchase will be the right fit for their needs and will be reliable as well. As Dave points out, new technologies are helping facilitate this and are providing end users with more options to be able to meet their security needs in the light of economic climate change.