Allocating and optimizing security resources is a challenge for every organization dealing with security in multiple brick-and-mortar locations, as well as for employees working in the field or ‘on the go.’ It’s not as simple as dividing the total corporate security budget evenly by the number of locations or facilities. Instead, the objective is to allocate security resources according to the actual level of crime risk at each locale.
Many companies start with a baseline level of security that is the same across sites, then adjust the security countermeasures at each location as security incidents occur. This security budget strategy may only be effective for a period of time. As your organization grows in size, and your security risks evolve, so must the process used to determine your security resource allocation and security budget.
How do you go about developing effective strategies to optimize your security budget? How do you avoid wasting money by spending on security where it isn’t needed?
Major Budgeting Mistakes to Avoid
Start by recognizing the two biggest errors companies make in allocating security resources:
Mistake #1: Subjective Security Decisions
While you might have a good idea of which location is “safer” than another, you need to leverage objective data about loss and risk to justify these decisions. Hunches and gut reactions, even when based on years of experience, might not lead to the ideal deployment of resources.
Mistake #2: After-the-fact Budgeting
When an incident occurs, the tendency may be to react by moving security resources to that specific site to prevent a recurrence. But, how can you know if the incident was a one-off or part of a larger pattern? The smarter move: proactively use detailed data when budgeting to avoid deploying more resources than necessary.
For example, let’s say an incident happened years ago and changes in security staffing hastily resulted. Did those changes ever get the appropriate follow-up? If that decision isn’t revisited to determine whether the measures were effective, you may have spent a significant amount of money for increased security at a site that didn’t need it.
The Risks of a “Bad Budget”
If resources are not allocated properly, you risk the potential for numerous serious negative consequences, as well as potentially impacting your bottom line.
Damage to your people and brand
An incident could cause immediate physical, emotional, or financial harm to your employees and customers. This damage could also have ongoing repercussions for your company. If an incident was preventable, for instance, you might face a lawsuit for inadequate security.
Aside from harming people, you also risk damage to your brand’s reputation. Customers make decisions based on safety perceptions. They will visit your locations — or stay away — based on how safe and secure they feel. When they feel unsafe, either from a security incident or improper resource allocation, your brand can take the hit.
Damage to your bottom line
Calculating the bottom line has two sides: expenditures and revenue. Bad budgeting can have a negative effect on both. You can lose money by failing to spend it where it will prevent crime and loss, and waste money on unnecessary security products and services.
For example, a location that isn’t protected properly against robbery can have financial repercussions beyond just lost revenue from stolen items or property damage. Customers may not feel safe and stay away from that facility, leading to further financial loss. Plus, fairly or not, an entire chain’s reputation could suffer because of something that happened at a single site.
Making a profit also depends on minimizing non-essential expenditures. When you spend too much on resources that aren’t needed, such as increased security at a location that isn’t actually unsafe, you’re throwing money away.
Loss of future resources
In the corporate world, all decisions are subject to a cost-benefit analysis. Whether big or small, your budget needs to be used in a way that optimizes security resources and maximizes the company’s return on its investment.
The C-suite knows this. If you can’t justify the ROI of your security expenses to leadership, your budget could shrink in future years. This creates a downward spiral in which your resources are spread increasingly thin, and your job becomes increasingly difficult.
Optimize Your Security Budget
If you’re operating multiple brick-and-mortar locations and/or have employees on the move constantly, an “It’s always been done this way” is not an effective strategy to determine your security budget. Switch to a data-driven budgeting approach that provides a quantifiable ROI to make the best use of your security budget and impress your leadership team.
Start with up-to-date, objective crime risk data, like CAP Index’s CRIMECAST Data and Reports. Look at each of your locations individually — external crime risk is different from area to area and site to site, which can help dictate what resources a specific location needs. Then, repeat the process as necessary. Data analysis isn’t a one-and-done deal. Best practice calls for you to reassess your risks annually, during the period when budgets are set.
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CAP Reports are critical to my risk assessments. They have enabled us to take a more surgical approach to investing in our stores that need it the most.
Senior Manager of Asset Protection
Five Below, Inc.
CAP Index is the first tool I turn to when time is of the essence. I can always depend on CAP Index to provide me qualified crime information within a very few minutes that I feel comfortable reviewing with the C-Suite.
Stephen A. Brown, CPP
Director, Corporate Security / Facility Security Officer
Burns & McDonnell
CAP Index data is a vital part of our security decision-making process.
Keith McGlen, CPP, CHPA
Associate Vice President
System Security Services
Memorial Hermann Health System
CRIMECAST® Reports have helped our organization for many years to proactively assess the particular risk for crime surrounding our facilities. The CAP Index® CRIMECSAST Platform is an easy-to-use online service that provides us with the flexibility to share and decentralize crime risk data within our North America business units.
Carlos J. Cortez,
Manager, Global Security Programs,
Kraft Foods, Inc. / Mondelez International
Our property selectors are not discouraged from a site just because it receives a high score. What we do is issue every store – all of them – a security classification. The classification determines how we allocate our security resources to that store.
CAP Index's online platform, CRIMECAST, is great. It is easy to use and quick!
Bank of America
In industries where there is high public contact and a customer is coming to our location (such as retail), why would you leave it to chance when planning security when there is an easy, affordable tool? When investing a million dollars on a location, what is this small charge compared to what it may cost you when you get sued?
CAP Index assessments are a must for anyone engaged in asset protection. The new website is much improved and as important, easy to navigate.
The Williams Companies
We have been using CAP Index for a few years and include it in our security vulnerability assessments. Highly recommend it.
Director, Protective Services
Nationwide Children's Hospital