Justifying The Move To IP For Unbroken Systems?
Our cameras vary from less than a year old IP to more than 10 years old analog. Huge mix. I am looking to justify the move of the old analog to IP in a more than break fix manner.
NOTICE: This comment was moved from an existing discussion: Video Surveillance Infrastructure Life Cycle
Mr. Richardson,
In my own experience, one will NEVER be able to justify to the guys in the mid-levels in charge of finance to pay more for newest Megapixel IP Cameras if they have been able to "live with" the old analog cameras for several years. Comparing IP Megapixel -vs- Analog is comparing apples -vs- oranges, but the accounting guys don't care.
Having said that, I think there are some strategies to get the customer to switch to the newest technology:
1. Ask for permission to set up a FREE DEMO without charge: A basic PC with the VMS software installed, connect one or two Megapixel Cameras to a PoE switch and leave the system recording the potential customers premises and daily activities for 1 or 2 weeks. Save the video and send a complete report with screenshots directly to the General Manager or any of the members of the Board of Directors if it is a big enterprise.
2. The General Manager (or Company Owner if it is a family business) may find ways to approve and justify himself the purchase of Megapixel cameras after they see the quality and sharpness of the videos (the pressure will come from the top down to the mid-level finance people, rather than from the bottom up, as a manager I know use to say):
- The General Mger. can boast about his company having the latest in security to his weekend golf-playing friends and more importantly he may instruct his own marketing department to spread the news to the customers to gain even more customers using the "our-company-is-constantly-investing-for-your-own-benefit-and-security".
- Examples I've met:
1. A storage & logistics company may issue a press release informing that all their customers from now on will receive an extra value that their in transit goods are ultra-safe at the warehouse which is now protected with HD Megapixel cameras that are able to see clearly all the handling process. And this will lead to more customers wanting to use this warehouse's services.
2. The General Manager of a cash transporting company can boast that they have a competing edge in HIGH PERCENTAGE of missing or mis-reported currency amounts complaints solved SUCCESFULLY: because they are able to see clearly each of the stamps that identify the banking institution the stacks of money came from. And of course, also they can see clearly the faces of the employees handling the cash in pretty high resolution, not UGLY pixelated images like the analog cameras.
Hope this helps you with your case !!....
Not to add any more moving parts into the discussion, but I've upgraded several analog systems to IP by helping the customer to think through the primary cameras (important views where image quality is critical) and missing secondary views (nice-to-have cameras, but the first to get cut in a cost/benefit conversation).
Rather than assuming that the old-but-still-working cameras should either be preserved as Primary cameras or tossed, they can be re-located to cover secondary views where their old-fashioned resolution is still 'good enough' (warehouse exits, dumpsters, inside filing rooms or the server room, etc). New IP cameras can be installed to significantly upgrade the image quality of the Primary views once covered by cameras that were once, long ago 'state of the art'.
This conversation gives the customer a prudent way to improve security quality AND coverage, instead of just the same number of better pictures and the off-setting concern about not getting the very last frame out of a fully-depreciated investment. The expansion requires an investment in an encoder or two, and sometimes that conversation goes full 'round to the point that using analogs as secondary cameras are dropped in favor of changing to new IP cameras throughout sooner instead of later.
When relocating the analog, I use Category cabling (with inexpensive video baluns and power pigtails to support the old cameras temporarily), so that that the new location is IP-ready and waiting for the day the old cameras finally expire. For the new IP cameras that replace the current analog, most of the time the locations can be re-cabled at a lower cost than employing Ethernet-over-coax converters.
Measure the Risk for each camera in a honest manner. What would the consequences be with the old analog cameras? Is it worth the risk?
I think that's a good question but are there going to be many camera locations where the risk is that significant?
I could see if you had repeated incidents in front of certain cameras where the video failed to provide critical details but besides that, what else would you do?
John, that is kind of the point. When I said honest manner, I was referring more to being honest about weighing the risk even if it meant the risk was low. If the risk is low, then do not try to sell it to upper management with puffery because upper management can see the puffery. If it truly is low, then save your budget. If the risk is high, you have something to sell upper management and, truthfully, you need to protect your own butt if the risk is high. If you get no budget, then you seriously need to think about moving on from that company or document all the "not approved" notifications if you gave upper management a high risk notification. If a risk does happen, your name and face could be plastered all over CNN & Fox and you will be the company scapegoat.
About 4 years ago, I went to a meeting/seminar (ISC West) that had Ray Bernard speaking about the Risk Management perspective about physical security. His talk on measuring risk was very refreshing to hear. At the time, it was different than what was being promoted by manufactuers and various sales teams. Measuring risk seems like a no brainer when it comes to physical security. Do insurance companies measure risk before handing out a plan?
Is risk management still not something the physical security industry takes seriously from an education standpoint? If not, it should.
I think doing an actual risk management analysis is valuable, but, in fairness, most video surveillance deals are sold without one.
But let's say we have an end user who demands to do a risk management analysis. He knows the cost for new IP is (let's just estimate) $500 more per camera. How do you mathematically justify that $500 cost increase relative to risks involved? Do you show them how it reduces probably loss over a 5 year period of $600? What do you do specifically?
Sign up for his seminar:)
You have to come up with a formula to weigh how important this view is, in what detail and what needs to be accomplished with this view. If you do not know these things, then how do you sell to upper management that you need a budget?
How much will it cost a company if they failed to take action on a known risk? More than $500
"How much will it cost a company if they failed to take action on a known risk?"
That's more salesmanship than risk management :)
My experience with risk management is that a potential loss is estimated (say $10,000), a probability is assigned to that loss (i.e., likelihood that it happens in a given time frame - 10%, .01% etc.). Then you assess what impact a countermeasure would have on the loss / probability.
I want to see this applied to an IP camera.
Listen, let me email Ray and ask him to respond :)
AS already stated, having upper management able to compare megapixel vs analog technology in the same high-risk setting onsite does wonders to change opinion.
As also stated, pressure must come from the top down!
If this doesn't do it for you, they are wasting you're time! Move on to the next one. They'll call you back when they are ready.
Richard, what if the end user wants a business case - some real measured ROI - beyond that the pictures are prettier / better. What do you do?
To be fair I will share some more info about our CCTV needs. I run a system that is on a state university campus in a major metropolitian area. 4 years ago it was somewhat consolidated under a single VMS and that is owned/monitored by our Public Safety Department.
I am not selling to customers other than areas within our campus. I am just trying to deal with a money person that understands things in "refresh cycles" and not in a technology benefit vs cost kind of way. I like the "temp set up and show them" idea and may us that for bring on board other departments and schools here but I need to get a handle on a reasonable replacement cycle other than "Break/Fix".
I have been able to get all parties to agree that broken cameras are to be updated to IP. But in order to get budgeting for large upgrades I need to have some measure of documentation to back up my purposed refresh recommendations.
thanks for all the input.
Mr. Richardson,
It appears to me that you would be best getting some real data from your peers in other universities. At least you're talking similar situations in the same language.
Juan, I feel your pain having worked in the California State University system for many years. I'm curious what's in it for YOU to move these cameras from analog to IP? I assume to better serve your on-campus stakeholders. So you'd need to make a case that it will save you time and presumably money. But the math might not go in your favor there.
Another approach would be to find new benefits and applications of IP video for your stakeholders beyond security. When video is eas(ier) to access and higher quality new users and uses can be found. The trick here is to avoid setting up false expectations and building an overly complex solution. And funding would still be an issue unless your stakeholders are able to chip in out of their budgets.
CCTV System Return on Investment Calculator Example:
If:
- Gross Annual Sales: $3,000,000
- Net Profit Margin: 15%
- Security Investment: $50,000
- % of Crime you can prevent: 95%
Then:
- Your Bottom Line: $450,000
- Your Estimated Annual Loss: $67,200
- % of Bottom Line: 14.93%
- Annual savings from investment: $63,840
- Months to repayment: 9.4
- Return on investment: 128% (assumes no business growth)
- Net Profit: $28,840 (after security investment & loss prevention)
* Based on our experience and customer feedback, it is safe to assume that 25% of retail loss can be prevented by the typical video security system. Please enter a number that feels comfortable to you.
Regarding the calculator, there's some very BIG assumptions baked in:
- This is really for retail, assuming that you have measurable shrink / loss / theft. In other applications, these numbers are less significant or meaningful. For example, our case here of a university.
- This is for video surveillance, in general, not specifically for moving from analog to IP. You'd have to modify this calculation to only factor in the % of crimes that an IP system stops versus an analog one.
- Your calculation assumes preventing 95% of crimes, which is, to say the least, optimisitic...
For those interested in calculation, see our ROI For Video Surveillance Made Easy
John, do you really think an ROI comes into play for a university? There is no priece on "life" which unfortunately is the risk of 'these times' from a selling point of view in this application. When it comes to assets, they are generally insured and this goes accross the board for every market.
I'm guessing that today when anyone talks about the addition of surveillance, that probably over 50% (my experience) are doing so to help protect 'people' first and assets or liability second.
Public opinion is probably close to the point of expecting universities to be adequately secured. Arguably this could present a liability issue for a university that is not adequately secured given the unfortunate campus events of late and which have generated huge media debates.
Regarding surveillance on campus; imo the question should not be "how much does it cost?" but rather "is it as good as it should be?"
...the addition of surveillance, that probably over 50% (my experience) are doing so to help protect 'people' first and assets or liability second... Arguably this could present a liability issue for a university that is not adequately secured...
IMHO, If it's a homeowner buying a system to protect their family, then that is first and foremost people protection. If it's a corporation protecting mainly abstract people (students, spectators, bystanders) then it's more likely asset protection; there is probably a hidden, gut-ROI determining how much to spend vs. the potential liability, otherwise how would the corporation know when there is enough security in place?
Surely if they feared the loss of even an unknown person as if it was a family member, they would have a hard time drawing the line on spending, like a homeowner might.
John, do you really think an ROI comes into play for a university? There is no priece on "life"
Richard, you are quite the salesmen!
I am responding specifically to Juan, a university end user, who is dealing with a 'money person' and needs to justify it with more than appeal to emotions.
Gentlemen:
The transition from Analog to IP is broad; so far only improved video is being discussed. IP brings something else to the table which does increase the RIO; remote access. Choosing the right camera for the job is very important to provide quality video and adequate coverage, but selecting a camera that you can log into and adjust focus, brightness and program multiple views from the same camera is priceless. With the exception of the camera being physically damaged there is very little that can’t be accomplished from an office. The savings from serviceability should be part of the selling point to management.
Donna
"Selecting a camera that you can log into and adjust focus, brightness and program multiple views from the same camera is priceless."
It's not literally priceless, right? Unless this is a credit card commercial :)
The question becomes, how much is that worth? Per camera? Over the course of its lifetime?
Can you justify eliminating X number of truck rolls at Y cost per deployment?
Anyone care to make a specific case on this?
And to play's devil's advocate, do we need to factor in that IP cameras have greater serviceability costs (firmware upgrades, disconnecting from VMSes, etc.)?
Not a credit card commerical. But firmware can be updated remotely and most service that would require a field technician can be accomplished remotely. The cost to install an analog camera from scratch compared to an IP camera is the same (wire and conduit); the IP cameras if in the field will require switches or fiber media converters. We designed a field enclosure for this purpose to provide power, cable management and a hardened switch to drop at specific locations. If you want to reuse your coax (which we did in elevators) there are converters with lifetime warrantees. We have almost 5000 cameras in our system, we wouldn't be able to manage them if problems couldn't be resolved remotely. The analog system is still up and running until all new cameras are deployed. The VMS and storage are running on Pivot3s and this has worked out extremely well. The police agencies love the clarity during investigations.
Donna
Donna, again, let me ask: do you have specific numbers?
How much is remote access for servicing IP cameras worth? Per camera? Over the course of its lifetime? Can you justify eliminating X number of truck rolls at Y cost per deployment?
I am sure you are happy with your system, but that's not the question of this discussion.
Juan needs to justify to a money person why spending a premium on IP cameras now is worth it.
So let's say the MP IP camera costs $500, to use a ballpark number. How can we show more than $500 worth of value generated from that investment?
With a system with 2000 cameras, service staff average $30, for safety purposes they travel in pairs and the average serivce call from office to return takes four hours. A basic service call would cost $240. If annually 50% of cameras needed to be touched $140,000 would be expended to service cameras. If this number can be reduced to 25% because cameras can be cycled, refocused and field of view adjusted, you've just saved $70,000. Now if 10% of your cameras require lifts to preform service and lift daily rental run $600 a pop and two extra service staff, the first time the camera is adjusted from the SOC will pay for the camera.
Donna
In what reality do 50% of cameras need to be refocused yearly?
Donna said 'touched' not 'refocused' but still 50% per year seems really high.
That being said, their application / environment is far more costly / extreme one to service than a university or an office building, etc.
Btw, even if you can eliminate 500 trips per year (out of a 2000 camera base), that works out to be an average annual savings per camera of $60 (assuming $240 cost per trip).
Math is as follows:
Original: 1000 trips (50% of cameras) x $240 = $240,000
New / IP: 500 trips (25% of cameras) x $240 = $120,000
Savings per Camera Per Year: $120,000 saved annual / 2,000 cameras = $60
This underlines how hard it is to build a business case focused on service costs, even assuming fairly extreme conditions / service trips.
because cameras can be cycled, refocused and field of view adjusted...
Can we count on remote focus existing on our IP camera without increasing the estimate of the cost of the camera?
How does one remotely change FOV, by remote Zoom? Or camera-side sensor cropping? (Not the same as adjusting a vari-focal in the field), or do you mean some other way?
Cycling defintely possible, and necessary, but isn't power cycling of analog cameras far less common the IP cameras? And sometimes IP cameras don't respond at all, so all must be POE cameras with managed switch?
That is a selling point, but it is lined with puffery and upper management will sniff that out. That selling point is from Marketing and has been around since the beginning years of IP cameras.
This person needs to sell to upper management, not just give them a common brochure or flyer.
Does upper management really care what an analog camera picture looks like compared to an IP camera? The answer is no. They care about a job being done properly and managed budgets. They need to see measurements and the correct value as associated with that measurement.
Would upper management approve 350 new license updates for 2014 MS Excel from MS 2008 Excel? Would you hand them 2 brochures? Or go in there comparing them side by side to upper management? The answer is no, upper management knows it is your job for the vetting process. They would want to see what you concluded after rigorous research.
Seriously it cost the transit authority much more than this if a camera is on the right-of-way because the tracks need to be shut down during service. This involves multiple departments and planning whichs drives the cost of repair. The ability to trouble shoot a camera prior to dispatching a technician helps manage manpower. Many times the problem can be totally resolved saving the cost of the dispatched service personel.
I think we are derailing on the topic here. So far I am gathering that there is no industry standard for the life cycle of any camera other than the manufactures statements( which we all know are accurate...wink wink). I can come up with a reasonable time frame for replacement on my own but wanted a document or report to back it up.
Thanks for the effort all.
Juan, What does your money guy want specifically? What would enable him to approve spending on new IP cameras?
A statement from an organization saying "security cameras must be replaced after X years." I am struggling to understand what would get him to sign off.
Those analog cameras, that you stated are 10+ years old, should be labeled as "Sunset", which you have basically done already. Yet if they are still working, then they are still part of the life cycle. When they die and are labled as "Sunset", then "Sunrise" would replace that model.
In my opinion, the only way to convince a purchaser to replace all analog cameras, that are still active, is to come up with other ways, like service dollars, picture quality, and risk (Above comments). Those cameras are over 10 years old. The predictable life cycle for them is long over. They could go anytime or be like the Mars Rover.
tell them that video analytics can be used to send an instant alarm when there's an event, instead of paying security guards/contractors for (not) monitoring the cameras 7/24.
You can do video analytics with analog as there are many encoders and server based analytics available.
yes but encoder + server would cost near as much as an IP camera with built-in analytics.
No, for equivalent performance / quality analytics, it is close in price, if not the same.
And here I am talking professional grade video analytics (VideoIQ, ioimage, agent vi, etc.). You can get built-in low end motion detection+ in cameras (and recorders) but neither of those has any chance of replacing guards.
This is the type of statement that sounds like pufferry to upper management.
Why would many (all existing analog locations) cameras need analytics with instant alarm?
Brochure information is not what upper management needs for large $ amount approvals.
How much does it cost for false alarms?
You have to sell to help solve a problem and/or have an end users self-interest in mind.
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