ROI of Video Surveillance Made Easy

Author: John Honovich, Published on Jul 25, 2012

"It's just an expense" and "it's a damn cost center" are two big negative perceptions that make it hard to justify purchasing surveillance systems. To overcome this, often buyers want to prove the Return on Investment (ROI) of a system. In this note, we examine the easiest way to do this analysis, looking at examples of breaking down cost and estimating returns.

Many Ways

Financial analysis offers many methods of calculating return on investment (DCF, IRR, breakeven period, etc.). Typically, though, surveillance buyers, even if they use a financial metric, use simple ones. While they lack the accuracy of the more powerful ones, they are easier to calculate and explain.

"**'* **** ** *******" *** "**'* * **** **** ******" are *** *** ******** *********** **** **** ** **** ** justify ********** ************ *******. ** ******** ****, ***** ****** **** to ***** *** ****** ** ********** (***) ** * ******. In **** ****, ** ******* *** ******* *** ** ** this ********, ******* ** ******** ** ******** **** **** *** estimating *******.

Many ****

********* ******** ****** **** ******* ** *********** ****** ** ********** (DCF, ***, ********* ******, ***.). *********, ******, ************ ******, **** if **** *** * ********* ******, *** ****** ****. ***** they **** *** ******** ** *** **** ******** ****, **** are ****** ** ********* *** *******.

[***************]

Key **********

*** ** ****, ******, ******* *** **********:

  • *****: *** **** **** *** ******* (** *** **** *** surveillance ******) ****?
  • ******: *** **** **** *** ******* ******? **** *****, **** is ******* (*.*., * ******* **** * ******* ******* *** then *** **** * ********* ** ******* ** *** **** few *****). *******, ** ************, **** ***** **** ***** ** the **** ** **** ******* (*.*., * ******* **** * surveillance ****** *** ********** ** *** ****** **** *** **** few *****).

Returns ** *****

** *** **** ****** *****, *** ******* **** ** ** more **** *** ***** **** * ********** **** ****** (******* a ****** ** ***** - *, *, * ***.). *** example, * ******* **** **** $*,*** *** *** **** ********* to ****** $*,*** **** * ***** ***** ****** ********* ** rejected.

*******, *** ************ *** ******* **** *******, **** ********* ******* having ** ** *** ******* **** ****. **** ** ** for *** *******:

  • ****: ********* ******* *** **** ********* *** *** *** ** met ** ********** ****** ** *** ********* *** *** ****, etc.
  • ****: ***** ** *** ****** ** ***** **** **** ***** now. ** * ******* *** $** ** ** ***** **** is ***** * *** **** **** ** * **** *** $10 *****.

***** ** ******* ** *** ******* *** ******** ********, * project *** **** ** ****** ********* ** *** **** ** be *********.

Using *** ****** ******

* ****** *** ** ********* *** ** ************ ** ** estimate * **** *** ***** (*.*., ****** *** ***** **** of *** ****** ** *** ****** ** ****** *** **** to **** **). *** ********, ***'* *** *** *** ******** a ** ****** ************ ****** **** ***** $**,*** *** **** last * ***** (** ******). *** **** *** **** ****** per ***** ** $*** ($**,***/**).

*** **** ** ****** ******, ** *** *** ******* *******/****** of **** **** $*** (** $***) *** *****, *** *** build * ****** ****** **** *** *** ******.

Estimating ******* / ******

*** **** ********* ** ************ **** ** ********** *** **** cost ******* ** ******* *** **** *******. ******** **** **** into * ***** **** ****:

  • *******: **** ******** ** ****** **** *** ************ ****** *****? Make * **** ** **** **** ** *********** *********, *****-***, vandalism, *** ******, ***** *****, ******** ******, ***.
  • **** *** ********: ******** *** **** **** ******** *****. *** *******, $*** for ***********, $*** *** *********, $*** *** ***** *****, ***. Typically **** **** ** * ***** **** **** ** *** end **** **********.
  • ********* ** ********: ***** *** ***** **** ******** ******. *** *******, ** it **** *** ****, ***** *** *****, ***** ***** *** year, ***.
  • ****** ** ************ ******: ******** *** **** ********* *** ************ ****** **** *******. For *******, **** ** ****** *** *********** ***** *** **** or *** *****?

******* **** ********, *** ****** **** (*) * ******, (*) a **** *** ******** *** (*) ** ******. *** *******, shoplifting ***** $*** *** ******** *** *** ******** *** ** reduced *** **** **** * *** ************ ******. ** * monthly *****, **** ***** $***+ ******/****** *** ***** ($*** *** incident * * *** ***** *******).

** *** *** ***** ********* *******/****** **** *** ** *** the ******* *** ***** ********* ******.

**********

**** *** **** **** ***** *** ***** *** **** ********* savings *** ***** *** *** ******* *** ****** ** **********.

***'* *** ** **** * ******* ***** **** ** ******* costing $**,*** **** ** ******* **** ********* * *********** ******** per **** **** ***** $*** *** ******** (***** *** *** numbers ** **** **** ***** **********). ****'* *** ********:

  • *******/******: $***+ *** ***** (***** ** ******* ***********)
  • ****: $*** *** ***** (***** ** $**,*** **** ** ******)

** **** *******, *** ****** ***** ****** ******* ** ** more **** ***** *** ********* *****.

*** *** *** **** ******* ** ******* ****** *** *** explain *** ********* ** *******. *** *** *** *** ********* savings (**** ********* ********, ******* ****** *****, ***.) *** ******* systems (*******, **** *********, ***.).

Rare *** ****** *****

***** *** ***** ****** ***** **** *** ****** ******** ***** (shoplifting, ******, *********, ***.), ** ***** ****** **** **** *** more ********* ******** *****. *** ********, **** ***** ***** ****** systems ********* ** ********* ** **** ************ - ******* ** is * **** ****** ** **** *********, * ***** ****** trying ** **** *********, * ******* ****** ** **** ***** plants **** ***** ***** **, ***. **** ***** *****, *** probability ** ** **** **** ********** * ****** ** **** difficult. ***** *** **** *** ** ****** ** *********, *** frequency ** ** ******** ** ****** ********** ** *********. ** it **** ***** ** *****, ***** *** *****, ***** **** years? ********* ** **** *** ******, *** '***' **** ****** dramatically.

**** **** **** *** ****** *****, ******* ******** ******** ** driven ** **********, ********* ****** *** ********* ****** ****** **** ROI *************. *** ********** *** ******* * ******* ***** ** security ** ******* * ******* ** ****** ************* ****** *** security. ******* ***********, ******* *** **** *** **** ** ****** occur (*.*., *** ********** ** ******** ******** ** *** ** before */**, ***** */** *** *****). *** ************** *** ********* not **** ********** ** **** *************.

Disclaimers / *******

*** *** ***********, **** *** **** *************, *** **** *** than *******. *** ******* **** ** ********** *******/*******. ***** ****** will **** **** ** **** *********** ****** (*.*., ** *** system ******** *** ******, ** **** *** *** ******) ** bump ** *** ****** ** ********* *** ****** **** ****** (e.g., ****************** ********** **** * *********** ********* **** ** ******* per ****, ******* ** **** *** *** *****, ***.). ****** that, ** ** ***** **** ** ******* *** ******* ** surveillance ******* ** ***, ********** **** ******** ************ (*.*., ***** analytics, ****, ***.)

* **** *** ** *********** **** ********* *** ****** **** heuristic, ******* ** ****** *** ** *** ************. ***** *** mechanics *** **** ******* *** ** * ****** *** ** factoring ** *** *****, **** **** ***** *******, *** *** issue ******* ** ********** *** ********* ******* ** ******. *** CFO **** ********* **** ** **** *** *** ************ ****** works ** *** ****** *** ****** **** ******** ***** ******** or *********** ********. ** ********** ** *** *** *********, *** key ********* **** ****** ** ********** *** ********* ****** (*******) of *** ******.

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