Business Benchmarks
Any business must have a long-term objective, then assess how it's doing against key performance indicators. While the product cycle of security means unit sales may not be the best benchmark, sales figures and other data provide valuable insight into a company's health. “There are a lot of things we measure well before measuring revenue,” Broomhead said. “We conduct surveys, talking to integrators who integrate and deploy our product. They are delivering on that value proposition.”
Idteck looks at sales by product categories and location. Its overseas sales make up 70 percent of its turnover.“We divide by product categories: Biometrics, readers and cards, and control panels,” Park said. “To be a total system provider, we need to have all categories of products.”
Numbers present objective information on whether a company is on track. “Typical financial measures include sales, operating income and operating margin ; return on capital employed and operating cash flow, with stated targets such as achieving 10 percent annual growth and an operating margin of 16 to 17 percent,” Wiesenfeld said. Assa Abloy achieves its targets through organic and acquired growth, which respectively were 5 percent and 20 percent in 2010. It also invents in R&D, employing more than 1,000 engineers.
Inside product segment sales, more specific performance indicators can be implemented. “For example, in the context of fire detection or intrusion systems, false alarms could be such an important performance indicator,” van Iperen said. “Of course, we also continuously gather and examine the feedback from our customers and our staff in all markets.”
Security is not an industry for those out to make a quick buck. A solid product portfolio needs to be backed by a trustworthy reputation and proof that the solution works reliably. It is important to understand trends, but security focuses less on what's in vogue. A good security business should take stock of financial data and customer demand, but never loses sight of its vision to keep people safe.