Budgeting challenges troubling physical security customers in 2023

For physical security customers, the outlook for 2023 is not great. Reports from financial analysts, institutions like the world bank, and even individual company earnings forecasts worldwide point to a year of slow growth that mandates stringent cost-cutting. How would you ensure physical security, which many companies consider an expense, get the funds necessary to do their job?
 
“When budgeting for security, customers may struggle with buy-in from upper management because they may not understand the purpose of the approach or the value of the investment,” explains AJ Frazer, Chief Revenue Officer of Irisity. “It’s important to map out the long-term value of any investments or changes in your program and be able to articulate these points to your leadership team.”
 
Although security is deemed mission-critical by most organizations today, it’s important to be able to sell the value of your ideas. Unfortunately, this is not the only challenge that security departments face.

Justifying the overhead

Because security doesn’t contribute directly to an organization’s primary mission, it’s typically budgeted reluctantly from what remains after other efforts are funded. The biggest challenge in developing a security budget is justifying the overhead of protecting the mission.
 
“We all know how to place value on a loss the business has suffered, but it’s impossible to place a value on a system that prevents an event that never happened,” said Glenn Adair, A&E Development Manager at i-PRO Americas. “The growing use of analytics that makes the data captured by security systems valuable to the organization in other ways may help change that. For now, when budgeting for security, organizations have to accept more risk than they would like and hope that nothing happens.”
 
The major challenge is in finding the right balance of budget going to the primary mission and making sure what’s left over for security addresses the identified risks at an acceptable level.

Projecting costs of overlapping projects

As security systems become more interconnected, different departments including operations and IT, increasingly need to collaborate. Projecting the costs of systems used across the organization is often difficult.
 
“Communication and cross-department teams that clearly understand how the benefits of security systems go beyond the traditional boundaries of a single department can help get the funding needed to truly maximize the value out of their investment,” explains David Chauvin, Director of Professional Services at Genetec. 

Deciding what to buy

One of the main challenges that customers will likely face when planning their security budget is deciding which solution best suits their needs and which solutions might have unforeseen drawbacks.
 
“For example, some services might have top-of-the-line access control services and technology but lack any meaningful intrusion detection solution,” explains Jeff Ross, Director of Marketing, ACRE. “In situations such as this, customers might find themselves struggling to make a decision as to which aspect of their security they should prioritize, as a secondary solution may not be viable to their budget.”  
 
Justin Wilmas, President of Netwatch North America, agrees with this adding that customers often find themselves facing is trying to predict which solutions are best suited to businesses of their size.
 
“Large organizations need to assess their investment in enterprise-wide solutions as well as look at the cost of adding more guards,” Wilmas said. “Smaller businesses with budget constraints normally invest in traditional reactive solutions because that’s all they can afford. Now, with solutions like proactive video monitoring, they can invest in an "as a service" solution that allows them to have the best of both worlds, technology, and virtual guard services.” 
 
Making things complicated is the fact that some security products aren't designed to last more than five years, according to Robert Wall, CTO of Edge360. Often this isn't discussed when buying decisions are made.
 
“It is difficult to keep these antiquated systems safe and secure due to a lack or delay of security updates plus the costs of administrators having to manually install patches in the field,” Wall said. “It's time for companies to consider modernizing their security systems with something that will last them many years and support easy automatic upgrades and expansions. Security programs are a marathon, not a sprint.” 
 
Finally, ensuring you have the right people to make the most of the solutions you purchase can also be a challenge. Only with proper expertise can companies optimize the use of resources and drive maximum value from their investments.
 
“The challenge would not just be the ability to acquire the proper operational funding in order to purchase and replace traditional hardware, but also to ensure that the organization has access to the expertise they need to reduce the consumption gap as much as possible by getting the most out of their systems,” Chauvin explained.

Silver lining: more companies recognize security needs  

Although security continues to remain an expense for many companies, we’ve come a long way from the days of reactive devices. More and more senior leadership now see physical security as a critical function, according to Eric Olson, Product Marketing Manager at Arcules. 
 
“The C-suite’s focus on risk mitigation and compliance has driven this change,” Olson said. “Purchases related to security measures, both physical and cyber, and automated functions are a high priority for the C-suite, as is proactive security planning and procurement.”  
 
Olson added that he expects security leaders to gain buy-in for legacy equipment upgrades this year to mitigate risks better. SaaS-based services are in demand because they reduce the complexity found with on-premises systems. Additionally, cloud services provide more flexibility to scale up and down as business requirements change. Solutions that allow businesses to modify their infrastructure in an uncertain world are gaining significant attention from senior management. 

Final word

Experts point out several budgeting challenges for physical security departments, but the most significant among them is predicting and justifying the costs. Fortunately, company managements are increasingly seeing the value of physical security solutions. With more awareness about technologies like AI and analytics, we can hope this trend continues.