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Mastering the balance: TCO and ROI in perimeter security systems

Mastering the balance: TCO and ROI in perimeter security systems
On identifying three essential elements during the design phase for both the systems integrator and the end user.
To accurately calculate the ROI of a perimeter security system and establish a convincing investment case, a thorough risk assessment of the region is required. All parties involved, including control room operators, patrolling officers, security and facility managers, must have their demands thoroughly understood. This allows us to accurately depict the Total Cost of Ownership (TCO) of a proposed solution, providing light on its true long-term cost.

Jamie Barnfield, Senior Sales Director at IDIS Europe, spoke with on the significance of identifying three essential elements during the design phase for both the systems integrator and the end user. This methodology promotes an ideal balance by connecting user needs with system functionality and the necessary level of protection. The goal is to efficiently manage risk without incurring needless costs.

Balancing costs and benefits

To get best cost-benefit balance, it’s important to drill down into TCO, and understand the true price of a potential solution. In some cases, costs aren’t obvious.

“As an exercise, calculating TCO also has other benefits,” Barnfield said. “If done properly, a TCO analysis tells you more than just what a particular solution costs; it also prompts a better analysis of system functionality and performance, and a clearer view of strengths and weaknesses.”

To break this down, TCO comprises three elements: the upfront cost of hardware, software, and installation fees (i.e. including initial CAPEX cost), the cost to operate and use the system, plus the cost to maintain it (i.e. ongoing OPEX costs). A classic error is to focus solely on the first of these, and to not plan for the subsequent two.

“It’s obvious that a single-source, end-to-end solutions can significantly reduce installation costs thanks to seamless connectivity of devices and software. But that’s not the only factor,” Barnfield continued. “For example, failing to focus on OPEX is an error that can lead to a solution being chosen which appears to be cheaper at the outset, but is far more expensive over its lifecycle.”

The increasing cost of storage

Like many surveillance applications, storage constitutes one of the most substantial costs for any perimeter video solution. We've observed a rising demand for higher resolution cameras at the perimeter, ranging from 5MP (which provides the minimum resolution) to 12MP PTZs. These high-tech cameras are particularly popular among customers seeking AI-powered analytics that deliver highly accurate, reliable alerts and superior intelligence. While these latest-generation cameras provide exceptional image quality, their usage comes with considerable cost implications concerning storage requirements.

“To offset increased bandwidth and storage requirements, advanced, space-saving compression technologies are required,” Barnfield said. “Manufacturers’ compression techniques can now go a step further than H.265 and give users on average up to 60-65 percent savings on storage. There’s also bandwidth consumption savings that can be an important factor for some perimeter applications, for example those using wireless connectivity.”

Users might also want to consider cameras that have light enhancing technology, particularly for covering specific perimeter doors and exits that don’t need a long range. Users will often be surprised at the image quality they can achieve, even in darkness.

VMS-related charges

It's crucial for users of perimeter video systems to scrutinize whether they are being billed for unused VMS functions or facing recurring annual license fees and device connection charges. Additionally, the possibility of incurring substantial costs for integrating a third-party camera into the system at a later stage should also be considered. These potentially burdensome pricing models, historically accepted, can significantly drain physical security budgets and often hinder further upgrades and investments.

“Countering this, it’s worth looking for VMS that comes with simple and easy-to-understand and modular pricing structures,” Barnfield said. “If software comes with the features and functions required for perimeter protection, plus zero or low ongoing fees, this is often enough for systems integrators to demonstrate a compelling business case based around the OPEX of software.”

Pay only for what you need

And when it comes to those functions, it’s important that users are paying only for what they need and want, and better yet with a one off, upfront fee. Important features, for example, including failover, redundancy, deep learning analytics, video wall services, and federation services.
“Many end-users are now wising-up to the ongoing burden of recurring maintenance fees or device connection cost,” Barnfield said. “In addition, users are becoming less likely to accept significant leaps in upfront – or ongoing - costs in order to have federation services which allow them to manage an unlimited number of sites and devices.”

At the same time, it’s also important that VMS vendors offer simple integration with third party cameras, and technologies such as access control, to ensure enterprise-level functionality without complex and expensive licensing structures.

Ensuring long term value

In the long run, investing in a system with a suboptimal TCO could pose a potential risk to security. Systems that demand high maintenance costs are more prone to disrepair, and those requiring extensive manual labor for operation are often neglected or underutilized. It's crucial, therefore, to ensure that the TCO value is sound when purchasing a system to avoid such scenarios.

“This is particularly the case when budgets come under pressure,” Barnfield said. “It’s easy, and tempting, to make savings by delaying camera replacements and lighting repairs, or maintenance of Perimeter Intrusion Detection Systems (PIDS) components such as buried cables or fence-mounted detectors; or by continuing to operate a system that has become increasingly clunky and hard to use, and therefore inefficient.”
When budgets need to be tightened, it's often the hidden elements of systems or individual components like a malfunctioning camera that get overlooked. However, this approach is fundamentally flawed. If it was deemed important enough to invest in a fully functioning PIDS initially, then it warrants consistent upkeep.

For this reason, it's essential to account for OPEX costs from the beginning, ensuring the solutions implemented are sustainable over their intended lifespan. This concept circles back to the idea of ROI. For a genuine ROI, the perimeter security system needs to be maintained in optimal working condition and utilized to its full potential. Any deviation from this suggests a misstep at the acquisition stage.

Mitigating risks at the perimeter

The purpose of a fence, or any physical barrier, is primarily to dissuade attempts at intrusion and, in case of its failure, to stall any progress made by intruders. If an intrusion does occur, the barrier should effectively slow down the infiltrators, thereby maximizing the available time for security personnel to respond and intervene.

Video technology plays a pivotal role in enabling this swift response. Its effectiveness has been observed in numerous high-security applications, including border protection, military perimeters, and safeguarding critical infrastructure sites.

“In these situations, a well-designed perimeter video system will enable accurate visual verification 24/7 in all lighting and weather conditions; it will ensure visibility of the entire perimeter, without blind-spots; and in most cases it will incorporate automated detection in terms of AI-powered analytics so that operators are supported in not missing intrusion events,” Barnfield said. “This is particularly important where perimeters are extensive, where monitoring teams have limited resources, and where human error needs to be mitigated. And indeed, most applications involve one or more of these factors.”

A range of perimeter detection technologies is available for integration with the latest VMS platforms, including thermal cameras, an wide choice of sensor technologies, active infra-red detectors, and electric fence systems. In the highest risk applications, more than one method can be deployed to provide multi-layered protection.

Ensuring the right solutions for best returns

In the majority of situations, an effective video system strategically positioned along the fence line appears to deliver the greatest value. This is predominantly due to the highly precise nature of AI-driven analytics, which utilize tools like line-crossing and face detection, as well as loitering detection. These sophisticated tools ensure swift and reliable notifications about human presence or suspicious vehicles on either side of a boundary line, without the interference of false alarms generated by environmental factors or animals.
Alerts can be immediately flagged in control rooms and relayed not only to system operators or managers working remotely but also to officers on patrol in the field through comprehensive smartphone applications. As we continue to observe in a rising number of perimeter security applications, video systems often present the most balanced approach to cost and benefits, provided the right solution is selected.
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