Understanding the Total Cost of Your Electronic Security System

June 5, 2006
Total cost of ownership depends on whether you staff and run the system yourself, or outsource system management

When building owners and managers ask how much their building’s security system will cost, most are thinking of the obvious investment required to set up a security system: (1) system design, (2) installation, (3) maintenance, and (4) security guards.

But the less-obvious costs are considerable. The costs of running and operating the system on an ongoing basis include a variety of unseen expenses, which must be taken into account when budgeting the total cost of ownership. A security system’s total cost of ownership depends on one critical decision: Will you staff and run the system yourself, or choose to outsource the ongoing system management?

Once installed, a run-it-yourself system becomes the responsibility of the building owner, who will have to create and maintain a technological infrastructure and hire or assign staff to run the system continuously, even on weekends and holidays.

The savvy building owner turns to an expert to perform each of the critical functions of ongoing system management. The cumulative savings of outsourcing are significant, lowering costs, on average, by more than $400,000 over a 6-year period (the average lifetime of a run-it-yourself system).

Consider the Obvious - and Not-So-Obvious - Costs
The not-so-obvious costs of running a high-tech, electronic security system include:

  • Ongoing Monitoring. Run-it-yourself systems often hire an external provider to monitor only the fire panel. With outsourcing, the costs of ongoing monitoring of all alarms (including fire, life-safety, and other critical mechanical systems) are included in the outsourced operations fee.
  • Ongoing Administration. Access cards must be issued and revoked in real time. Reports must be run to track visitor and employee activity. A run-it-yourself system generally requires an administrative assistant’s time for several days each month. With outsourcing, the costs of administration are included in the outsourced operations fee.
  • Ongoing Programming. To respond to constantly changing building and tenant needs, you will need to hire a programmer for several hours each month to reprogram a run-it-yourself system in a timely fashion (e.g. to reflect changes in holiday schedules). With outsourcing, the costs of ongoing programming are included in the outsourced operations fee.
  • Ongoing Operations. Emergency generators, redundant computers, and a 24/7 IT staff are required for the physical infrastructure of your system to operate properly. With run-it-yourself systems, your network administrator and/or building engineer will be responsible for troubleshooting, which will take them away from their primary responsibilities. With outsourcing, the costs of operation are included in the outsourced operations fee.
  • Ongoing System Changes/Upgrades. Changes and upgrades must be performed continually as new functionality is required and technology improves. Run-it-yourself systems require that the property manager or guard understand the system’s functions as changes/upgrades are implemented. If that knowledgeable person becomes unavailable, the system will cease to work effectively. The outsourced professional has a thorough understanding of your system’s unique characteristics; with outsourcing, the costs of ongoing changes/upgrades are included in the outsourced operations fee.

Steven Rindner is executive vice president at Washington, D.C.-headquartered Kastle Systems (www.kastle.com), a leader in building and office security-system design, installation, and maintenance. For more than 34 years, building owners, developers, and tenants have achieved cost savings and heightened performance by outsourcing to Kastle the vital ongoing functions required to run a security system.

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