The Drawbacks of Commoditizing Security

Organizations should be fielding competent, properly trained and equipped personnel who are adequately prepared to handle critical scenarios


The more innovative security departments and contracted security providers recognize the need to provide more than gates, guards and guns. They recognize that security personnel, systems and the policies and procedures adopted by an organization must work in harmony to gain efficiencies and complement one another as part of a strategic security program - ideally one that is endorsed and supported by top levels of management. Unfortunately, when faced with creating value beyond the basics, few companies challenge themselves or their suppliers to assess these efficiencies in an integrated approach that represents the total cost of ownership. Uniformed security service providers, technology manufacturers and integrators typically have different agendas and focus on their piece of the puzzle rather than the larger picture being created.

While many companies value the importance of these elements when looking for a security vendor, and even take steps to incorporate these requirements into the selection process, current economic pressures are forcing corporations to reduce costs. This condition has reinforced an old adage: "you get what you pay for."

During a time when the need for highly trained and competent security personnel is at an all-time high, organizations continue to use an RFP/vendor selection process that forces security providers to cut corners, resulting in poor hiring decisions, slipshod practices and a greatly increased liability for the companies they should be protecting. Security vendors interested in bidding these opportunities are often placed in the difficult situation of having to balance sufficient training, competitive wages and benefits against unreasonable pricing parameters, shrinking margins and decreasing profits.

It is very tempting for decision-makers to choose the lowest bid when contracting security services. However, many organizations are learning there is a greater price to pay when taking this approach. Low-bid contracts result in a baseline service that may end up costing more in the long run if incident respose is not properly accomplished. I recall a comment made to me by a long-time security professional responsible for directing the global security operations of a notable U.S. food manufacturer:

"I am not paying that security officer at the front gate to check vehicles and IDs, nor am I paying that control center operator to watch surveillance cameras and acknowledge alarm systems all day. I am paying for them to respond appropriately and make solid decisions when the [stuff] hits the fan and my operations and my employees are at risk. If the officers are unable to handle the crises when they arise, I have wasted $5 million of my employer's money."

His point was well-taken. The employment of site security personnel, and the corresponding compensation and training they receive should not be aligned with what they do when all is calm. Rather, the emphasis should be placed on providing competent, properly trained and equipped personnel adequately prepared to handle the more critical scenarios that are likely to occur at that facility. The training, compensation and skill sets of these officers should be focused on meeting these expectations; however, this concept is sometimes lost in the RFP process where perceived value is associated with routine day-to-day duties over that of a well-orchestrated and appropriate incident response.

One Step Forward, Two Steps Back?

Most organizations using contracted services and are challenged with continually reducing the cost of the contract or service agreement. This includes negotiating with the current supplier, obtaining discounts for term commitments, competitively bidding the contract and aggregating multiple facilities into a corporate agreement for volume discounts. A recent trend to get the absolute best price is the introduction of a reverse auction designed to get two or more finalists to blindly "out-bid" one another by posting lower rates than their competitors in a live auction. In a desperate attempt to gain business within a very competitive market, security vendors find themselves bidding lower than what many would view as reasonable or rational, given the skill-sets and professional qualities required to deliver high-quality service.

The expectations for performance rise while the costs associated with delivering this service are expected to go down - something has to give.

As well-intentioned as many security providers are when they prepare to deliver the services that were sold, over time it can become very challenging to sustain the following service elements: