In today’s dynamic and challenging business environment, it is no longer practical to limit operations to a specific country or region. Growth-oriented businesses look to growing economies in India, Brazil and China in an effort to increase market share and tap into new revenue streams.
As businesses expand, security must expand accordingly. Security directors are often charged with developing security programs to protect a growing network of people and facilities within unfamiliar regions. In addition, CSOs and security directors are being asked to not only protect people and assets in multiple locations across the globe but to contribute to core business functions, a significant move away from the ”guns and guards” mentality of the past. Management looks to security practitioners to play a critical role in business expansion in new markets, relying on these leaders to develop a safe haven for new infrastructure, employees and customers while driving new opportunity and managing costs.
Global Facility Security Strategies
During the financial crisis, businesses have looked outside the United States for growth opportunities; however, expanding into a new region is not as simple as merely leasing property and opening an office. Business leaders need to conduct significant amounts of research in the areas in which they want to expand. At the same time, security teams must evaluate the risk profile of each location and look at local regulations before deciding what security program — technology and processes — needs to be implemented in a specific geographic area.
Security leaders must leverage a combination of people, processes and technologies to effectively protect their infrastructure and related assets on a global scale. Education on the local business climate is beyond critical, and this is where local-based personnel are key to operating in emerging or unfamiliar global markets. They understand the critical nature of the local business environment, along with local regulations and requirements. A product manufactured in one region, for example, may not be allowed in another region due to political or religious conflicts.
The regulatory environments in these different regions are constantly evolving and changing. Security executives planning to deploy in these regions need partners that are dedicated to helping them navigate the integrated security deployments — from inception to implementation — as well as the compliance and regulatory issues. An oil refinery in Dubai, of course, has a very different risk profile than an office building in downtown London.
Understanding the key differentiators is critical in regulated and emerging marketplaces. Here is a look at specific security issues by emerging market.
South America’s second-largest economy is heading toward its slowest growth rate since 2009 due to governmental import restrictions and a drought that affected the local soybean harvest, bringing the economy to a literal standstill.
In October 2011, President Cristina Fernandez de Kirchner tightened currency controls and restricted imports, and then further tightened its regulations in February 2012 with legislation that requires pre-approval of all imports. Importers fought back and in May, the European Union filed a suit against the imposed restrictions, intensifying the disputes between the South American nation and its trading partners. The battle could take more than a year to iron out.
In the meantime, strict import controls continue to wreak havoc on companies trying to import security equipment into the country. Long delays are common, forcing companies to use equipment that is available from local providers.
Brazil is a thriving market with its booming population and significant interest in new technologies, creating a wealth of business opportunities. But Brazil’s import tax rates are notoriously high. It is not uncommon to pay upwards of 75 percent in taxes on imported material goods. Even consumers feel the crunch: Brazil is the most expensive country in the world to buy a computer and is one of the most expensive countries for telecommunications services.
Although the market is exploding, there is a negative effect on infrastructure. The construction boom in Brazil, propelled by the coming 2014 World Cup and the 2016 Olympics, is causing strain on resources and increased labor costs. At the same time, the population and the economy are growing so rapidly that the city is having a difficult time addressing traffic congestion within the metro area, causing headaches to locals.
The make-up of a country’s work week is a significant factor to consider when operating in a particular country. The weekend in many Arab nations is marked on Friday and Saturday.
For businesses operating in the Middle East, it is important to: respect the local weekend, which was chosen to respect religious beliefs; include more working days that overlap with international financial markets; and improve business contacts with Western states.
Implementing a plan to honor the local country’s traditions is just as critical as making sure operations run smoothly.
The import tax in India, also known as import duty, is levied on almost all products and goods transported within country borders. The tax rate ranges from 5 to 45 percent, determined by the product’s type, quality and expected use.
Top-tier large importers have access to the Green Channel Facility, which streamlines the import process. As an approved importer, large volumes of a product can be imported without being checked individually, but this is only allowed if there are no concerns regarding a product’s quality.
There is an option for an import tax savings that can be achieved. Rather than purchasing a product locally from a security integrator, for example, they can sell it to an organization as a high-seas sale, which reduces the import tax payment due.
Unlike the United States, Europe takes full advantage of holidays and the lazy days of summer. In fact, more than 70 percent of European-based businesses operate with a skeleton staff during the summer months, while other organizations throughout Europe close down. Therefore, it is important to plan months in advance to make sure projects are completed ahead of summer.
But the long holidays are not the only thing to consider when doing business in Europe. The data privacy laws in Europe are incredibly strict and have a significant impact on the security industry — in particular, sharing employee data that is stored on an access control system between offices in other countries may not be allowed.
Also, strict laws control video storage policies. The EU requires companies to comply with regulated video retention times, camera placement, video monitoring and data transmission. If a company is not aware of these requirements, it can quickly become non-compliant with the local data privacy laws.
It may seem simplistic, but when operating a business in Russia, it is a requirement: All legal agreements must be in authored in Russian. With that in mind, it is important to have a translator on hand to address the translation of native language legal documents into Russian.
In 2002, China developed the China Compulsory Certificate mark, commonly known as CCC Mark, a compulsory safety mark for products imported, sold or used in theChinesemarket. The CCC mark is required for both domestically manufactured products and technologies imported into China, including electrical wires and cables, IT equipment, low-voltage electrical equipment and alarm systems. The certification process takes between four and eight months, and includes an application, factory testing and inspections. If a company plans to specify products for their operations in China, the CCC mark is a requirement.
The Global Business Landscape
It is important to note that it can be challenging to operate in many emerging markets, as cultural practices ingrained within the society tend to violate the foreign corrupt practices act. Therefore, it is critical to deal with reputable global organizations wherever possible to protect yourself and your business from these types of issues.
Because of the growth of the global economy, increased emphasis on security due to evolving risks and the expanding role of security within a business, security leaders look to rely on a long-term partner that is able to recommend security products and initiatives that will address various needs. Security systems integrators can develop a customized approach to a customer’s security needs, whether local or across multiple continents, providing value beyond the installation of technology.
Leveraging the strength of a global integrator empowers enterprise-class customers with the ability to integrate security technologies into a comprehensive solution. Also, global security integrators deliver a breadth of knowledge on local markets and traditions that can help provide a safe environment for operations and help a customer’s business thrive. Overall, this enables organizations to grab hold of valuable information to enable it to be more effective, efficient, successful and prepared.
Renae Leary is Senior Director, Global Accounts, for Tyco Global Accounts, which delivers sophisticated security integration to enterprise-class customers. Through its Global Centers of Excellence for design and project management, the company focuses on complex integration projects that require a high level of program management.