Metrics for Success: How to Reduce the Cost of False Alarms

Cost is a constant focus of management and we often fail to maintain the appropriate level of scrutiny until that inevitable phase of business operations that mandates some reduction in our budgets. Then we run around looking for the a few of the less bloody “opportunities” like travel and delaying long-needed capital expenses. Time is money — look no further than how your team is spending its time.

In this example, our CSO has anticipated this frequent foible from management by thinking more proactively around a Service Level Agreement with a guard force vendor. They saw the potential value of a more directed and analytical focus on the results of calls for service in addition to prioritizing specific kinds of activities, for example, response time to classified area alarms. Generally, what percent of calls for service are unnecessary or a waste of time? More specifically, for those we must dispatch and respond to within an established standard, what percent are simply not valid?

Since this is a heavily populated, 24/7 production complex with extensive electronic security to address regulatory, R&D and life safety objectives, there is significant time devoted to alarm response, and this seemed to be a fruitful target of opportunity. The first hurdle was in the reporting process. Alarm calls were simply dispatched and logged for time of arrival and clearance but no report was made if the alarm was not the result of an actual security event like an intrusion. There was no process for indicating the lack of validity of the call, so nuisance alarms were lost in space. How many were there?

A simple process of recording business unit location, alarm zone and officer time was initiated for all alarms during the third quarter of 2012. The four categories of alarm initiation were selected based on common causes and a fifth was added to account for undetermined but known to be invalid. A total of 1,008 alarms were logged for the quarter. To keep the result from paralysis of analysis, a consolidated $26.00 per hour rate was used which provides for a small (10 percent) overhead for supervisory review.

The fact that in one quarter something just shy of a quarter million dollars in time was spent on chasing alarms that never should have happened provides what seems to be a solid opportunity for a discussion with management by this CSO. Here are some thoughts on these findings:

  • These alarms and related costs were avoidable. Procedures are mature and training is current on business unit operation and practices.
  • There are outliers on frequency of alarms that deserve more focused attention but the general conclusion is that the problem is more common and goes with the cost of protection operations.
  • Facilities “owns” the local system components and when space is reconfigured or occupancy changed, security elements may not be updated for the new arrangements.
  • Some regulatory requirements mandate the posting of a guard until an approved representative arrives to clear the alarm cause. (These costs were not included in this initial analysis)
  • Where there is an established frequency of alarm zone annunciation over an extended period (like with poorly installed or maintained), there is a consequent loss of first responder confidence in the validity and criticality of the call. This can play to an adversary.

If this were a municipality, we would be faced with increasingly stiff fines and eventual notice of non-response by local police. If you were this CSO, what more would have to say on this and what action would you recommend?

 

George Campbell is emeritus faculty of the Security Executive Council (SEC) and former CSO of Fidelity Investments. His book, Measures and Metrics in Corporate Security, may be purchased at www.securityexecutivecouncil.com. The SEC draws on the knowledge of security practitioners, experts and strategic partners to help other security leaders initiate or enhance security programs and build leadership skills.

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