SECURITY SECURITY BLANKET
Over the years, the industry has witnessed a dangerous cycle of undercutting, but the tide is slowly turning. Intelligent customers are looking to their suppliers for new and innovative
solutions that add value. And technology is driving this change. There is now an opportunity for security service providers to demonstrate their worth outside of basic cost metrics.
Over the years, numerous leaders – from both integrated facilities and single service firms – have lamented the low margins that plague the security sector. Of course, security does not suffer alone. Over recent months, a number of big multi-service firms have fallen into considerable financial trouble and the trend to squeeze margin and sacrifice profit in order to win contracts is at least partly responsible.
Security, however, is particularly commoditised. End users tend to look at the level of resource required for the square footage in question, and decisions are usually based on the cost per hour as opposed to the value that can be brought to operations. Winning business in the security industry often involves an open book approach, and this means suppliers are frequently asked to present their overheads, margins and profit figures during a tender process.
“Failure to charge an appropriate margin that allows suppliers to reinvest into the business
has resulted in operational management cost-cutting.”
There is an industry-wide acknowledgement that these numbers are potentially blindsiding buyers. When one focuses solely on price, it is hard to notice any differentiation between a supplier charging a 5% margin compared to a supplier charging a 3% margin. Customers are often forced to choose the cheapest, not just because of dwindling budgets and unscrupulous procurement teams, but because they don’t understand why they should spend more for what on paper looks like the same thing. This has acted as the trigger in the race to the bottom.
The cost-over-value focus has impacted what is happening on the ground within contracts, specifically the delivery of security services. Failure to charge an appropriate margin that allows suppliers to reinvest into the business has resulted in operational management cost-cutting.
Kieran Mackie, Commercial Director for Amulet Security, claims that this has led to a reduction in centralised resource. “Fifteen or so years ago,” he said, “a contract or operations manager would look after up to 25 contracts, involving between 70 and 80 officers. These days, however, the average industry level is between 40 and 50 contracts,
40 | TOMORROW’S FM
with teams of up to 150 officers.” According to Kieran, security providers are having to spread themselves thin, which means customers don’t get as much attention. Nor do they see as many officers on their sites.
As security firms do what they can to maintain a high level of service at every site, and every contract, for less and less, their customers begin questioning whether they’re getting value. If the mantra ‘you get what you pay for’ doesn’t strike the loudest chord during the bidding process, trust can flatline on both sides not long after the contract mobilises.
As with any cloud, however, there is a silver lining. Client expectations are shifting. Customers are looking for their providers to give them intelligent, consultative services based on data insight. They expect suppliers to offer an array of value added services to the standard offering. There is not just the expectation for innovation and a proactive, forward- thinking approach, there is a demand for it.
Mike Bluestone, Director at Corps Security, suggested that security shouldn’t be viewed as a grudge purchase. He said: “Like insurance, [security] shouldn’t be in place just to deter or prevent something. It needs to be a responsive and proactive service. It really is an enabler to the wider FM provision.”
Clients are always on the hunt for the most cost-effective and efficient way of managing their property portfolios, but quality remains key. That is one of the main reasons behind Atalian Servest’s decision to join forces with Business Insight 3 (Bi3). The global FM outsourcing company sought to champion a new initiative to improve service line delivery and efficiency in the security sector. Last year, the security team, led by Jason Etherington, introduced several systems to improve efficiency and effectiveness, including a video analytics system and facial recognition software.
At a number of sites, Atalian Servest is now using high- end IEE anti-tailgating technology, which can prevent unwanted visitors from following authorised personnel using the likes of fobs and key cards into buildings. This tech allows the team to identify if there are people within a certain area and can prevent tailgating as it will only let one person through at a time.
In addition to trialling new tech, Etherington’s team is responding to the increased popularity and demand for ‘blended’ solutions. “A number of our clients have asked us to look at refreshing the security offering, often with the desire to merge front of house, reception and security – a trend that has been increasing in the industry over the past few years,” he said.
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