THE MAGAZINE

Security's Worth Gets Tested in Tough Time

By Sherry Harowitz
At the recent ASIS International Seminar and Exhibits, I spoke with a range of companies about how they see the recession affecting the security industry.
 
As TimeSight Systems CEO Charles Foley noted, “the economy has been difficult for everyone.” His company, like others, has seen end users scale back security spending. “We’ve seen a lot of budgets which have been reduced and frozen. We’ve seen a lot of projects which have been strung out,” he says.
 
“Customers are going for what they need, not what they want,” says GE Security’s Mark Barry, president, Americas. As a result, he says, projects are smaller. So while they’ve seen the number of projects increase in 2009, the dollar value per project has dropped.
 
It’s not all gloom and doom, however. Companies like FLIR and OnSSI say that while their rate of growth has slowed from 2008 to 2009, it has still been in the double digits.
 
Being diversified among markets and countries helps. PACOM System’s CEO Johan Lembre notes, for example, that market development outside of the United States, such as in Spain, North Africa, and the Middle East, has been strong.
Barry says that demand has been good in Canada, the Middle East, and Asia, while Latin American is down, and Europe is similar to the U.S. market.
 
Foley and others point out that the downturn offers opportunities for companies that know how to take advantage of them. For example, Gary Perlin, vice president of video products at Speco Technologies, says the recession has “given us time to reflect on how we do things, to reevaluate everything we do.”
 
What they concluded may surprise you: “We’ve brought a lot of the things we were doing overseas back to America, because when we had the time to take a deep breath, we realized that things have shifted, that America is becoming more competitive,” explains Perlin. He says that the cost of shipping from Asia has skyrocketed, while U.S. production costs have come down. Moreover, he notes, when a product is made locally and there is a problem with a unit, the local manufacturer takes it back. That doesn’t tend to occur with goods from Asia, given the shipping costs and logistics.
 
This downturn, like others in the past, has created opportunities for service providers as businesses look to outsourcing to reduce staff and save money, agree executives from AlliedBarton and Diebold. Those businesses also want their contract guards to take on additional nonsecurity duties.
 
More than ever, security systems have to prove their bottom-line worth. Companies want “key performance indicators for security,” says Ken Bukowski, vice president of healthcare at AlliedBarton.
 
Michael Mann, director of global security solutions at Johnson Controls, agrees, adding that as a result of budget pressures, customers “want us to talk to them about how to reduce costs, reduce staff, save time, ensure compliance, and use security as a strategic asset.”

 

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