How Security Enhances Your Company’s Bottom Line

How Security Enhances Your Company’s Bottom Line

For many executives, and particularly so in the Chemical Industry, security is a necessary evil, but an unnecessary cost item on the budget, as it does not produce revenues or add to a company’s profitability. I would continue that such a belief is simply not true! Security systems and measures, applied correctly (meeting design criteria and jibe with accepted standards and practices within the security industry) can greatly enhance the “bottom line” of any company, and already more so for a chemical company in today’s uncertain economic climate by virtue of the following:

1) Prevention of Incidents:

clearly, a dominant goal of any security department and the systems and measures adopted, is to prevent incidents, particularly those that might impact employees, company operations, infrastructure, inventories, etc. A stoppage in operations or provision of sets is assessable in many different ways, and I would put forward that security measures in preventing such stoppages is a valuable addition to the “bottom line”, as is the prevention of damage to infrastructure and other situations. What would be the cost to the company if a dominant manufacturing area was damaged, or a warehouse destroyed with its inventory, or there was basic damage to a series of loading docks that disrupted supplies, etc? Such events certainly give rise to thought.

It should also be remembered that while chemical facilities have always been concerned about safety and the prevention of accidents at a plant, they now have to be very concerned about deliberate acts of sabotage. Such acts may be terrorist related, or the vengeful intent of a disgruntled employee. In either case, a successful event could be financially crippling to the company.

2) Prevention of Negligent Liability:

It is unfortunate that negligence can only be measured “after the fact” in the minds of many executives, but in fact, it is an area that should be considered in anticipation of an incident that might include alleged negligence or alleged gross negligence. In today’s America in particular, the occurrence of a security event such as an assault in the workplace, assault in the parking lot, theft of private data, etc., will almost certainly cause a legal action of some sort. As I have commented in other articles, it is doubtful that an organization will be able to completely avoid a lawsuit as such, but it is vital that the company be able to defend itself against any alleged negligence.

Those companies and organizations that take sound and effective security measures, and utilize adequate security design criteria in developing their security measures will be in a much better position to thwart charges of negligence than those who have not pursued such measures. Punitive damages, if proven in court, could average very meaningful amounts in the hundreds of thousands and possibly millions of dollars, exacted as a penalty against the company. That will certainly affect the “bottom line” already with the best insurance coverage.

3) Loss of Public Confidence

In the event of a serious incident taking place, and again, particularly so in the case of chemical and pharmaceutical companies, there is a secondary cost in addition to the legal and health consequences; that involving a loss of public confidence. Where that occurs, it is almost closest followed by your customer’s loss of confidence. Everyone remembers the 1982 “Tylenol” situation in the U.S., or the 1984 Bhopal gas leak situation in India. Imagine the effect of an incident with similar consequences upon your company, and it was deliberate.

The cost of good security needs to be looked at in comparison to such consequences, though not necessarily on the extent of the two events referred to above.

4) Staff Morale:

There is a multitude of supplies that detail the effects of low staff morale affecting productivity caused by everything from the Monday morning “blues” to personal concerns in their life, to corporate concerns which include fears for personal safety when at work, and fears of damage or theft of character while working. Good security will generally give an employee a feeling of being in a safe ecosystem which is typically found to be a morale booster. Where a person is concerned that they may be accosted or assaulted at any moment, or harassed in a myriad of different ways, the productivity for that person is not going to be high.

One example that I have utilized many times in CCTV camera surveillance systems, particularly where there are exterior cameras covering the facility parking lots is to provide additional video monitors (an inexpensive addition) in areas such as the cafeteria, meeting rooms, supervisor offices where employees can see that their vehicles are being observed. The increase in morale, and by definition, productivity is important.

It also provides “free” security manpower to a degree, as those same employees watching their vehicles, as an example, are also almost certainly going to report suspicious activity.

5) Company Perception:

Good security at a facility is often a deterrent to theft and pilferage where otherwise, individuals or groups might easily be tempted to include in such criminal acts. I have before made mention of the 10/80/10 rule in security where 10% of the population are considered to be totally honest all of the time. 10% of the population are considered to be totally dishonest all of the time, and the remaining 80% are inclined to dishonesty if there is opportunity. Sound security measures are not only a deterrent to possible criminal acts from the outside, but are also a valuable deterrent to what is considered “insider” crime, and may range from petty theft to fatal assault.

Unfortunately, the pilferage factor takes on an thoroughly new meaning at chemical facilities where there is real concern about “Theft/Diversion” of certain types of chemicals, that when mixed with other materials, provides a very effective Improvised Explosive Device (IED). Terrorists and Extremists will be prepared to pay well for small amounts of such chemicals.

6) Sales Advantage:

It does sound a little incredulous at first to suggest that good security is somehow able to assist and truly increase sales, but it is a perfectly valid point. From experience, and particularly in industries such as the chemical industry, where companies are supplying raw materials, or sub-compounds, etc., to their customers, continuity of supply can often be as important as price and other factors, and in several situations, being able to rely upon a vendor for continuous deliveries at all times, particularly in a crisis, is paramount.

suggesting to a customer that you have carried-out a qualified Security Vulnerability Assessment (SVA), devised appropriate security design criteria, and implemented sound security measures will greatly aid in the customer’s perception of your company, and its ability to provide product or sets without interruption. In addition to establishing long-term customer relationships, such perception will often rule to increased sales in addition as referrals from that customer to other possible customers. As such, there is certainly an addition to the “bottom line” that is both valid and meaningful.

7) Security Legislation

In 2006, the U.S. released its initial version of new security legislation entitled ” Chemical Facility Anti-Terrorism (CFATS) Standards”, (ANPR) – 6CFR Part 27 with the Final Regulations (Final “Chemicals of Interest” – COI List approved in 2008.

The regulations are significantly different to prior regulations on security, such as the 2003-2004 Public Health Security and Bioterrorism Preparedness and Response Act (BPRA), and include not only the completion of a Security Vulnerability Assessment of a facility, but where applicable, the submission of a Site Security Plan (SSP) followed by a timetable of implementation.

At last count, the Department of Homeland Security (DHS) had trained some 250 inspectors to monitor and enforce the security regulations. Failure to meet the regulations in a timely manner can consequence in harsh fines (up to $25,000.00 per day of violation), and in certain circumstances, the DHS have the strength to shut-down a facility altogether.

As can be seen, the cost of not having adequate security may well outweigh in any case budget costs apply to actual security measures and systems at a facility.

There are, of course, other examples of where good security can add to the “bottom line”, but these are some of the major ones and well worth taking observe of.

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