4 Hidden Costs of Alarm Monitoring Systems (and How to Avoid Them)

Republished on verkada.com with permission of Security Magazine. See the original article here.

In many ways, implementing a cost-effective physical security solution is a long-term play. Beyond the upfront price, which can be high for enterprise deployments, organizations need to think about the hidden costs that add up over time.

Significant as they are, the expenses that ultimately create a high total cost of ownership (TCO) aren’t always communicated, anticipated, or even immediately apparent. In this blog post, we detail four of the most common hidden costs to look out for when evaluating commercial alarm monitoring systems for your organization.

1. Theft Due to Gaps in Coverage

This hidden cost is pretty straightforward: incomplete security coverage creates vulnerabilities which, if exploited, can lead to losses from theft, vandalism, and other incidents. Traditional alarm systems that rely solely on intrusion sensors, like motion detectors, make it difficult to monitor every corner of a property, especially for large, multi-site organizations.

Drive-through or drive-by security is similarly inadequate. As part of its previous security strategy, for instance, Move It Storage hired a private security guard to periodically drive through their properties. This service cost them $1,000 per month per location. Even if the company hired drive-through security for just half of its 115 sites, the cost would easily exceed $50,000 a month.

And yet, Move It Storage continued to experience security incidents (it’s not difficult for an intruder to spot oncoming headlights and hide). Not only were they paying thousands of dollars for an inadequate security service, they also had to factor in losses from theft and vandalism that continued to slip through the cracks.

So how do organizations avoid the cost of theft due to gaps in coverage? Alarm systems that integrate with video security are able to use camera footage, in addition to intrusion sensors, to better detect threats. Move It Storage took this approach by implementing Verkada, a solution that uses security cameras as alarm triggers, supplemented by 24/7 professional monitoring. Not only did this provide Move It Storage with increased visibility into the activity on its properties, the company was also able to reduce incident response times from eight hours to ten minutes. That’s across 6.3 million square feet of storage space.

2. False Alarm Police Calls

Alarm systems are highly effective deterrents against burglary. However, it’s false alarms that account for 94-99% of police alarm dispatches. Beyond diverting police resources, false alarms pose a significant cost to commercial businesses. 

Take Smoker Friendly, a large retailer with more than 40 locations. They were experiencing about 20 false alarms a month, each of which cost them at least $500 in fines. Their new commercial monitoring system from Verkada sends a text with a link to video footage when an incident is detected. If the company’s designated contact does not respond, a professional monitoring agent verifies the event and only calls the police if absolutely needed.

By reducing these false alarms, Smoker Friendly has saved $150,000 annually.

3. Service Fees for Backend Changes

This new system also helped Smoker Friendly eliminate its regular service fees ($85/hour). Like Smoker Friendly, many companies face steep service charges anytime a setting needs to be changed or maintenance or troubleshooting is needed. The Director of Network Services at Dairy Farmers of America was charged similarly “huge” fees for field service visits.

Both of these companies overcame the high cost of service fees by implementing a commercial alarm system with: 

• Unlimited user seats and tech support included in total upfront cost

• Drag-and-drop interface on an intuitive cloud platform to easy customize alarm triggers and responses

• Straightforward backend programming that in-house teams can handle themselves

• Centralized, web-based monitoring across all locations in a single view

• Custom notifications for who should be notified of an alarm (and how)

4. Maintaining Security Monitoring Hardware and Equipment

An additional problem that all three of these companies faced was that of scale. Across dozens or even hundreds of locations, even incremental security costs can add up to dramatic monthly line items. That goes for repairing and replacing equipment, too, which can inflate total cost of ownership for an enterprise-scale alarm monitoring system. 

To avoid high maintenance and repair fees, look for a system that provides unlimited cloud archiving for data storage, for one. Disqualify vendors without strong hardware warranties (Verkada offers an industry-leading 10-year warranty). Finally, go with a system that doesn’t require NVR or DVR, which can be difficult and costly to maintain at scale. 

Apart from an industry-leading warranty, Verkada systems avoid high maintenance and repair fees thanks in part to their API integrations. These integrations automate high-volume, manual tasks, such as system updates, so they are less time and resource intensive to support at the enterprise level. The APIs also play well with common enterprise security workflows, such as multi-factor authentication.

Last Thought: The Price Tag Doesn’t Always Tell the Whole Story

For many enterprise-scale alarm monitoring systems, the initial investment and surface-level cost is only the tip of the iceberg. The last thing you want is to find out down the road that total cost of maintenance and poor usability are hampering the long-term scalability of a solution. Unfortunately, this is more often than not the case.

Let’s be frank: the initial investment for premium systems is considerable. However, these systems don’t surprise you down the road with any of the hidden costs we’ve described above. Their cost-effectiveness and scalability in the long run allow organizations to bring total cost of ownership down, and rest easy knowing their people and assets are protected by both state-of-the-art devices and 24/7 professional monitoring…

…Making the initial investment well worth it.

To learn more about integrating alarms into your physical security system, visit our Alarm product page, attend an Alarms webinar, or email [email protected].