Security: to invest or not to invest, that’s the question!
The objective of this article is to provide the reader with a clear and simple formula to decide whether it is sensible to invest in security measures to decrease or prevent risks from occurring, or not!
Traditionally, security has been viewed as a cost, an overhead, as an unfortunate expenditure necessitated by the jeopardy presented by doing business. However, it is possible to turn this conception on its head and view security as a contribution to the bottom line and as profit generating.
A simple indicative formula that can help you make a well-considered decision is:
P = Probability of a threat (on a scale from 0-1)
0 = little probable
0.25 = exceptional, but possible
0.50 = possible
0.75 = real
1 = very real
C = Cost of damage of a threat (in $)
S = Cost of security measure (in $)
If S < (PxC) = implement S
If S > (PxC) = do not implement S and look for alternative actions
Example for an armed robbery on an office of a fictitious small diamond company:
- P = 0.75
- C = $250.000 (stock in safe at time of robbery)
- S = $20.000 (survey, awareness training, security door/lock, alarm system, hold-up button, intercom, CCTV, etc)
- (PxC) 0.75 x $250.000 = $187500
- S < (PxC) $20.000 < $187500 à invest