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