Archive for October, 2014

Security Robots – Total Cost of Ownership

One of the questions I hear a lot is “How much is a Security Robot?” Of course, there is the simple answer that focuses on the retail price of the hardware, but that isn’t really what people are asking. What they want to know is what is the Total Cost of Ownership – what  is it really goning to cost me to put one of these robots to work.

Three year TCO comparison: Security Robot: $66,000  Camera Array $93,000  Security Officer $242,000

The relative 3-year Total Cost of Ownership of three roughly equivalent security solutions – Security Robots, a camera array, and an overnight security officer.

So, here is our analysis, based on feedback from various security professionals and other experts.  Let me know what you think!

Total Cost of Ownership

Total Cost of Ownership (TCO) is a key metric for evaluating the purchase of any new technology, and security robots are no exception. There are three main components to TCO: Initial investment, maintenance, and upgrades. In the case of a service, there may be a low initial investment, but the ‘maintenance’ costs are the ongoing service expenses, while in the case of a technology purchase the initial investment may be significant, and the ‘maintenance’ costs relatively small.

TCO Security robot

We will work under the following assumptions:

  • A base robot with a typical mix of option packages is purchased

  • A full service contract is added for the working life of the robot

  • A full software license and upgrade contract is in place for the life of the robot

  • The robot has a three year service life, after which it is disposed of at zero value.

These assumptions ignore any residual value at the end of service, and discount the possibility of an extended service life as a result of proper maintenance.

Cost Initial Annual lifetime
robot $45,000.00 $0.00 $45,000.00
service $0.00 $3,500.00 $10,500.00
software $0.00 $3,500.00 $10,500.00
Total $45,000.00 $7,000.00 $66,000.00

Evaluation

Of course, in isolation this TCO number has little meaning, so it is best to compare the TCO of this solution with the TCO of the alternatives. There are two alternatives that are frequently discussed: A security officer and a fixed camera array.

Fixed Cameras

Since the security robot carries a camera, one of the most common candidates is an array of fixed cameras. In a typical installation, a single fixed camera can cover approximately 1000 sq ft, and can easily cost $1500 for installation, in addition this camera needs to be connected to a video management system and be monitored.

One security robot can typically patrol 50,000 square feet of warehouse or data center, so it would be necessary to install 50 cameras to cover the equivalent space. We also assume that the cameras will cost about $1.00 per month per camera for service and for software upgrades.

On the surface it seems that a camera array is roughly equivalent to a mobile security robot in total cost of ownership.

However this may be misleading. The cameras themselves provide excellent video records of what occurs in a facility, but (unless they are equipped with advanced video analytics) they do not generate alerts. This can leave the security client in the position of the owner of an e-cigarette / vape distributorship who arrived Monday morning to watch 6 hours of high definition video of a thief stealing over $300,000 worth of merchandise.

Adding real time video monitoring to a camera typically adds about $8.00 per month per camera to the TOC. In our example this adds $14,400 to the 3 year TCO bringing it up to $93,000.

Cost Initial Annual lifetime
50 cameras $75,000.00 $0.00 $75,000.00
service $0.00 $600.00 $1,800.00
software $0.00 $600.00 $1,800.00
Video Monitoring $0.00 $4,800.00 $14,400.00
Total $75,000.00 $6,000.00 $93,000.00

Security Officer

Of course, when we talk about the comparison with a manned security patrol, the idea of Total Cost of Ownership is a little different. Rather than purchasing a security officer, this asset is rented – so we need to compare the cost of the officer over a specific time window. We will use the same three year window that was used to evaluate the TCO of the robots and the fixed camera systems.

We will also need to look at several other aspects of putting a security officer to work, costs like the recruitment and training, the ongoing Workman’s Comp and Medical costs, and the need for ongoing training, licensing, and testing. These all combine into the TCO of the security officer.

Salary

The base rate for the security officer is the most variable, depending on the location, the economy, and the requirements for specialized skills or background. However, according to the Bureau of Labor Statisitics, the average salary for an unarmed security guard is a little over $17.00 per hour, so we will use that number. In addition, since we are looking primarily at overnight security we will focus on a twelve hour shift.

Recruitment and on-boarding

Unlike a security system where a sales person seeks you out to convince you to buy a system, you have to recruit and train your security officers, or pay a recruiter to do much of the work for you. Either way there is a significant cost associated with putting a new employee to work.

Training, testing, and certifications

In addition, each employee is typically required to maintain certifications or licensing with ongoing trainings, and typically routine testing for polygraphs, drugs, and competency adds to the annual cost of the security officer.

Security officer TCO

Putting these individual costs together we get the results shown in the table below. While it is generally agreed that an alert, focused mobile security officer is the best asset in the security toolbox, it is also clear that this is the most expensive option.

Cost Initial Annual lifetime
Security Officer $0.00 $74,460.00 $223,380.00
Recruiting and On-boarding $5,000.00 $0.00 $5,000.00
Training, Testing, and Certification $5,000.00 $3,000.00 $14,000.00
Total $10,000.00 $77,460.00 $242,380.00

Summary

So what it really comes down to is this – if a security robot is a viable solution for your security concerns it is the  most cost effective solution you can deploy. Over a three year window, It can save tens of thousands over a camera array, and hundreds of thousands over a human security officer.

Three year TCO comparison: Security Robot: $66,000 Camera Array $93,000 Security Officer $242,000

The relative 3-year Total Cost of Ownership of three roughly equivalent security solutions – Security Robots, a camera array, and an overnight security officer.

The mobile security robot brings a number a capabilities to the facility that the camera array cannot. Temperature, motion, explosive gass and smoke sensors. Mobile authentication provided by reading RFID and prox cards provide the ability to confirm access in both time and space.  Much like the focused, alert mobile security officer.

Now, a security robot is not going to be viable in every situation. Our discussions with professionals suggest that 8% to 12% of the typical shifts might be suitable for a robot. It is not a one size fits all solution.  But for that night shift mobile security patrol in a warehouse, shopping mall, or data center – it may be your best, your most cost effective solution.


Where is your robot? Ours are working through the night, keeping facilities safe and secure.


For more information about putting a security robot to work in your facility, contact us at Gamma 2 Robotics.

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Security Robots and the Stock Market

It’s early in the morning, and the news is disturbing.  The stock markets are nervous following yesterday’s drop, and the futures are not encouraging.  What does this have to do with security robots you ask?  Great question!

Security managers have a tough job – the need to keep their business, their employees, and their facilities safe and secure. And they need to do it in a cost effective manner. Sometimes this can be at odds with other goals of the business, a competition for resources. And the economy impacts those resources.

When the economy looks shaky, when the stock markets look weak, businesses react, just as investors react. With the perceived increase in risk (whether the risk is real or not) businesses get conservative – they have to. And that usually means cutting costs – and security is perceived as a cost.  So, a security manager may be looking at reduced operational budgets, and longer term capital expenses may be put on hold.  In spite of this the security manager has to provide that safety and security with reduced resources.

Shelley, the client does not look happy about having to tell Bob that the costs must be cut.

A painful discussion with a client – until the topic of security robots are brought up

This is the same for all the departments in the business, but security faces an additional challenge. Unlike many departments, as the economy gets weaker, the security threat increases. If unemployment rises the incidence of theft, break-ins, and damage increases. So the security manager has a growing problem to defend against at the same time that the resources are shrinking.  It is not just a case of trying to do the same job on less money – the security manager needs to do a better, bigger job on a smaller budget.

This is where security robots enter the picture. The robotics industry thrives in tougher economic times. As budgets get cut, businesses have to look for innovative solutions that provide more bang for the buck. That is exactly what the robotics industry brings to its customers. We have seen this over and over as automation and robotics industries grow during recessions.

Imagine our security manager being told “You need to cut your budget for overnight patrols by 50%.” That means laying off people, there is no way around it. But the needs of the security function remain the same or increase. A security robot can work for less than 1/4 of the cost of the security officer who was laid off. That means putting two security robots to work and still meeting the 50% budget cut. Think about that – twice as many patrols for half the budget.

Robot patrolling a receiving dock, looking for intruders and monitoring changing temperatures.

Robot patrolling a receiving dock, looking for intruders and monitoring changing temperatures.

Now, these are robots – not people, they do not have the same judgment, the same intelligence, the same instincts. But for many overnight patrols what is needed are the sensors, the mobility, the ability to call in an alarm about an unusual condition. That is a job the robots can do hour after hour, night after night. They patrol, observe, and report to the human security officers – extending an officer’s reach, giving her the ability to be in two, or three, or four places at once.

So while we watch the fluctuations of the markets, you know that there have to be a lot of worried Security Managers, but some of them are asking the right question – “Where is my robot?”


For more information about the Gamma 2 Robotics and the Vigilant Security robots check out our website


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