Viewing Security as an Expense is Costing Companies More. Investing in Security is Actually a Profitability Strategy.
The intersection between security and financial acumen often gets overshadowed in a constantly changing economic landscape. While security is essential for safeguarding assets and ensuring continuity, its perceived monetary value is mired in misconceptions affecting company profitability. For many, security is viewed primarily as an expense rather than a potential cost-saver. However, understanding market trends is imperative for businesses. Being armed with financial knowledge builds stronger cases for project approvals but also underscores the potential ROI.
Organizations need to break singular approaches and foster a culture where even non-finance professionals can navigate economic conversations, especially around security. This holistic understanding can transform security from a grudging expenditure to a dynamic tool that actually enhances profitability.
At GSX 2023 2023, Kevin Koharki, Associate Professor of Accounting at Purdue University and an Expert Advisor at CAE Consulting LLC, and Moe Salahuddin, the Director of Global Security, Investigations, and Emergency Management at Wesco, both explored this very topic during a GSX-hosted learning session. The two expanded on what teams should prioritize in getting their security proposals approved by upper management, and tackled how a perception on cost-savings can cost more and impact profitability.
Koharki and Salahuddin’s Thoughts on Profitability
Financial Acumen in Security Proposals
“You can apply this at any time. You see market trends, when the economy’s doing good, you have a little bit less theft, economy’s doing bad, you have more theft than normal, right? Because everyone’s looking for that additional income.” –Salahuddin
“We’re talking today about the importance of obtaining financial acumen to get approval for security proposals. The hope is that a lot of the individuals in this room, they’re great at security, being security professionals, but they may not be the best at understanding how to get their proposals approved by senior management. And so we’re trying to educate them on the importance of, and how to obtain financial acumen to basically build better business cases and obtain funding for their projects.” –Koharki
Enhancing Skills for Business Approvals
“Yeah, I’ve been in the business about 26 years, and I have a certain amount of knowledge set that goes across, but until I took Kevin’s class, I completed an MBA in his program at Purdue. Until I did that, I wasn’t able to connect all the dots and get the appropriate business or financial acumen that I’ve been able to take and apply at WESCO, and just my general knowledge of security to help roll out and implement some of our programs.” –Salahuddin
The Importance of Trust within an Organization and Increasing Profitability
“It really comes down to training. They have to be open to wanting to basically develop trust within their organization, between not only the C-suite on down, but also the lower levels on up. And so where a lot of companies fail, they leave this particular business scale to the very high up folks within the corporation. But if they were actually able to train people down below to think a little bit more clearly about this, they’d become much more efficient, much happier employees. It’s really about culture and ultimately drive higher profitability.” –Koharki
Understanding and Implementing Loss Prevention
“We’re actually gonna go in through a few different case studies where understand the difference between your OpEx, your CapEx, how to implement a loss prevention strategy top-down, where to go from a reactive state to a proactive state as it pertains to loss prevention. We’re gonna cover all those things during our presentation and how somebody can actually take that and implement it.” –Salahuddin
Pitching Security as a Value Proposition
“If you understand these things, as opposed to just giving somebody a quote, say, this is how much it costs. Here we go, take a look at this document and it shows the internal security professional how to take this and then sell it to your finance. Because at the end of the day, security is viewed as an expense and not a revenue generator. So how are you gonna go in there and convince your bosses, hey, this is the financial portion, this is why we need this, and this is how you can implement it financially.” –Salahuddin
“And that’s actually a great point because while it is considered an expense mostly, it doesn’t have to be. I’m not gonna call it a revenue generator, but it certainly can be a drastic cost saver if you do it right. Some of my clients, they’re Fortune 100 firms. The way that they use it is basically, again, it’s part of their culture to change the way people are thinking about it.” –Koharki
Efficiency in Approving Security Projects
“So when you talk about tougher economic conditions, it really helps them understand how to build a strong case around ROI so that when funding gets tight like it has now, they have a much better chance of justifying it. Because what you’re seeing is a lot of companies passing on projects because they think it’s more expensive than it really is. And if these folks knew how to communicate effectively in this topic, there wouldn’t be as much inefficiency in this process, if you will.” –Koharki
“And the best thing about the financial strategy, what we’re going to cover, is that you can implement it at any time in an organization. You can take this and it applies to everybody. The internal security person, sometimes even though I’m the internal security guy, I’m still trying to sell an idea internally and understanding the financials after taking Kevin’s course, that made a huge impact to me.” –Salahuddin
Article written by Alexandra Simon.
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