Effective security and risk management/individuals can add significant value to a business in emerging markets. Regrettably, the majority of executives and managers have only experienced “security purists”, that limit their expertise and support to the business in forms more associated with “guns, guards and gates”. The result is the general assumption that security/risk management is purely a cost centre, rather than the more effective result of benefiting from a security/risk management framework that is a profit centre. Smart businesses yield greater and faster results via advanced security/risk management strategies.
“Variance on return” is a key area where security/risk management plays an essential role in emerging markets. This is where a combined strategic and tactical implementation approach yields a much higher return/market share for the business than if purely engaging physical security solutions. For example, the establishment of a new operational hub in a new and emerging market has a forecasted return of 10% after the first 2 years, inclusive of traditional security expenditure. The business may even fail to make the initial forecasts due to ‘unforeseen delays/challenges’. However, with an advanced security and risk management overlay, the business may achieve 30% market share within 2 years, in addition to completion of initial works ahead of schedule. Furthermore, the operational budget may have significant, unnecessary expenditure when applying “security expenditure templates”, with purchase of ‘guns, guards and gates”.The variance could cost or make the business millions.
“Risk to schedule” is also another essential element to effective security and risk management. Minor or major delays to construction, start up, market entry or establishment of operations can cost the business significantly, often forcing even greater expenditure to get the schedule back on track or correct the initial errors. As these additional costs may not come from the original budget, they can be ‘hidden’ in ‘unforeseen operational costs’ when in fact they are direct losses associated to the project, in addition to loss of working capital due to the additional funding requirement.
“Security as a business” should be evident throughout a successful emerging market implementation and management plan. It should speak the language of business….numbers! Performance, return, effectiveness, transactions, profitability, reliability, etc. There should be comparisons between various operational models, detailed plans, forecasted milestones, advanced identification of hazards, delays, disruptions and potential ‘stop work’ scenarios…..before they manifest. Security and risk management should be an integrated part of the daily, weekly and monthly business operations, not a department that is not represented at senior management meetings or forced to constantly “fight for information”.
“Security” is often a profession or discipline that anyone thinks they can have a go at successfully. After all, it can’t be that difficult….?
This is a very common and dangerous trait exhibited by managers that have “security” as part of their portfolio. It can be further compounded if the organisation or individual have a legacy of dealing with physical security individuals, projects or budgets. Such projects and management is quickly identifiable by expensive and unnecessary procurements, excessive vendor invoicing, idle equipment/resources and ineffective use of manpower. Even worse, a laundry list of tasks and functions carried out by “security” personnel, as a result of countless administrative demands, a sense of keeping security personnel busy or generally just assigning work to security departments that all other departments don’t want to do. Again, this results from a lack of experience, viable alternatives or effective and profitable security/risk management leadership.
Emerging markets still present the most exciting and profitable opportunity for businesses of all shapes and sizes. Part of the reason businesses succeed or fail in such environments is due to successful or inadequate security/risk management strategy, tactics or individuals. If you can’t identify advanced systems, strategies or individuals within your emerging market strategy…..you are more likely to experience the negative aspects and likely losses associated with other professions where the use of poor tools and equipment results in sub-standard results or significant losses. These are just a very small sample of the type of issues and considerations applicable to emerging markets.