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Case Study: The ROI of Digital Video Surveillance

Allen Rude, security manager at Intel, invested more than four years in an ROI study to justify the cost of digital video surveillance

Instead of asking IT for support for DVR surveillance, as he had tried and failed to get for years, Rude played it coyly. He simply asked the IT department to benchmark some new technology and applications that, he mentioned with an air of inevitability, were landing in IT's network whether or not IT supported the project.

"I told them, 'We'd prefer it if you did support it, but the project's going forward, so you need to tell us what the bandwidth consumption will be,'" Rude recalls.

IT capitulated to the benchmarking, and that was the turning point. They were surprised to find that the bandwidth consumption wasn't as absurd as they assumed it would be. "There was this fear of the unknownâ¬this assumption about what video would do to the network," says Rude. "They began to see it was just another app, and they said, 'Oh, we can absorb this.'

"I've learned what you present to them and what they hear are two different things," Rude continues. "We weren't talking about putting cameras with live feeds streaming over the network. We were talking about DVRs, data collection devices. But all they heard was, 'We're going to put cameras on the network.' I just had to control the message."

Though it took far longer than he anticipated, Rude and the IT department now have a good working relationship, and have started some other video surveillance benchmarking projects together.

Phase 3: 2003 to 2005—Hard ROI

The pilot went well, but Rude knew he still had a major problem in proving ROI: capital investment. Though the DVR systems performed better, they also cost more. For a long while, Rude couldn't get the numbers to a point where the return in performance made up for the pool of capital required to get the digital system up and going.

"Even with better technology and performance, we've got to be able to save money before they let us do it," says Rude. "And that was the hardest part. It took over two years, working with suppliers and, frankly, waiting for prices to come down."

Rude says that many of the small vendors in the digital video surveillance space haven't reached commodity stage yet, meaning they're still trying to recoup R&D dollars. That means higher prices. But it wasn't the only problem he faced.

Rude laughs when he recalls how many vendors would downplay the price of computers when working with him on a way to make their systems economically viable. "They had this idea that we were Intel, and we could just go grab computers in the back room for free or something." They also never took into account the cost of operating and maintaining the equipment, only the cost of buying it. Other vendors simply discounted Rude's entire ROI exercise. "They'd say, 'You're Intel. You've got so much money. Just buy the stuff.'"