Category Intelligence on Security Services UK covers the following
Shortage of skilled manpower and increased costs:
The inflow of skilled manpower from other EU countries, like Poland, Czech Republic, etc., to the UK might decline. Statistics show that out of 371,266 licenses issued by the Security Industry Association (SIA), 15,000 are issued to individuals who hold the EU passports. This will lead to higher labor costs and increased labor shortage, due to increased demand. The fear of shortage is already reflected in the rising wages.
A mandatory wage rise will impact salaries, which account for close to 80% of the total cost structure.
Clients need to look at price absorption clauses to shield them from any potential rise in prices, especially in manned guarding contracts.
The impact that the EU regulations had on manned guarding industry in the UK will get diluted in the medium term, as there will be new regulations formulated by the UK government
The possible outcomes can be extended working hours, labor unrest, insufficient training, leading to lower quality of services.
Companies outside the UK will have to pay import taxes to serve their clients in the UK after Brexit, as the EU relaxations, in terms of tax exemptions will not be applicable.
Around 35% of the UK's exports in 2016 were through services, which will face sanctions and restrictions post Brexit. Buyers might opt for regional/local suppliers.
Although it is early to forecast, in the next three–four years suppliers, headquartered in the UK, will bear the brunt of Brexit, as their market share is likely to decrease in other EU countries.
Security as a Service:
Physical security services are moving toward a system that provides more specific solutions as well as a higher level of integration and service. Instead of viewing physical security as a series of connected hardware and software systems, the industry has started to move toward system that provides more of security as a service to successfully run security operations.
Deeper Convergence of Physical and Logical Security:
The upcoming convergence of physical and logical security is an absolute certainty, which is already in progress. For example, Role-Based Access Control (RBAC) has been the predominant model for access control in the IT world of logical security, and today, this architecture is reflected in the design of leading access control systems, because it significantly reduces the cost of access management.
Shift from Proprietary to Open Hardware:
Security dealers and integrators have started to manufacture hardware that are compatible with third-party operable software. This is mainly because of the issues customers faced in the past, due to the manufacturer's negligence in updating the software or discontinued operations. The customers feel guaranteed with the invention of these open hardware, which can also be run on other third-party operating software (apart from OEM).
More Focus on Video Analytics:
The security industry has started to develop video analytics software that works in a similar way to software that analyzes numerical and text data. Instead of having a person to work through video footage, the software can work in real time to help make quick and informed decisions. This would help professionals address several challenges, such as facial recognition, forensic analysis, and perimeter protection.
Integrated Cloud Systems:
Integration of various security systems in an organization have been the trend for quite some time, and now, the cloud storage is being utilized to achieve maximum operational efficiency through integration. This not only integrates the security systems in an organization, but also provides the user a remote access to the security network, which could be used in techniques, such as intrusion prevention, which is different from intrusion detection.
It is better to enter into a master services agreement with a negotiated ‘hourly rate' structure, which can offer a level of flexibility for any unknown/undefined engagements. Under this agreement, the client could negotiate the lump sum for an engagement, once the scope is defined or could continue to work on a time and effort basis for scope definition and/or small task execution.
Under this model, buyer and supplier enter into a contract on agreed price. Mostly, used in bundled set of services together. There is a shift from fixed price model to performance-based model.
Cost Plus Pricing
This model deals with the actual costs incurred in performing a service and a profit margin. It is a variable price agreement, with fees dependent on the amount of service provided over a given time
Guaranteed Maximum Price
When the supplier runs a detailed cost estimate of the project, and thereafter presents a maximum cost for the project, prior to its execution.
Open Book Pricing
The baseline costs form a part of the contract, against which savings are guaranteed through innovation, efficiency, and value creation.
Tendering Process: In an ideal contract, the number of suppliers who are invited for presentation should be limited to three. Their track record should be proven and kept up-to-date
Reverse Auctioning: Competitive price bids can be obtained from final shortlisted suppliers, and they can be invited to a reverse auctioning process. However, the quality threshold of all the suppliers should be kept at the same level before inviting them for reverse bids. The in-depth KPIs will help in bringing on-board those suppliers whose capabilities match client requirements
Negotiation: The market for security services is fragmented, and there are many suppliers, who can perform security services at different scales. Most of the big service providers have a profit margin of 7–10%, while mid-size and small security service providers have a margin of approximately 15%. Buyers can easily negotiate with service providers, due to high competition in the industry, and there being fewer big contracts for security services
Unmanned Security: Unmanned security, or use of technology for security purposes, can bring down the total cost for security services by more than 30%. Technologies, such as CCTV cameras, building automation systems, and bio-metric security devices can cut down the total number of security personnel required for a facility, hence can result in cost savings of more than 30% in 1–2 years
Bundling of Services: In the developed markets, Integrated Facilities Management (IFM) service providers are developing their capabilities for security services. Some of them includes Sodexo, Johnson Controls and Compass group. Security services can be bundled with other soft services and can be awarded to a single service provider for cost savings.