There are many costs to consider in a security camera solution, and a lot of possible savings that can be hard to estimate.
Using a Total Cost of Ownership (TCO) approach helps you capture all costs associated with a camera system over its complete lifecycle – from installation to operation, maintenance, and decommissioning. It indicates areas to focus on to reduce costs and improve the quality of the solution – and also help you evaluate different options.
Already used in many industries as a business tool, TCOs help integrators and buyers:
It is common to estimate the total security system cost based only on the initial investment, but underestimate the costs incurred during video surveillance operation. Initial costs such as the investment in cameras, servers, software, installation, and user training are often straightforward to estimate. However, long-term costs such as maintenance, replacement, failure costs, electricity, storage, and cybersecurity are more difficult to calculate. Not to mention security system monitoring costs, which is often the biggest cost by far. A TCO approach can help you identify these costs.
TCO analyses of security camera solutions of Axis customers in USA, Brazil, Argentina, United Kingdom, France, Spain, Kenya, South Africa, United Arab Emirates and India show great variation, but also clear trends. For example, the analysis demonstrates that the costs before system start represent around 30% of the total cost of ownership, while 70% of the costs occur during operation. This conclusion is important due to the tendency of buyers to concentrate on the purchasing and installation costs, while the big potential savings can rather be found during the long-term operation of the system.
In this paper, we present a TCO model and overall experiences with TCO applications in security system installations. We introduce the concept of value created by the system, and methods on how to estimate the Return on Investment, ROI, of the system. We look closer at three case studies where the TCO and ROI concepts have been used to analyze real camera installations. The cases show a significant return on investment with a break-even occurring very quickly during the system lifecycle.
If you are interested in learning more about TCO, or to discuss a TCO analysis of your project, please contact your nearest Axis representative.