RiskUKApril2017

PSIM Solutions: Procurement Advice for End Users
They seem to be doing this in two ways: first,
in regard to what their technology is capable of
achieving and, second, in relation to how much
their clients should pay for the pleasure of
having a PSIM solution installed. Indeed, this
is the other great challenge and the other
great myth: lifecycle costs.
I have a genuine fear that these hidden costs,
with particular regard to software licenses,
combined with the lack of an adequate support
service – or one that’s ludicrously expensive –
are problems that continue to be unexplained
and do our industry a tremendous disservice.
This was certainly evidenced in the survey we
ran in conjunction with Risk UK last year.
Depending on the specific PSIM system and
its manufacturer, these costs can be highly
fragmented and split into many different ‘parts’
or stages. This may be confusing to the end
user buyer, since they can include the physical
equipment cost, installation, initial software
licenses, training packages and project
management services, etc.
What’s most alarming, however, is that these
are only the ‘initial’ costs and don’t take into
account factors such as annual licence fees,
future upgrades and renewals which, when you
think of the initial capital expenditure for
implementing a system and the number of
years you expect it to be functioning, could run
into the many thousands – if not hundreds of
thousands – of pounds.
Specification: key points
In specifying a PSIM solution, and identifying a
reputable manufacturer with whom to work,
what should the end user be looking for?
Ensure the companies that are pitching to
you state, in writing, their annual fees for the
renewal of your licence and, if technical support
is provided, what it entails and what it costs
over a five-year period.
Find out whether you will be expected to pay
for system updates, too, and if so, how
frequently these updates will occur. What are
the fees? Is the cost a percentage of the initial
capital outlay?
Given the level of investment you’re making,
insist that the software will be supported for a
minimum of ten years or longer if possible.
Sweat the small print pre-contract so you
don’t expose yourself to risk that could well
end up having a catastrophic impact on your
organisation somewhere down the line. A small
number of software providers are still known to
build a ‘timer’ into their software. Worth
bearing in mind, as this automatically shuts the
software down if, for any reason, your annual
renewal payments haven’t cleared.
“Ensure the companies that are pitching to you state, in
writing, their annual fees for the renewal of your licence
and, if technical support is provided, what it entails and
what it costs over a five-year period”
Don’t evaluate a project based solely on the
initial capital cost. What might appear to be a
competitive initial cost could actually be the tip
of a very big iceberg when you rack up the
other additional costs for updates, licence
renewal and technical support. Work out the
lifetime cost. Don’t discover when you’re too far
down the line that the cost of installing the
system is lower than the ongoing annual costs.
A decision was taken early on in our
commercial history that we would never place
clients in the unenviable position of budgeting
for a capital expenditure only to find a raft of
renewal and licensing costs emerging. Cost, of
course, cannot be the only driver, but the
danger is that the cost a client is quoted isn’t
the ‘true’ cost that they end up paying when
ongoing outlays are then taken into account.
Transparency is paramount
Over the years, I’ve lost count of the number of
red-faced security managers berating a PSIM
solution provider for metaphorically holding a
gun to their head and, in effect, telling them to
‘pay the ongoing fees or we will not support
your system’. We certainly know of cases where
public bodies are now having their PSIM
systems ripped out because they cannot afford
to maintain them from revenue budgets.
PSIM solution providers must be 100%
transparent and fair or otherwise risk going out
of business on the back of an army of
disgruntled customers. Short-term opportunism
and narrow-mindedness could seriously impact
the industry’s long-term credibility.
PSIM is very much the system of tomorrow
that’s already being used to great effect in the
‘here and now’ today, but not always to the
extent that it should, or indeed by the
businesses that could benefit from it the most.
Buying a PSIM solution can be fraught with
difficulties, many of which are of our industry’s
own making. It must be said that buying on
initial capital cost alone is certainly a
dangerous way of doing things.
My best advice would be to conduct your due
diligence very thoroughly indeed. Consider the
technical implications of the risks to be
overcome and the lifetime cost of a system
rather than rushing unexpectedly into a brick
wall of hidden fees or false promises. After all,
only fools rush in where angels fear to tread.
Stephen Smith:
Managing Director of
Intergrated Security
Manufacturing (ISM)
25
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