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The Business Case for Preparedness
New Revenue Streams
May 24, 2008 12:23 AM
In the energy sector, integrated security generates cost savings (increased productivity, reduced losses, more efficient use of capital). In addition, new revenue streams can be created.
The business case for security in the oil industry revolves around two areas (cost savings and new revenue streams) both leading to increased cash flows and a positive ROI.
Source: "Creating a Business Case for Security in Electric Power and Natural Gas Industries", M.C. Wilhelm Associates LLC, Council on Competitiveness, 10/13/2006
Key Points:
* A major challenge for companies in the post-9/11 world is developing integrated security systems while remaining economically competitive in a globalized marketplace. Few industries are as vulnerable to terrorist attack as electric power and natural gas. Technological advances continue to make us more dependent on the energy sector, thus making security for its infrastructure more critical than ever."
* The business case for security revolves around 2 areas, both leading to increased cash flows and a positive ROI."
* First, cost savings are generated by exploring the synergies that security has with other business units and the strategic goals of the firm." Increased productivity - Security that improves efficiency in productivity." Reduced losses - In case of a security breach, a robust security strategy will reduce potential losses." More efficient use of capital - At some point, as more and more money is spent on traditional investments, they become less effective. Spending money on more advanced security investments may be less costly and more efficient."
* Second, new revenue streams are created by exploring the value that security can generate with external stakeholders."