aberdeen group presents: video intelligence to secure and grow

© AberdeenGroup 2011

Video Intelligence: to Secure, and Grow

Recent Research Highlights

December 2011

$

Derek E. Brink, BS, MBA, CISSPVice President and Research Fellow,

IT Security and IT [email protected]

© AberdeenGroup 2011 2

Executive Summary

Video analytics provide organizations not only with a layer of security that can help sift through terabytes of video in seconds, but also with an increasingly rich opportunity to contribute to both top line and bottom line growth

New video intelligence analytics such as dwell time, queue line analysis and customer not present are changing the way retail operations and merchandising teams leverage video in customer-centric strategies to improve sales and customer service


DefinitionsFor the Purposes of Aberdeen’s Research …

Video surveillance refers to the monitoring, analysis and response to video data as it is being captured and displayed

Physical Security Information Management (PSIM) refers to solutions designed to aggregate, normalize, correlate, monitor, analyze and report on information from traditional physical security devices and systems, and to provide a common view of the organization's current posture as an aid to proactive situation response and resolution

Video analytics refers to solutions designed to automate the monitoring and analysis of video data, to identify and track objects, to analyze motion, and most importantly to generate alerts on exceptions or abnormal events

Rules-based refers to video analytics solutions in which algorithms for determining normal / abnormal or acceptable / non-acceptable behavior, along with pre-defined classes of objects, are programmed into the system and calibrated for the specific operating environment

Behavior-based refers to emerging video analytics solutions which process visual data without programming and calibration, learn and define normal versus abnormal behavior based on its observations, and self-adjust over time


Business Context:Value Chain and Market Trends in Video Security

RiskManagement

Physical SecurityInformation Management

Video Analytics

Video Surveillance

Video Cameras DigitalAnalog


Business Context:Value Chain and Market Trends in Video Security

RiskManagement

Physical SecurityInformation Management

Video Analytics

Video Surveillance

Video Cameras DigitalAnalogIP-basedInertia against “rip-and-replace”Transitioning over (long) time

IP-basedInertia against “rip-and-replace”Transitioning over (long) time

Widely installedLeverage existing investmentsWidely installedLeverage existing investments

CostFunctionalityReliability

CostFunctionalityReliability

In camera (IP-based)At camera (plug-and-play encoders)In back-end (transmit relevant data to centralized system)

In camera (IP-based)At camera (plug-and-play encoders)In back-end (transmit relevant data to centralized system)

Remote GuardingRemote Guarding

Enterprise-wide view of riskDigital assets, physical assets, human assetsEnterprise-wide view of riskDigital assets, physical assets, human assets

CentralizedCommon view of logical and physical security postureAlerts Situations

CentralizedCommon view of logical and physical security postureAlerts Situations

Emerging standardsEmerging standards

Human AutomatedHuman Automated

Maximize resolutionMinimize impact on network bandwidth, storageMaximize resolutionMinimize impact on network bandwidth, storage

Rules-based Behavior-basedRules-based Behavior-based

AggregationNormalizationCorrelationMonitoringAlertingAnalysisReporting

AggregationNormalizationCorrelationMonitoringAlertingAnalysisReporting

Security Security + GrowthSecurity Security + Growth


Business Context: Video Surveillance

Historically, video surveillance has been primarily about forensic investigation, not real-time incident response

Forensics = reactive; “what happened” Incident response = proactive; alarms / alerts; real-time

situational management and response The human factor

Control rooms have fewer monitors than cameras Not enough eyeballs to monitor and analyze the volume of video

data that is being captured Labor costs for 24/7 monitoring are high Humans have other duties and distractions Increasingly, fines for false alarms; lower priority of dispatch for

unverified alarms So challenges with scalability, effectiveness and total cost


Business Context: Video Analytics

Purpose Monitor and analyze an overwhelming

volume of data Filter, normalize, consolidate across multiple

systems Monitor continuously Identify and track objects

Analyze motion Alert when something relevant happens

– the needles in the haystack Currently: algorithm / rules-based Emerging: heuristic / learning /

behavior-based Assist guards / operators in their decision-

making process

Challenges False positives Anecdotally, sentiments that the capabilities

of traditional video analytics solutions have been oversold

Recall Aesop's moral: even when liars tell the truth, they are never believed.

Confusing terminology; a.k.a. Smart CCTV Object Tracking Intelligent Video Video Content Analysis Behavior Recognition

Applications (illustrative) Unattended luggage Illegal parking Loitering Object removal Line crossing / virtual tripwire Wrong direction / counterflow License plate recognition Facial recognition

Customer Counting Dwell time Queue line analysis Customer not present


Technology Adoption Trends: Video AnalyticsCurrent Use (by Maturity Class), Current / Planned / Evaluating (All Respondents)

45%

13%

7%17%

21%

20%

15%

8%

20%All Respondents (2Q11)

All Respondents (1Q10)

Laggards

Industry Average

Best-in-Class

Percentage of Respondents (N=105)

Evaluating Current Use Planned Use < 12 Months

• Architectural choices about the location of video analytics (in the back-end, in the camera, or in between) include considerations of resolution, storage, and network bandwidth; in the back-end is currently the most predominant, for the participants in Aberdeen’s study

• Architectural choices about the location of video analytics (in the back-end, in the camera, or in between) include considerations of resolution, storage, and network bandwidth; in the back-end is currently the most predominant, for the participants in Aberdeen’s study

Leading performers are nearly 6-times more likely than lagging performers to implement

Year-over-year increase in plans, evaluations


Drilldown – Aberdeen’s Research FindingsVideo Analytics Users Exhibit a Highly Effective Force Multiplier

Effectiveness and Scale

All Respond

ents

Video Analyti

cs Users

Video Analytics Non-Users

Video Analytics

Delta

Average points of observation 1,300 2,180 4403.4-times

more

Full-Time Equivalent employees

98 108 891.2-times

more

Average points of observation / FTE employee

13 20 5 4-times more

Alerts requiring evaluation and action(typical 30-day period)

260 518 3515-times

more

Average alerts per day 8.7 17.3 1.215-times

more

• Based on Aberdeen’s analysis of 48 current video analytics users and 52 non-users• Video analytics users are able to support 4-times more cameras per FTE employee and 15-times more alerts per day requiring evaluation and action

• Based on Aberdeen’s analysis of 48 current video analytics users and 52 non-users• Video analytics users are able to support 4-times more cameras per FTE employee and 15-times more alerts per day requiring evaluation and action


Drilldown – Aberdeen’s Research FindingsVideo Analytics Users Support Significantly Higher Scale at Significantly Lower Cost

Effectiveness and Scale

All Responden

ts

Video Analytics Users

Video Analytics Non-Users

Video Analytics

Delta

Annual cost (FTE) ($K) $3,520 $3,890 $3,200 22% more

Annual cost (non-FTE) ($K)

$430 $590 $2902-times more

Total annual cost ($K) $3,950 $4,480 $3,490 28% more

Annual cost / point of observation (FTE)

$2,710 $1,790 $7,290 75% less

Annual cost / point of observation (non-FTE)

$330 $270 $660 59% less

Total annual cost / point of observation

$3,040 $2,060 $7,950 74% less

• Video analytics users have invested twice as much in enabling technologies and modestly more in FTE staff; for a total annual investment of about 28% more than non-users• However on a per-camera basis they are spending 75% less on FTE and 59% less on enabling technologies, successfully supporting higher scale while spending 74% less overall

• Video analytics users have invested twice as much in enabling technologies and modestly more in FTE staff; for a total annual investment of about 28% more than non-users• However on a per-camera basis they are spending 75% less on FTE and 59% less on enabling technologies, successfully supporting higher scale while spending 74% less overall


Video Analytics: Summary of Key Benefits

Better surveillance Higher probability of detection Lower rate of false alarms Automated video monitoring

Filter out irrelevant information

Better intelligence Provide operators with data to

make decisions "Actionable" data

(Information Technology) “Situational knowledge”

(public safety) “Total domain awareness”

(homeland security) “Customer-centered insights”

(retail & banking)

Reduced cost More cameras / FTE staff Lower total cost / camera Free up FTE resources to

allocate to other initiatives


Customer-Centric Retail BankingFast Facts from Aberdeen’s Retail Banking Research

Best-in-Class banks are at least two times more likely than all others to use real-time data to help increase efficiencies in customer-facing processes

On average, 60% of the leading performers leverage real-time data to improve their execution of customer interaction, engagement, promotions, and product innovation at the point-of-service, in comparison to just 30% of laggards

More than half (53%) of leading performers are expanding customer touch points and capabilities across all channels, compared to less than one in five (18%) of lagging performers

Including more targeted financial and wealth management products

Three of five (60%) leading performers are providing incentives to all job roles for attaining and exceeded customer service and satisfaction targets, compared to less than half (45%) of lagging performers

• "Rapidly evolving sales channel preferences and inadequate product knowledge of our branch employees are two of our biggest business pressures. The immaturity of branch IT assets and associated business processes is a major challenge for us. “ ~ IT Manager, Large Federal Credit Union, United States

• "Rapidly evolving sales channel preferences and inadequate product knowledge of our branch employees are two of our biggest business pressures. The immaturity of branch IT assets and associated business processes is a major challenge for us. “ ~ IT Manager, Large Federal Credit Union, United States


Significant Room for ImprovementAberdeen’s “Retail Banking: Five Technology Imperatives for Customer-Centricity”

Aberdeen’s research in retail banking indicates significant room for customer-centric improvement, not only in stand-alone and in-store branches, but also in non-traditional delivery channels (online, mobile banking, and call centers)

Top performers leverage processes and systems such as the following to increase mindshare and sustain relevance:

Enhance consumer insights for branch and channel employees, to increase customer engagement

Focus on customer experience in the branch and channels, to increase customer retention

Create a balance between assisted and non-assisted customer service

Build cost efficiencies by upgrading and refurbishing branches and channel operations

Integrate branch, online and mobile banking to create a differentiated retail banking model across-channels

• "The goal is about identifying customer behaviors and analyzing and measuring where they go to pre-purchase, what triggers the actual purchase, and the preferred end channel for transactions.“ ~ Marketing Director, Retail Banking, Europe

• "The goal is about identifying customer behaviors and analyzing and measuring where they go to pre-purchase, what triggers the actual purchase, and the preferred end channel for transactions.“ ~ Marketing Director, Retail Banking, Europe


Customer-Centric Retailing: Before/During/After the TransactionFrom Aberdeen’s “The State of Customer-Centric Retailing”

Determining prospective customer buying patterns, affinities, personalization, and delivery methods is a critical component to driving merchandising, marketing and pricing decisions and bottom-line success

Retailers must grab customer mindshare and appeal to the five senses of the customer before, during and after the sales process has been completed

Cost reduction and incremental revenue then become a much easier business puzzle to solve

30%

30%

40%

22%

20%

29%

17%

17%

25%

0% 20% 40%

Incorporate customer feedbackinto products and

merchandising plans

Leverage IT to improveprocesses to enable repeat and

new customers

Measure customer-centricperformance in near real-time

Percentage of Respondents (N=224)

Best-in-Class Industry Average Laggards

• "Detailed knowledge of how our customers perceive our products, our services, our promotions, and the brands in all channels give us the most important facts to decide how to be more closely personal with them.“ ~Director of Marketing, Large Specialty Retailer, North America

• "Detailed knowledge of how our customers perceive our products, our services, our promotions, and the brands in all channels give us the most important facts to decide how to be more closely personal with them.“ ~Director of Marketing, Large Specialty Retailer, North America


Before, During and After the TransactionRepresentative Processes and Systems

Before Processes and systems that enable the “pre-sale” customer

experience include layout, product location, space planning, signage, digital signage, props and displays, shelf-placement, planograms, pricing, promotions, marketing, product information, product demos, product comparisons

During Processes and systems that enable the ”during the sale"

customer experience include greeting, selling process, clienteling, cross-selling, up-selling, POS, self-service, assisted and non-assisted service, suggestive selling, order FAQ, order placement, order processing, scan and bag, order debit, credit, cash pay, cash back, gift card, order delivery, order pick-up

After Processes and systems that enable the "after sale” customer

experience include POS, customer satisfaction survey, consumer research, customer feedback loop, returns, exchanges, and manual customer feedback loops

• "Customer-centricity and customer experience management is embodied in our vision of creating a lasting experience. Customer satisfaction leads to trust of pricing and product, and hence further business growth.“ ~ CIO, Large Retailer, Asia / Pacific

• "Customer-centricity and customer experience management is embodied in our vision of creating a lasting experience. Customer satisfaction leads to trust of pricing and product, and hence further business growth.“ ~ CIO, Large Retailer, Asia / Pacific


Integration with Video / Video Analytics is EmergingFrom Aberdeen’s “Top 10 Technologies at NRF 2011”

4. Data and Analytics: Deeper Customer / Shopper Insights

Customer or shopper knowledge remained front and center in NRF retail discussions. Retail customer or shopper data is an enormous source of information that retailers have yet to fully leverage. Case studies of leading retailers such as Lowes, Wal-Mart, Target, Best Buy, and Chico’s FAS indicate that these companies are successfully using their data about customers and leveraging it for actionable intelligence every day in stores, web stores, call centers, warehouses, and with suppliers

Aberdeen’s research indicates that deeper customer analysis is both a major challenge and an imperative due to the enormity of data from different channels. Retailers are seeing repeat customers and the best margins by addressing deeper and more segmented customer analysis. More than half (51%) of leading retailers are leveraging customer analytics as well as predictive customer insights to drive retail success

Solution providers have shown a strong intent towards innovating for increased customer-centricity in 2011 … including partnerships designed to enable retailers to correlate data from security systems, including video, video analytics, access control and intrusion detection

• Retailers with Best-in-Class customer-centric processes and technologies deliver consistently higher customer conversion rates, response, frequency, gross margins, and retention rates• Retailers with Best-in-Class customer-centric processes and technologies deliver consistently higher customer conversion rates, response, frequency, gross margins, and retention rates


DemonstrationDwell TimeMaximize the success of displays and promotions with intelligent monitoring of Dwell Time

Actionable Intelligence:•Improve Customer Experience•Analyze Promotion Display Effectiveness

Queue Line AnalysisIdentify when a line gets a certain length or there are more than a pre-defined number of people present

Actionable Intelligence– improve customer service by automatically monitoring line lengths and adjusting staffing needs to accommodate more customers

Line QueuingTeller Line 2


Summary: Video Analytics Yield Demonstrable Business ValueTo Secure … and Grow

Although certainly made possible by the ongoing evolution and innovation of enabling technologies, the real impetus for moving video security initiatives to a higher priority should be the demonstrable business benefits as identified in Aberdeen’s benchmark research:

Better protection of the organization's physical assets and people, alongside the protection of its digital assets

Faster, proactive responses to alerts, incidents, and events related to physical security

Lower operational costs, effectively multiplying the existing guard force and increasing the resources available for other important initiatives

Sustained compliance with internal policies and external regulatory requirements

Improved collaboration between logical and physical security teams, towards an integrated, enterprise-wide view of risk

Emerging opportunities to improve productivity and growth in retail operations

In addition to the tangible benefits of greater effectiveness and higher scale at lower total cost as identified in this study, the capabilities noted above are sustainable advantages for any organization looking to compete successfully in the global economy


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© AberdeenGroup 2011

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Research

Derek E. Brink, BS, MBA, CISSPVice President and Research Fellow, IT Security

[email protected]