This Guide to VBI is designed to answer common questions you have about this rapidly growing technology. It will demonstrate to you what VBI is and how it can help your company. It will also show you how to select the right VBI system for your needs, and what investments are required for success. It will also explain: • How VBI can support loss prevention • How VBI is helping business operations to become more effective • The role of VBI in merchandising • How VBI works within overall risk management • The return on investment for VBI • Typical deployments of VBI • So is VBI for you?

1.
Beginner's Guide to
Video Business
Intelligence
(VBI)

2. Beginner’s Guide to Video Business Intelligence (VBI)
March 1, 2014
Page 1
Beginner's Guide
to Video Business Intelligence (VBI)
Contents
Why Read This Guide On VBI? ............................................................................................................... 2
VBI Defined ............................................................................................................................................. 2
Who Uses VBI? ....................................................................................................................................... 3
How Can VBI Support Loss Prevention? ............................................................................................... 3
How Is VBI Helping Business Operations To Become More Effective? ................................................ 4
The Role of VBI in Merchandising .......................................................................................................... 6
How Does VBI Work Within Overall Risk Management? ...................................................................... 6
The Return On Investment For VBI ........................................................................................................ 7
Typical VBI Deployments ....................................................................................................................... 7
Why Is VBI More Relevant Today Than Ever? ....................................................................................... 8
Is VBI For You? ........................................................................................................................................ 9

3. Beginner’s Guide to Video Business Intelligence (VBI)
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Why Read This Guide On VBI?
The security industry is going through a major transformation. As it moves from systems which require a
lot of human intervention into a more streamlined delivery process, it also provides for enhanced ways
to view security, marketing and operations. This is particularly relevant for retail deployments, where
technologies typically associated with security can be very easily used to help improve overall business
performance.
From its inception, closed‐circuit television (CCTV) was primarily used to review recorded data. As its use
progressed, alarms were integrated in with video, which created actionable intelligence. Data was then
integrated with video and information was extracted from the metadata video. That was the tipping
point.
What drove this? It was innovation. It was the digital chip. It was the digitalization of video and the
integration of video analytics. It was the Internet and IP, the ubiquity of bandwidth, the robustness and
the magnitude of that bandwidth, and finally the cost reductions both in storage and transmission
technologies. With all of this advancement, a perfect storm was created to allow new solutions to be
engineered.
Technologies that aggregate the vast amount of disparate data—video data, transactional data,
structured and unstructured data—that is generated today, and distils that data into relevant business
intelligence that can be easily understood and acted upon; that’s VBI.
This Guide to VBI is intended to provide readers with an overview about this emerging technology. It will
clarify what VBI is and how it can create actionable intelligence. It will also explain:
• How VBI can support loss prevention
• How VBI is helping business operations become more effective
• The role of VBI in merchandising
• How VBI works within overall risk management
• The return on investment for VBI
• Typical deployments of VBI
• If VBI is for you
VBI Defined
Video Business Intelligence (VBI) software captures, compiles and disseminates data from disparate
systems presenting the aggregated results through intuitive dashboards, reports and portals. VBI serves
as an information infrastructure capable of delivering specific and actionable business intelligence to
users enabling them to make informed, effective and timely decisions about their business, assets and
employees.

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As its name implies, Video Business Intelligence has at its core the ability to fuse video data with
structured data, typically the only data analysed in more traditional Business Intelligence (BI) solutions.
This unique approach enables users to grasp the impact human interaction has on their businesses.
Extensively used in retail applications, VBI’s advanced algorithms enable users to leverage their video
surveillance infrastructure to gain visual insight and context behind other data captured from Point‐of‐
Sale (POS) systems, access control devices, central monitoring stations, and exception reporting
modules, to name but a few.
With VBI, the role of video surveillance has evolved from solely a loss prevention tool to a valuable asset
that can be used by the entire organization to help optimize retail processes and improve business
efficiencies.
Who Uses VBI?
Today VBI is primarily used by retail organizations, but other industries such as industrial automation,
education, finance, and the transportation industry are also experiencing the advantages this technology
provides.
How Can VBI Support Loss Prevention?
Video surveillance has played a pivotal role in loss prevention for years. To many, video is seen as an
essential component to any effective loss prevention initiative. By integrating an organization’s business
systems with video and advanced video analytics; detection, classification and tracking of video content

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can provide administrators real‐time alerts and visual (as well as audio) verification of events without
the need to add additional hardware components.
The ability to effectively detect and deter cashier‐related shrinkage is a top priority for retailers
worldwide. Research has shown that employee theft remains the single largest cause of shrinkage in
retail environments today.[3] Millions of dollars disappear from Point‐of‐Sale (POS) terminals in retail
stores on a daily basis due to fraudulent or criminal employee activities. One way that retailers are
confronting this epidemic is by identifying the telltale patterns of these crimes—so‐called POS
exceptions. POS exceptions are transactions that differ from the norm. These can include:
• Manually entered values, which could be an indication of system manipulation
• Product return transactions with no item present, no customer present, or no supervisor
present
• No‐sales when the cash register is opened but no transaction is registered.
The art of identifying and capturing these exceptions is the basis behind exception‐based reporting.
Incorporating video data as a complement to the transactional data captured by the typical POS system
elevates the effectiveness of these tools by delivering both video images and textual data resulting in a
more complete picture of any event or transaction in question.
By establishing a set of user‐defined exception‐based rules, Loss Prevention (LP) managers can receive
real‐time alerts anytime that events or actions fall outside of these parameters. In this way, Loss
Prevention can not only increase its effectiveness, it can begin to transform itself from a reactive to a
responsive, proactive resource for the entire organization. Now, LP departments can leverage relevant
transactional data (including cash register, time of day, employee number, dollar amount, exception
kind, and transaction type) and associated surveillance video to identify trends and capture details that
can lead to improved loss prevention, as well as increased operational efficiencies and overall store
performance.
Aberdeen Group research indicates that 76% of top performing retailers use some form of data mining
and exception‐based reporting tools to help build a knowledge culture around loss prevention. [4]
By leveraging technology and proactively driving the investigation the user can actively uncover errors,
inefficiencies, and questionable or dishonest practices. As a result, detection occurs sooner allowing for
a quicker response and a more timely resolution of the issues encountered. This enhanced
responsiveness and effectiveness to loss prevention initiatives is not only reflected in the organization’s
bottom line, but in the Loss Prevention department’s financial validation, as well and opens the door to
new in‐store research methods.
How is VBI Helping Business Operations Become More Effective?
Video analytics is a natural extension to video‐supported exception‐based reporting, and is not limited
only to loss prevention activities. Video analytics can help increase operational and employee

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efficiencies using video that the user may already collect. Examples of a few of the benefits that can be
gained by enabling video business intelligence along with appropriate video analytics include:
• Alerting store managers when queues exceed pre‐defined thresholds at tills or customer
service kiosks, allowing for rapid response in reallocating employee responsibilities to ensure
optimal customer service.
• Monitoring the number of people entering or leaving the store during specified time periods
to determine ideal staffing levels.
• Receiving real‐time alerts when aisles or exit ways are obstructed to immediately asses and
remedy the situation.
Video analytics can also be a valuable and effective tool helping users detect gaps in staff training or
store management. They can also assist in elevating awareness of outstanding employee behaviour
providing the opportunity to acknowledge and praise good
performance.
Operations can optimize staffing to match customer traffic,
and traffic counts (people counting) combined with POS
data can be used to calculate conversion rates. For
customers, satisfaction is increased with more efficient
service which can expand sales opportunities, optimize
store performance and overall operational efficiency and
profitability.
In retail environments, some stores perform better than
others. And, over time, any given store can have variances
in day‐to‐day sales. With the right insight, which can often
be provided through the use of video business intelligence,
managers can view analytics to determine why certain
locations are not performing as well as others. Perhaps
there is not enough stock available on shelves, or employee
break or lunch times are not well scheduled, leaving
customers underserved during prime sales times. No
matter the reason, linking this information with other
available store data can assist in uncovering problems and
opportunities.
Weather can be a major influence on store traffic. VBI can
even capture weather history as a data point when
assessing outliers in traffic data.
Operations departments have, with VBI, “single pane”
awareness through user‐definable dashboards and reports
assisting them in reviewing the health and viability of their
organization. The use of these analytics then allows them
to make well‐informed, critical decisions in a timely matter—decisions based on data, not assumptions

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The Role of VBI in Merchandising
Video Business Intelligence can also serve as a valuable business tool for Marketing and Merchandising
departments. Several ways that these areas can benefit include video analytics and video business
intelligence that can be enabled to include:
• Assessing the time shoppers linger in front of an end‐cap or promotional poster to gauge
customer interest in the product or offer.
• Identifying traffic patterns to determine where customers are congregating in the store, or
conversely what areas of the store have little traffic to better organize store layout and
arrange inventory.
By using the analytics already captured, Marketing can access metrics to analyze not only customer
behavior, but also the promotional effectiveness of marketing campaigns. Was a new ad or promotional
offer successful in bringing people into the store? When they came in, where did they go? Was the
promotional item they were searching for placed in an optimal location?
Marketing can even combine this information with POS data to calculate conversion rates, once again
utilizing an asset traditionally dedicated to Loss Prevention into a corporate asset that can increase
sales. This enhanced understanding of buyer’s behavior provides users with critical insights when
designing marketing and promotional materials to optimize merchandising activities.
Merchants can additionally analyze store traffic to identify patterns, gaining knowledge on premium
areas for product placement. Locations that are not attracting customers can also be identified. This
information can be invaluable when negotiating with consumer packaged goods companies which pay a
premium to obtain the most desirable shelf space. Captured intelligence also serves as proof for
management that displays are up, product is placed and stocked at optimal levels, and signage is clear
and unencumbered.
How Does VBI Work Within Overall Risk Management?
The value that video business intelligence and video analytics can provide in the area of risk
management is extensive. While the data captured by the surveillance system can be leveraged outside
of the parameters typically viewed as Loss Prevention, the core responsibility does remain protecting
the assets of the organization; and one way to accomplish this is through the appropriate management
of risk. Organizations can benefit by enabling functions to include:
• Capturing data that identifies behaviors or patterns that create risk for the organization,
employees or patrons such as blocked exit areas enabling staff to quickly respond to
conditions requiring attention.

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• Bringing visual (and audio) verification into the equation when conducting an audit to see first‐
hand what actually transpired; especially valuable when confronted with a costly slip‐and‐fall
claim or an employee accident.
• Receiving alerts on loitering activities taking place either inside or outside of a store to ensure
quick response, which may assist in eliminating possible theft or damage to property.
The financial losses that can occur from fraudulent claims, lawsuits, or insurance payouts may devastate
a business operation. In cases where an accident has occurred, proper investigation is aided by clear
identification of the severity of the situation, who (or what) is responsible, and what action needs to be
taken. Liability may also be minimized if it is determined that the accident was staged. Using video
business intelligence in conjunction with video analytics allows the organization the ability to mitigate
risk through the discovery of situations where corporate adherence is not present or fraudulent
activities are taking place.
The Return on Investment for VBI
Those organizations utilizing advanced video analytics find that their return on investment can be
increased through noticing, and acting upon, activities that create shrinkage. By proper implementation
of recommended actions, Loss Prevention managers often find that the payback of such systems may be
obtained rapidly through the lessening of employee or patron theft.
Managers no longer have to look for data, or make assumptions on the reasons for shrinkage, the
information is provided to them through the capture of real, actionable data based on facts. For
marketing and merchandising purposes, trend data allows the ability to predict or identify anomalies
that can then be analyzed to assist in determining the effectiveness of marketing and merchandising
campaigns; providing a valuable tool in planning future activities to strengthen sales.
Typical VBI Deployments
Video Business Intelligence has been widely deployed in a number of large retail organizations, where
capturing and understanding data is used to provide valuable and actionable insight. Just an example of
the companies that have embraced its use, and the considerable insight that is provided include; Nike
USA, Sterling Jewelers, Home Depot, and 7‐11 to name a few. Beyond the retail sector, VBI applications
are being embraced by a number of industries such as transportation, financial services, public safety
and educational institutions.

9. Beginner’s Guide to Video Business Intelligence (VBI)
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Why is VBI More Relevant Today Than Ever?
Research conducted in the area of Video Business Intelligence in 2013 confirms that Chief Financial
Officers continue to emphasize business intelligence (BI)/analytics and business applications as top areas
for investment and focus. As reported in a joint study conducted by Garter, Inc. and Financial Executives
International (FEI) it was shown that 15 of the top 19 businesses processes that CFOs identified requiring
improved technology support may be addressed and/or improved with investments in these areas.[5]
The business intelligence market (including data warehousing and CRM analytics) is growing faster than
other areas of the enterprise application arena at approximately nine percent annually. Valued at $57
billion in in 2010 ($30 billion from business intelligence services, $10.5 billion from BI
platforms/analytics and $10.5 billion from data warehousing), and allowing for the predicted growth,
the BI market could increase to $81 billion by 2014; and if current trends continue a market worth as
much as $136 billion could be expected by 2020 . As noted by Gartner Analyst, Rita Sallam,
approximately 30 percent of users currently deal with analytics, but growth is expected to rise to around
50 percent by 2014 and could reach 75 percent by 2020.[6]

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Is VBI For You?
Use this worksheet to determine if your company is ready to use VBI.
For each category, select the appropriate number. If you strongly disagree, choose 1. If you strongly
agree, choose 5. The numbers in between 1 and 5 correspond to your level of agreement, neutrality, or
disagreement. Add up your score when you’re finished, and follow the instructions at the end.
Factor Disagree Agree
1 2 3 4 5
Loss prevention is a major focus for my organization as
shrinkage is a problem.
We need more insight into where shrinkage is occurring.
We need clearer reporting back to management on our
activities to stem shrinkage.
We need more intelligence on what video to watch.
It would be impossible to respond to every alarm we
generate.
We use contracted security services, and are finding that we
have a high turnover of contracted staff.
We would improve the perception of security if we were able
to play a bigger role within other areas of the business.
We would like to ensure our investment in security systems
offers value outside of security and loss prevention.
Security within our organization is very reactive.
We need to ensure more is done to prevent organizational
risk such as fraudulent claims and litigation.
To interpret your results, add up your score.
• If you scored > 35, you’re ready for VBI.
• If you scored between 20 and 35, you’re moving in that direction. You should consider getting
started with VBI very soon.
• If you scored under 20, you may not be ready for VBI quite yet. But that doesn’t mean you can’t
keep reading!
Regardless of your score, there’s good news: Where you are now is exactly where you need to be in
order to get more from your security investment. Why delay? Call 3xLOGIC and See Your Business
Differently™.
6510 West 91st
Avenue | Westminster, CO 80031
303.485.5779 | www.3xlogic.com
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