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How to Calculate a Return on Investment (ROI) of Cyber Security

4 min read

Cyber security is a minefield for many, not just in terms of its intricacies and ever-changing nature but also in its cost and how we can communicate that to others in our team. How can you calculate the return on investment of cyber security? And is it even possible?

We discuss the cost of cyber security and data breaches, giving you grounds for investing in the building of a resilient and competitive IT infrastructure. 


Is Cyber Security ROI an Exact Science?

Frustratingly, for CISOs, calculating a return on investment for cyber security is anything but simple. Using a basic expenses vs costs formula, we might come close to identifying the cost-benefit ratio of cyber security solutions. However, simple equations are far from being able to tap into the true value of cyber security (more on this later in the blog).

That said, listing the outgoings and potential savings of a solution is the first step to validating investment and getting buy-in from your team.

Consider the cost of  implementing a cyber security solution. This can include:


  • Cyber Security Support — Experts in the field employed internally or consulted externally to monitor breaches and security threats, including any training. 
  • Security Solutions — Hardware and software to help build a defence against digital threats.
  • Insurance — Protection policies cover the fallout of data breaches or digital compromises, often billed monthly.


Next, list the hypothetical costs associated with a data breach. These include:


  • Loss in Revenue — A common occurrence after an attack where service levels will be impacted and loyal customers might look elsewhere due to the data breach.
  • Loss of Data — Part and parcel of a data breach, companies will need to spend money on damage control PR campaigns and spend time retrieving and rebuilding lists and datasets.
  • Customer Costs — For existing customers, companies will need to invest in identity protection and grapple with reduced customer acquisition.
  • Ransomware Fees & Remediation Costs — In an attempt to retrieve data, some companies might decide to pay the ransom and will surely need to fork out for remediation (an umbrella term for investigating, monitoring, mitigating and recovering).
  • Penalties - As imposed by regulators. A recent example is the Bank of Ireland being fined €24.5m (£20.8m) for breaching regulations over failures to have a framework in place to ensure continuity of service in the event of significant IT disruption.


One only needs to contrast and compare the costs of cyber security solutions with the costs of data breaches to conclude spending on security solutions. Hint: the cost of cyber security solutions almost always look increasingly appealing when stacked against the hypothetical costs of a breach.

For example, according to IBM’s Cost of a Data Breach Report 2021, the average cost of a singular breach now stands at a staggering $4.24M — a significant sum that makes investment in cyber security look comparatively small. And that’s without even factoring in the intangible benefits of cyber support.


The Unexpected & Intangible Benefits of Cyber Security

We know, on the surface, how to calculate the return on investment of cyber security. But dig deeper and you’ll find that cyber security solutions, expert support and the added padding of insurance give much more than a protective barrier against grave data breach costs.

Cyber security provides much more value than first thought. Often in ways that aren’t easily shown in numbers. As a company, you could also find value in cyber security’s ability to:


Facilitate Digital Transformation Projects

With more people wanting to work remotely and more business done across borders, it makes sense to upgrade your digital infrastructure to allow for such flexibility. With cyber security defences, you can be sure your cloud environment is as secure as it can be, making use of flexible work arrangements and cross-seas collaboration on projects.

Without cyber security solutions, digital transformation is a dangerous game and, in some ways, isn’t even possible without the right technological infrastructure in place. Document sharing, remote communication and storage all become an issue without investment in cyber security. 

Sooner or later, you’ll recognise you need to consider cyber security to enable business growth. Moving away from traditional, physical firewalls to more conceptual cloud services is critical in making businesses more agile and available to trade in the modern world.


Protect Brand Reputation

The physical fallout of cyber security is bad enough without also considering its emotional impact. While we can calculate some customer costs related to cyber security, it’s difficult to quantify the gravity of a security breach and how this impacts brand affinity.

We know that it holds weight, with one in four people claiming data breached companies are a no-go.

If the public feels so strongly about pushing out companies affected by attacks, we can assume the financial impact stems much further than the initial cost of recovery and remediation. It isn’t just an isolated event; it’s what comes after. 

This takes IBM’s eye-watering average of $4.24M and puts it as a starting point, suggesting companies will continue to struggle financially even if they can afford the expense of an attack.


Relieve and Refocus Staff

Cyber security software can free up staff to work on more top-level activities by moving away from manual activities. This could be a neglected area of their role or a new post relating to business growth. Whatever the case, strong cyber security infrastructure removes manual, menial processes and makes room for other just as important activities.

Calculating the price of this is near-impossible. But as you can imagine, it has excellent potential with the best in the business available to dedicate time to transformational projects and push them out to the wider team.  

One thing's for sure; cyber security is more than just an expense. It’s an investment. And a worthwhile one at that.


Bring in New Business

Evidence is available to provide confidence that cyber security processes and requirements are being applied appropriately and are delivering positive, measured results.

Auditors, regulators and customers alike deem established cyber hygiene as important considerations when evaluating an organisation as an ongoing concern, in exercising good corporate governance and as an organisation they would choose as a supplier.


Delve Deeper Into Cyber Security Investment and Encourage Others to See Its Value

Just the tip of the iceberg for cyber security ROI, we have a lot more to say in The Information Security Investment Guide, including tips on spreading the message to others in your organisation, especially decision-makers with the power to propel cyber security initiatives. 

From solidifying your knowledge of cyber security ROI to creating a business case and presenting it to the board, you’ll be able to access all of the essential and idealistic benefits of strong cyber security sooner than you think. 

Download now by clicking the link below. 

Information Security Investment

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