When was the last time you considered your cybersecurity budget? With more and more businesses transferring to an online model, many companies are transitioning to a fully cloud-reliant infrastructure system. As the modern economy moves from paper and pen to code-based solutions and system integrations, the need for cybersecurity continuously increases every day. Whether it be a SaaS business, an eCommerce storefront, or any other enterprise, a realistic and detailed examination needs to be conducted regarding your cybersecurity budget.
The average cybersecurity breach cost $8.64 million in 2020, however, proactive measures can successfully prevent many of today’s cyberattacks. Businesses are beginning to realize that cybersecurity investment isn’t a luxury or nice add-on, but rather a real investment in their financial future and internal stability.
As many businesses are assessing their budget, cybersecurity is a large area of discussion. The importance and value of Chief Information Security Officers and IT departments have never been more clear. Due to this, businesses are looking to bolster their cybersecurity presence and plan — translating to greater financial investment in resources and technology. Regardless of size and budget constraints, any business can and must find room for an active cybersecurity strategy. Due to consumer habits, economic trends, and B2B relations, digital business is unavoidable. The future is now, and businesses will continue to see the worth and value of cybersecurity planning.
What a cybersecurity budget provides
The issue that many businesses may run into regarding cybersecurity investment is the sense that the monetary investment isn’t impacting the business on a day-to-day basis. However, with cybersecurity, no news is good news. By investing a healthy amount in your digital security plan, you are helping provide a multi-level strategy to your business’s overall well-being. Cybersecurity isn’t a one-size-fits-all solution, it often requires a customized approach for every company. Depending on the size, industry, and technology of a company, different processes and safeguards need to be implemented to best protect from an attack.
By allocating an adequate budget, a company can improve its software security, improve its employee education, and generate provocative business initiatives.
In addition, there is the concern for compliance. In this regard, many regulations dictate the security budget. In the healthcare sector, HIPAA defines strict data privacy and security requirements to protect individuals’ medical records and other personal health information. To meet these requirements and avoid hefty fines, a cybersecurity budget must allow for the necessary tools and technologies. In the HIPAA example, this includes focusing on data classification, encryption, and lifecycle management.
Continuous risk assessments are a critical component of any cybersecurity strategy. Proactive measures must continually monitor the efficacy of security controls in their environments and make the necessary adjustments to mitigate threats. Tools and services to budget for in this category include cyber insurance, penetration testing, bug bounty initiatives, and incident response.
Cybersecurity awareness training is no longer an item on an annual mandatory compliance checklist. It is imperative that all employees are included in these thorough training lessons because many cyberattacks are the result of improper security habits by employees.
With a cybersecurity budget, any new business initiatives should take into account IT department needs and cybersecurity threats. In doing this, a business can ensure the necessary practices and measures to keep it and its customers secure. For example, marketing departments may outsource content creation to third-party vendors, or customer support may decide to store all customer support cases with an outside business. Both of these scenarios present additional risks, which need to be taken into account.
What does a typical cybersecurity budget cost?
Of course, this is a loaded question. It greatly depends on the business and the amount of data a business is holding. Not every company needs to allocate the same amount of money or percentage to cybersecurity protection, but every business does need to invest in a cybersecurity plan. Determining your business’s cybersecurity budget depends on several factors including risk assessment needs, company expenditures, and growth forecasting.
In a recent study conducted by Deloitte and the Financial Services Information Sharing and Analysis Center, their findings indicated that financial service companies such as banks and investment firms dedicate less than 1 percent of their total revenue towards cybersecurity — or between 6 and 14 percent of their IT budget.
Is that enough? Hardly.
Many companies with an internal IT department already feel short-staffed and under-resourced. The fact that multi-billion dollar companies are dedicating such a small percentage of funding to cybersecurity grossly underscores the issue at hand — and most businesses fall short in an adequate security plan and budget. With cybersecurity not receiving enough funding from large-scale companies, this issue is only magnified when you examine small businesses. A large portion of small businesses completely neglect cybersecurity, often due to budgetary concerns. However, over 40 percent of attacks target small business enterprises.
While the cost of cybersecurity may seem difficult to understand upfront, the backend results leave companies happy with their investment. In general, at least 15 percent of your IT budget should be spent on cybersecurity, with ideally more being allocated to this growing need. Cyber investments require understanding the risks you are facing (or will face), your risk appetite, and the defensive capabilities you currently have. By investing a healthy amount into cybersecurity, you are protecting your day-to-day stability and future standing. In fact, 55 percent of enterprise executives are planning on increasing cybersecurity budgets this year.
How you can afford cybersecurity services
In 2021, the digital landscape has become too treacherous for businesses not to consider cybersecurity on a daily basis. The number of cybercriminals is growing by the hour, and businesses need to begin to seriously evaluate how they plan to reduce risk. Fortunately, every business, from a Mom-and-Pop shop to a large-scale corporation can afford cybersecurity services — regardless of budget.
Whether internal or external, businesses should make cybersecurity one of their top priorities in annual budget planning. When businesses are able to make the shift in mindset, they can see cybersecurity as an investment, rather than an expenditure. By allocating a dedicated budget to cybersecurity, businesses can improve system monitoring, enhance employee training, upgrade software technologies, and more. These actions enable better protection and financial well-being for the company.
The conservation starts with talking with your respective IT department or contacting outside cybersecurity firms. Today, most businesses are lacking resources, not the availability to them. Any business can afford the cost of cybersecurity services when they weigh the potential risk of an attack. The question really isn’t how can you afford cybersecurity services, but rather, how much?
To start, a business needs to have a proactive budget approach. By looking at their yearly budget allocation, a business can identify possible areas where reductions can be made, such as operating costs or personnel hiring. By moving money from already established departments and infrastructure, a gradual increase in cybersecurity budget can be built — without diminishing the efficiency of those other department areas.
Next, businesses need to evaluate their cybersecurity options. Not all services are the same or are they priced equally — or fairly. If you house an internal security team, determine what improvements need to be made and what technology is needed to make it happen. From there, you can decide the most cost-effective way to achieve those goals. If you are looking for external cybersecurity resources, shop around to find a competitive price and personalized plan for your business. Keep in mind, that paying for the lowest-priced provider or service isn’t always a good idea.
Finally, make it a point to raise revenue goals with the intention of a majority of the profit going towards cybersecurity investment. Affording cybersecurity service isn’t a race, but instead a continuous build over time.
Ready to invest in cybersecurity?
If you’re looking for more guidance on how to move your cybersecurity program forward, CDG can help. We are shifting the cybersecurity consulting paradigm to address the needs of mid-market, cloud-native or cloud-reliant companies who are experiencing rapid growth.
Founded in 2016 by global security expert Lou Rabon, our nimble team draws on decades of experience and diverse technical expertise to deliver a full spectrum of information security advisory and implementation services on a fixed-cost basis. Our right-sized, results-driven approach will help you meet your immediate needs, but also ready you to navigate what’s ahead. Get in touch, and see what results are possible for your organization.