How much should you spend on cybersecurity? (Budget, costs)
Whether or not you want to invest in cybersecurity, it isn’t an option anymore. Cyber threats are more prominent today than ever before. Businesses worldwide are being affected by cyber attacks. The results of a cyber attack are financial loss, stolen information and can take a toll on your business reputation.
Businesses should be asking not if they should invest in cybersecurity but how much. As an MSP, we are very aware of the impact of cyber-attacks on businesses without proper cybersecurity in place.
In a perfect world, we wish companies could invest significant amounts of their budget in cybersecurity to mitigate these high risks. But we know that is not realistic or practical. There are many other critical business expenses that you have to account for.
When it comes to determining how much your business can invest in cybersecurity, many factors determine this. Each company is unique, and that means every IT budget is unique. It can seem like an overwhelming decision. First, we will walk through the different components of cybersecurity programs; then, we’ll talk through the main aspects of your business that will influence your budget.
Cybersecurity Tools
Cybersecurity uses technology, processes, and practices to protect networks, devices, programs, and data from getting attacked or stolen. You should implement standard cybersecurity tools to keep your business safe: firewalls, anti-virus software, multi-factor authentication, cybersecurity insurance, cybersecurity training, penetration testing, and managed services.
1. Firewall:
A firewall is a security device that acts as protection between your internal network and outside traffic in today’s world.
2. Antivirus Software:
Antivirus software is used to monitor your network for suspicious behavior and block or remove threats as soon as they appear.
3. Multi-factor Authentication:
Multi-factor authentication, MFA, is a method that requires two or more verification factors to gain access to a resource, device, or application.
4. Cybersecurity Insurance:
Cybersecurity insurance covers your businesses liability in the event of a data breach that involves your or your clients sensitive information.
5. Cybersecurity Training
Cybersecurity training helps employees understand security issues, identify the risks, and determine how to respond to cybersecurity issues.
6. Penetration Testing
Penetration testing is a service performed by a cybersecurity firm. They will use the tools and techniques a hacker-in-the-wild would use to identify vulnerabilities before a malicious actor can exploit them.
7. Managed Services
Managed Services are a third-party hired to offer you complete management of your network infrastructure, end-user support, backup, and security.
Why are all these tools necessary?
Almost all of our essential information, documents, and credentials are stored online. As convenient as it is to have everything you need at your fingertips, it also means all your information is at risk of being at someone else’s fingertips.
Hackers are constantly finding new outlets to access your accounts and network. This means more robust security protocols are becoming more critical and heavily relied on. Implementing strategic cybersecurity tools is imperative to keep cybercriminals from targeting your business.
The average cost of a cyber attack in 2021:
According to an IBM Report, 2021 had the highest average cyber attack cost in 17 years. Data breach costs rose from $3.86 million to $4.24 million. One of the increases in cyber-attacks was due to the COVID-19 pandemic.
The pandemic forced many businesses to switch their employees to remote work. Many employees use their personal smartphones or computers that are not secure while working remotely. This makes remote workers a significant target for hackers.
IBM stated that the average cost associated with data breaches was $1.07 million higher where remote work was a factor in causing the breach, compared to those where remote work wasn’t a factor. The most common cyber threats contributing to these costly breaches were phishing and ransomware attacks.
What Determines your Cybersecurity Budget?
On average, companies invest 6-14% of their annual IT budget on cybersecurity. For example say you pay a managed service provider 5,000 a month for IT services. The amount that would go towards cybersecurity would range between $300-700 a month, a very reasonable amount compared to the potential cost associated with a cyber attack. Every business is unique, so not all cybersecurity budgets will look the same. Here are some of the different factors that should influence the amount invested in your cybersecurity.
Industry
The industry that you’re in can play a significant role in how critical cybersecurity is for your business. For example, companies that work in industries where sensitive information is prevalent should place a much higher emphasis on cybersecurity.
A company that works in healthcare managing patient records and HIPPA privacy regulations should have a great incentive to implement strong cybersecurity tools and processes.
This is similar to an industry in finance, where there is a large amount of confidential information. Companies that deal with large amounts of sensitive data would benefit from investing more into their cybersecurity budget than companies that don’t.
Risk Assessment
An excellent way to determine how much of your budget needs to be invested in cybersecurity is by receiving a risk assessment. Looking into the risk of your business and others in your industry can give you an idea of how much your budget should be for cybersecurity.
If you receive a risk assessment and your risk is very low, you likely do not need to increase your cybersecurity spending. On the other hand, if there are many risks found within your business that could result in a data breach, you will want to consider increasing your cybersecurity budget.
Age of your Systems & Technology
If your systems are becoming outdated, it is much more likely that you are at a greater risk of a cyber attack than a company that is constantly refreshing its technology. This is because old equipment can’t install the latest security applications and tools to keep you safe.
Because of this, you may need to invest more into your cybersecurity than a company that constantly refreshes its equipment. On the other hand, if you’re constantly using new equipment, you will not need to start from scratch. Most new systems and technology utilize software meant to combat cyber attacks. This means you may require a smaller cybersecurity budget to maintain a secure environment.
Why is Cybersecurity so Critical?
In the digital age, cyber threats are increasing at an alarming rate. Now there are not only individuals trying to break into your system. There are now large corporations in other countries whose sole purpose is to hack into business systems.
Whether you are a small, medium, or large business, you are likely a target. When it comes to cyber attacks, hackers are likely looking for companies that are easy to get into. The harder you make it for those hackers, the more likely they will move to another easier target.
This is why cybersecurity is so critical. The more barriers you have to prevent a cyber attack, the safer your business will be from undergoing a major ransomware attack or breach. Ensuring that you have dedicated part of your spending to cybersecurity can save you from a significant financial loss if your business were to get hacked.
Need Help Determining Your Cybersecurity Budget?
Determining the amount of money you should allocate towards your cybersecurity can be a strenuous process. It takes evaluating your current IT environment, determining your business’s risk appetite, and implementing a long-term strategy.
If you’re interested in hiring someone to discuss your existing IT infrastructure and work with you to budget accordingly, you should consider hiring an outsourced managed service provider.
As an MSP, we work with clients regularly to talk them through their security and potential risk to determine what cybersecurity they need to implement. Each business we work with has a unique IT environment and budget for IT spending.
We work with these businesses to determine a long-term budget to ensure they make the necessary adjustments to keep them secure without breaking the bank. To learn about how MSPs can help you budget for your business’s cybersecurity spending, check out this article: How Can Managed IT Support Save Your Business On Costs?