02 Aug Calculating the ROI on Security Awareness Training
ROI It’s no secret that investing in security awareness training for your employees can be costly. Even when the IT leaders in your organization understand the critical nature of such training, decision-makers in the C-Suite might not be so easily convinced. We are sharing how to calculating the ROI on security awareness training.
The key is making sure your C-Suite team understands what will be gained from implementing a security awareness training program. It is important to make it clear what the short- and long-term risks are that can be avoided with the proper security training in place.
Lack of Security: Calculating the Cost
Following are the critical areas on which to focus when calculating the return on investment (ROI) on security awareness training:
- How much could a lack of security potentially cost the business?
- What effect does security have on current organizational productivity?
- What is the potential impact of a catastrophic security breach?
- How would the recommended solutions impact productivity?
- Are these recommendations the most cost-effective solutions?
You should ensure your investment is considered on a risk basis. How does a lack of security impact the business? According to the Ponemon Institute, the average cost of a data breach is $3.8 million. The stakes will only continue to grow as data breaches increase in frequency and severity.
Although the average cost to deploy security automation is $2.88 million, without cybersecurity solutions, a company could risk up to $4.43 million in breach costs. For some organizations, this is a number that could be detrimental to their business and their reputation. Beyond the finances, there are other consequences you could suffer without proper security:
- Customers’ and employees’ data may be compromised
- Intellectual property or trade secrets may be stolen
The organization’s reputation could be irreparably damaged. Ninety percent of CEOs say that striving to rebuild commercial trust after a breach is one of the most challenging tasks to achieve. Keep these consequences in mind and understanding the financial implications.
How to Calculate the Return on Your Security Investment
ROSI (%) = (ALE-mALE) – Cost of Solution ÷ Cost of Solution
How does it work? The equation quantifies an investment’s impact on the bottom line. What do the separate components mean?
To start, “ALE” is the Annual Loss Expectancy, or the total loss from incidents involving security. You can find the ALE by multiplying the Annual Rate of Occurrence, or ARO, by the SLE, or Single Loss Expectancy. The annual rate of occurrence is defined as the “probability of a security incident occurring within a year.” In contrast, the SLE is the “total financial loss from a single security incident.”
Modified Annual Loss Expectancy, or “mALE,” is the annual loss expectancy plus the savings your security investment will provide. This number will “represent the percentage of threats halted by the security solution.” For example, imagine that your security solution has an average annual investment of $100,000 to fix twenty security incidents that result in $12,000 in data loss. The security solution you choose will block 99% of cyberattacks from entering your organization. How does the equation look with these components?
ROSI = ((20 x 12,000) x .99 – $100,000) ÷ $100,000
This ROI formula shows that the return of investment is 137.6%, or about $138,000 each year. This equation clearly shows the value of helping to prevent breaches with security awareness training. Allowing you to protect your organization from potential security threats that can cost thousands in downtime and data.