Estimating the ROI of Your Business’s Data Protection Plan

Justifying expenditures on cyber security can be difficult for some decision makers. Most business owners want to invest in products and services that yield tangible results and have a very clear correlation with increased profitability.

The problem with spending money on cyber security is that the focus isn’t on increasing your cash flow or reducing expenses that you see every day. The purpose of cyber security purchases is to prevent a massive financial loss from a single, unexpected incident.

On the surface, this makes it sound like it is very difficult to estimate the ROI of your cyber security. Nothing could be further from the truth. When you look at the estimated potential loss of a cyber-attack, you will see that the ROI is very easy to calculate. It is also very easy to defend your decision to invest in cyber security solutions.

Calculating the expected value of your cyber security solutions

Estimating the expected value of your cyber security solutions is actually very easy. You just need to know the following two variables:

  • The likelihood that your business will be the target of a cyber attack
  • The expected loss of a successful attack

Global average is for both of these figures are easily available. A stunning 61% of all small and medium size businesses have been targets of cyber attacks. The average attack that was successful costs these businesses a whopping $2,235,000!

Now you just need to do a simple expected value calculation, which you should have learned in business school. You just need to multiply the probability of the event by the outcome of the event happening.

This figure shows that the expected cost of a cyber security breach is $1,363,350. This means that if you are able to develop a cyber security solution that prevents an attack, then it will be worth well over $1 million.

You also need to consider the cost of restoring data if you are lucky enough to survive. The good news is that developing a cyber security solution involves having a strategy to do so. If you read the R-Studio Review, you will see that there are cost-effective solutions to do so.

Is this figure for real?

Many people who read this statistic have a difficult time believing it. They can’t possibly fathom that the average cyber security tech that is successful would cost nearly $2.5 million. The idea that cyber security solutions are worth over $1.2 million seems even more unfathomable.

Unfortunately, the statistics are very real. If you are still skeptical, then you need to look at the number of businesses that fail due to poor cyber security.

In previous articles we’re pointed out industry statistics showing that over 60% of small businesses that are victims of a cyber security breach are forced into bankruptcy within six months. We were skeptical at the time. However, after reading more about the cost, it is very clear that these statistics are very consistent. If most businesses fail after a cyber attack, then it is obviously clear that those attacks are incredibly expensive. The average business cannot survive a loss exceeding $2 million.

This means that you need to make investing in cyber security one of your number one priorities. It may be tempting to funnel that money into research and development or new marketing campaigns to penetrate new markets. However, the opportunity cost is far too high. If you happen to be one of the companies that is targeted by hackers, then it is almost inevitable that your company will be filing for bankruptcy within the year.

Don’t leave the fate of your business to chance. Have a solid line of defense against cyber criminals that came to destroy your livelihood.

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