How to Plan a Cybersecurity Budget That Fits Into Any Budget
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, internal stability, and business growth.
The first step to adding cybersecurity to the budget
As many businesses are assessing their budgets, cybersecurity is a significant area of discussion. The importance and value of Chief Information Security Officers and IT departments have never been more clear, given the increasing cyber threats. 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 and create a cybersecurity budget. Why? Between 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 in mitigating cyber threats.
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 cybersecurity measures, you are helping provide a multi-level strategy to your business’s overall well-being and protection against cyber threats.
It’s important to remember that cybersecurity isn’t a one-size-fits-all solution. It often requires a customized approach for every company. Some companies may need more data protection than others, while other companies may be more focused on their security gaps. Depending on the size, industry, and technology of a company, different processes and safeguards need to be implemented to best protect from attacks and emerging threats. By allocating an effective cybersecurity budget, a company can improve many areas of its cyber resilience, including its approach to regulations, risk assessments, and employee training.
Regulatory compliance
Many regulations dictate the cybersecurity budget in certain sectors. 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 security measures and services. In the HIPAA example, this includes focusing on data classification, encryption, and lifecycle management.
Continuous risk assessments
Continuous risk assessments are a critical component of any cybersecurity spending 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.
Employee training
Cybersecurity awareness training is no longer an item on an annual mandatory compliance checklist or a simple lecture to explain the company’s security efforts. It is imperative that all employees are included in these thorough training lessons because many cyberattacks and data breaches are the result of improper security habits by employees. Effective budget allocation for cybersecurity training within the overall cybersecurity budget is crucial in preventing cybersecurity incidents. By investing in comprehensive training, companies can significantly reduce the risk of data breaches and enhance their overall security posture.
Importance of cybersecurity investment
With a cybersecurity budget, any new business initiatives should take into account the organization’s business objectives, cybersecurity needs, and cyber risks. In doing this, a business can ensure the necessary security services 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 through vendor risk assessments to ensure adequate security measures are in place.
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 to address their unique cybersecurity challenges. Determining your business’s cybersecurity budget depends on several factors, including risk assessment needs, company expenditures, and growth forecasting. By aligning the cybersecurity budget with business objectives, organizations can better mitigate cyber risks and protect their digital assets.
The current state of cybersecurity spending
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 cybersecurity budget and plan. 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 just because you’re small, doesn’t mean you can leave cybersecurity out of the budgeting process as over 40 percent of attacks target small business enterprises.
Strategic planning for cybersecurity
While cybersecurity costs 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.
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 conversation 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 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.
Looking for more guidance?
If you’re looking for more guidance on how to move your cybersecurity program forward, Cyber Defense Group 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.