The Cost of Cyber Security: An Ounce of Prevention or a Pound of Flesh?

Kara Mason

Mobile Computer Services, Inc. of Raleigh warns business owners of the potentially devastating costs of a successful cyber-attack.

An ounce of prevention or a pound of flesh? That is not quite how the adage goes, but the adaptation is closer to the truth than the original when applied to cybersecurity. With cyber threats, it is only a matter of time before the attacks arrive in the inbox or breach the wall of security intended to protect a business’s email, its entire network, or its cache of precious data. A less expensive solution to cyber threats is inadequate in comparison to robust managed IT solutions. Today, data is the heartbeat of a business. A data breach can destroy a small company or squeeze the life out of a new business. Insufficient cyber protection is not only dangerous; it could be deadly.

That ounce of prevention is a fractional cost of the pound of flesh that will be exacted should a successful attack be launched on an exposed and vulnerable system. When calculating the magnitude of the difference, remember the intangible but very real value of peace of mind, which is priceless.

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The impact of a cyber-attack on a small business will be felt differently than an attack on a large company. The scale of size may mitigate the effects on the large company even though the actual cost to repair, replace, and reboot may be vastly higher than the expense to the smaller business. The damage caused by a breach can put a significant dent in a business’s bottom line. Size does not matter. The attack still inflicts budgetary pain. The intensity and longevity of that pain depend on the nature and extent of the attack, the managed IT services in place to deal with the catastrophe and other less noticed impact zones.

According to one source, “The average security breach on a small business will cost about US$38,000, according to a study from Kaspersky Lab. The amount includes the costs of downtime, lost business opportunities, and the services the company will need to hire to mitigate the cybersecurity breach. Small businesses pay, on average, about $10,000 in professional services, including the hiring of IT security and risk management consultants, lawyers, auditors, accountants, and public relations consultants.”

It is manifestly evident from this summary assessment that some impacts are visible above the surface while other effects are less obvious but still very detectable on the cyber Richter scale.

Further delineating the tangential, but nonetheless profound impacts on a small business, the assessment continued, “Downtime costs for smallish businesses hover around $23,000 and lost business opportunities about $5,000. Many of the victims will spend about $8,000 trying to ensure a similar incident doesn’t happen again with investments in new staff members, cybersecurity training for existing employees, and making upgrades to its IT infrastructure.”

The average cybersecurity breach for a larger business costs about $825,000, which is more than double that of a small business. Economies of scale come into play when factoring the overall financial impact.

While the impacts of a cyberattack will be experienced differently by small and large businesses, the damage caused by a security breach can create a significant dent in a business’s bottom line, regardless of size.

What companies are required to publicly report shapes much of the popular understanding as to the cost and impact of a cyber-attack? Some examples of security breaches that make the news are payment data, personal health information (PHI), and the theft of personally identifiable information (PII). Costs related to customer notification, credit monitoring, and the possibility of legal judgments or regulatory penalties get less media attention, but they are real concerns. In response to breaches in these areas, there is a movement toward calculating “cost per record” for consumer data breaches.

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Rarely put on public display are instances of data destruction, espionage, intellectual property (IP) theft, attacks on core operations, or attempts to neutralize critical infrastructure. These types of attacks can produce more significant injuries and lead to additional costs that are more difficult to determine accurately.

Given the prevalence and impact of cybersecurity breaches, business owners and executives must consider not only the direct impact costs to their businesses but also the number of less obvious costs associated with a cybersecurity breach.

Not sure how to measure those costs of a cyber attack or are you worried your network may not be adequately protected?  Mobile Computer Services, Inc of Raleigh, NC can help. Contact MCS today to schedule a complimentary network assessment and find out if your current Managed IT Services vendor is adequately protecting your business and data or if you should consider other options for your technology peace of mind.