In a world where cyberthreats like phishing scams and ransomware attacks are commonplace, it’s more important than ever for organizations to invest in cybersecurity. But how much should you be spending on cybersecurity tools and services? Unfortunately, there is no easy answer to this question. Every business is different, and the investment needed to adequately protect your data will vary.
Even with the foundational elements, your industry and business operations will all play a role in determining what your budget should be composed of. Below are the most vital elements to consider when setting a cybersecurity budget.
What is the Industry Standard?
Most organizations spend 6% of their revenue on IT, consisting mainly of infrastructure investments, operational expenses, IT services, staffing costs, innovation projects, and cybersecurity measures. This implies that the average company may end up only allocating 1% of that budget to cybersecurity. However, don't assume this is a hard and fast rule; cybersecurity budgets may vary greatly depending on the industry.
Some industries may be more susceptible to cyberthreats than others because of the nature of the sensitive data they process and store. For example, healthcare organizations are often an appealing target for hackers because they handle a large volume of medical data that could either be sold on the dark web or used to extort money.
Meanwhile, other organizations may also need to comply with specific regulations like the Defense Federal Acquisition Regulation Supplement (DFARS) or the Health Insurance Portability and Accountability Act (HIPAA), which may require additional security investments. As a result, you need to allocate a larger portion of your IT budgets to cybersecurity to avoid costly data breaches and noncompliance penalties.
It's therefore critical to pay attention to compliance initiatives governing your industry and the security investments made by other organizations. This will give you an idea of how much you should be investing to keep up with the competition and protect your data.
What Are Your Risks and What Security Measures Are Needed?
Another important factor to consider when determining your cybersecurity budget is your overall risk exposure. This begins with a thorough risk and vulnerability assessment to identify the gaps in your security policies and framework.
For instance, the assessment may reveal that your organization is prone to data breaches due to human error. If so, you may need to invest in employee training and security awareness programs to help educate your staff on recognizing cyberthreats and the importance of following security protocols. You also need to create a comprehensive incident response plan so that you can quickly respond to any data breaches or other cybersecurity incidents. In other cases, your company may just need advanced measures like multifactor authentication and encryption software to defend against sophisticated threats.
Whatever vulnerabilities are uncovered, you should end up with a list of security solutions and services you should invest in to mitigate the risk. Working with an MSP can benefit your organization here, as they will be able to give you a cost range and timeline for implementation of the services you need. This will give you an idea of how much of your IT budget should be allocated to cybersecurity to protect your most important assets.
How Much Risk Are You Willing to Accept?
It's not always possible to invest in every professionally recommended security measure, particularly if your organization doesn't have a flexible IT budget. In these cases, you will need to prioritize security investments and determine what level of risk you are willing to accept.
If your budget only allows for a few cybersecurity measures, then you may have to invest in solutions that prioritize mission-critical systems and data while leaving the rest exposed for the time being. Keep in mind that the average cost of a data breach is $4.35 million. Companies that are unable to bear this burden may need to cut back on their IT investments and devote a majority of their budget to cybersecurity instead.
Does Your Budget Account for Cybersecurity Expertise?
It's not enough to invest in security tools and services. To truly protect your data, you need a team of experienced cybersecurity professionals who understand the ever-evolving threat landscape and have the technical expertise needed to implement sound security measures. Of course, not everyone can afford to afford the salaries, certifications, and training programs necessary for keeping a team of full-time IT experts.
A better and more budget-friendly alternative for most organizations is to hire a managed security services provider instead. Charles IT, in particular, has a team of certified cybersecurity experts who are skilled in various security disciplines, from vulnerability assessments to threat prevention to security training. Our team can ensure your data is protected while also freeing up your IT budget to invest in other areas of your business.
Get in touch with our security experts today! We'll help you develop a cybersecurity budget that fits your unique needs and puts the proper defenses in place to protect your data!