Cybercrime costs are rising fast. Between 2024 and 2029, it’s expected to increase by $6.4 trillion (+69%) and peak at $15.63 trillion.
Naturally, investments are also increasing. Security workers will get more investments to keep companies safe. Any professional who protects their company will see bigger budgets.
34% of tech leaders will focus on cloud security this year. 28% want to protect data better and build trust. These are the main goals for 2025.
Security teams must now prove their spending and show how these investments pay off.
Return on Investment helps leaders find wasted resources on inefficient security tools. In essence, it makes sure money goes to processes that make a difference. Security leaders can figure out how much money they might save with new security plans. This helps them ask for more budget later. When leaders compare different security options, they can pick the ones that help their company the most. Executives use this info to decide which projects to fund first. This article shows you a model for Return on Security Investment and how to calculate it. You’ll also learn how to pick the right solution to get the most value from your money.
Quantifying Cyber Resilience
Your calculations should be tailored to your business and its unique risks.
You should be able to collect the data you need without much trouble. Getting this data should not take a lot of time or be costly. Your predictions might not be perfect, but try to make the best estimates you can. Remember that you can’t be certain about future threats.
You measure the Return on Security Investment by looking at how the investment affects the final result. Use this metric to build a strong case. This helps you explain to company directors why they need better security.
Start by gauging the Annual Loss Expectancy. This metric represents the total potential financial loss from security incidents based on a company’s historical data. It estimates the financial impact of security breaches without any security investments.
This approach is different from basic ROI calculations. It focuses on the specific risks that a security investment handles. To use it well, you must first understand your security risk exposure. Then, estimate the value of the assets that the investment will protect.
Getting the Most Out of Your Investment
The Gordon-Loeb model offers a framework for determining the ideal amount to invest in cybersecurity. It takes into account the likelihood of security incidents and the vulnerability of information.
The model suggests that companies should invest up to a certain percentage of the expected losses from a cyber attack. This gives the best return on security investment. It also shows that security spending should not go over about 37% of the expected loss. This rule applies no matter how vulnerable the information is.
Using the model, a company has data worth $1,000,000. The attack probability is 15% with an 80% chance of a successful breach. This company should not spend more than $44,000 on cybersecurity investments.
Key Considerations Before Investing in Solutions
By doing a risk assessment, an organization can find areas with the greatest unmanaged cybersecurity risk. These are the areas where it can achieve the highest Return on Security Investments.
Focusing on these areas allows the company to leverage its resources most effectively.
Organizations should also focus on security solutions that give the best Return on Security Investment. These solutions can make incident response faster and more effective. They can also reduce the chance of security breaches or minimize the financial impact of these incidents.
In cybersecurity, preventing attacks works better than relying on detection and response. Security solutions that block attacks before they happen eliminate both the risk and the potential impact on the organization. Detection and response measures are reactive. They only help speed up fixes after the damage is already done. When businesses focus on prevention, they can protect their assets and maintain security with minimal disruption.
Selecting the Right Tool
To make sure a cybersecurity tool delivers a strong Return on Security Investment, start with a thorough cost vs. benefit analysis. Look at the total cost of ownership. This includes the purchase price, maintenance, training, and upgrades.
Compare these expenses against the potential benefits. Look at the tool’s ability to reduce security risks, prevent financial losses, and improve how efficiently operations run. A well-balanced evaluation helps you focus on tools that offer the greatest value while meeting organizational goals.
Next, define your objectives. Clearly outline what the cybersecurity tool should achieve. This might include reducing security incidents, minimizing downtime, protecting sensitive data, or improving operational efficiency. Setting specific goals gives you a framework for measuring the tool’s value. It also ensures the tool aligns with your organization’s overall cybersecurity strategy.
Consider the tool’s scalability. Evaluate whether it can accommodate your business’s growth and adapt to evolving cybersecurity threats. A scalable solution ensures ongoing effectiveness, aligning with long-term goals and reducing the need for frequent replacements or upgrades.
Assess the tool’s effectiveness in addressing specific cybersecurity needs. Look for evidence that shows its performance in similar environments. This includes case studies, customer testimonials, or independent reviews. This provides insight into its real-world capabilities.
Account for the tool’s compliance with relevant regulations and industry standards. Adherence to frameworks such as the General Data Protection Regulation, Health Insurance Portability and Accountability Act, or Payment Card Industry Data Security Standard not only mitigates legal and financial risks but also enhances the tool’s overall value by ensuring regulatory alignment.
Measure the tool’s impact on risk reduction by quantifying its effectiveness in lowering risk exposure and minimizing the likelihood of successful cyberattacks. This tangible metric highlights its role in strengthening your business’s security posture.
To Sum Up
Quantifying Return on Security Investment is crucial for smart cybersecurity decisions that fit business goals.
With the right framework in place, you can check how well tools handle specific risks—and how much to spend on a solution before purchasing. It’s also important to use preventative cybersecurity measures to stop problems before they start.
This helps improve security and efficiency.
Knowing the Return on Security Investment helps justify future investments and pick solutions that give the most bang for the buck.
