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.
Cybersecurity professionals (or anyone responsible for ensuring the protection of their organization) will see increasing budgets for security resilience.
34% of tech leaders plan to prioritize cloud security for their 2025 cybersecurity investments and 28% are focusing on improving data protection and building trust, highlighting these as key goals for this year.
Like other departments, security teams are now expected to justify their spending by showing Return on Security Investment. This metric helps prove that security investments are vital and showcases how they’re delivering value.
Return on Security Investment also assists stakeholders in identifying wasteful spending on ineffective security measures, ensuring that resources are directed toward initiatives that truly add value, much like how ROI guides decision-making in other areas of business.
Calculating the potential Return on Security Investment for proposed initiatives allows security leaders to justify future funding requests. Comparing the Return on Security Investment of different proposals helps executives prioritize solutions that offer the most significant benefits to the organization.
In this article, you’ll explore a model of Return on Security Investment (and how to calculate it) and explore how you can choose the right solution to get the most value out of your investments.
Quantifying Cyber Resilience
Your calculations should be tailored to your business and its unique risks.
The data needed should be easy to collect regularly, as gathering it should not be time-consuming or costly. While predictions may not be perfectly accurate, it’s important to aim for the best estimates possible, understanding that uncertainty is inherent in forecasting potential threats.
The quantification of the Return on Security Investment formula is measured by the impact of the investment on the final result.
Use this metric to build a compelling case and explain to company directors the need for 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 distinct from basic ROI calculations because it’s based on assessing the specific risks that a security investment addresses. To apply it effectively, you must first understand your security risk exposure and then estimate the value of the assets that the investment is meant to 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 recommends that companies invest up to a certain percentage of the expected value of potential losses from a cyber attack to get the best return on security investment. It also highlights that security spending should not exceed around 37% of the expected loss, no matter how vulnerable the information is.
Using the model, a company with a data value of $1,000,000 and an attack probability of 15% with an 80% chance of a successful breach should not exceed $44,000 in cybersecurity investments.
Key Considerations Before Investing in Solutions
By conducting a risk assessment, an organization can identify areas with the greatest unmanaged cybersecurity risk, 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 prioritize security solutions that deliver the best Return on Security Investment. These solutions can improve the speed and effectiveness of incident response, reduce the likelihood of security breaches, or minimize the financial impact of such incidents.
In cybersecurity, preventing attacks is a more proactive and effective approach than relying on detection and response.
Security solutions that block attacks before they can occur eliminate both the risk and the potential impact on the organization.
In contrast, detection and response measures are reactive, only helping to speed up remediation after the damage has already been done. Prioritizing prevention allows businesses to safeguard their assets and maintain security with minimal disruption.
Selecting the Right Tool
To ensure a cybersecurity tool delivers a strong Return on Security Investment, start by conducting a thorough cost vs. benefit analysis. Consider the total cost of ownership, including the purchase price, maintenance, training, and upgrades.
Weigh these expenses against the potential benefits, such as the tool’s ability to reduce security risks, prevent financial losses, and enhance operational efficiency. A well-balanced evaluation helps prioritize tools that offer the greatest value while aligning with organizational goals.
Next, define your objectives. Clearly outline what the cybersecurity tool should achieve, such as reducing security incidents, minimizing downtime, safeguarding sensitive data, or enhancing operational efficiency. Establishing specific goals provides a framework for measuring the tool’s value and ensures it 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 such as case studies, customer testimonials, or independent reviews that demonstrate its performance in similar environments. 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.
