How to Measure Security ROI?

UM_Maverick asks: "Does anybody out there have any experience measuring Return on Investment for security-related expenditures? For example, if management says that there's $1 million left in the budget, and you can either implement a new customer tracking system that is projected to save $300k per year, or implement a new security technology or process, how do you measure the return on the security spend, and convince them that it's at least worth considering? Googling for 'Measuring Security ROI' seems to just produce a list of articles that say 'Measuring security ROI is difficult.' Does anybody have some more direct experience or information?"

Comments

Potential Damage

[frieza79]

I would start with figuring out what it would cost to fix broken systems, downtime, etc.

Then you can at least put a price on not being secure, and let management make a somewhat informed decision.

Proving a negative

[mlts]

Measuring security ROI is proving a negative. Because stuff is not being broken into and information is not being stolen, the company is "saving" money by not losing money and gaining bad press.

Your benchmarks are what type of security issues you do encounter and how they are handled. For example, if a security package catches would-be intruders, that can be shown as a sort of ROI (as the package prevented X dollars of loss.) Another example is the cost of whole disk encryption. Having a laptop that is protected by WDE get lost, one could state that the encryption software (assuming its properly deployed, proper password and/or security token policies set, etc.) saved the company the loss of the data on the laptop.

Probably the best bet in proving ROI is how many, what type of, and the cost of, the breaches and incidents one had before a policy/software/infrastructure went into place versus afterwards.

Risk math

[theonetruekeebler]

Here's a gross oversimplification:

The cost of a security breach is measured as the probability of an incident multiplied by the cost of the incident. Both numbers can be calculated surprisingly well, or at least made to sound plausible. Security software will reduce the probability of an incident. Calculate the difference. If it exceeds the cost implementing security, it's a good thing.

This is a basic formula used for all types of data security, including backup and disaster planning.

Security is a Vague Term

[99BottlesOfBeerInMyF]

Spending money on "security" can mean a whole lot of different things. What type of security? What are you trying to prevent? I work at a company that produces certain security products, some of which have other applications as well. When you hand the CEO a nice graph of the DDoS attack that you got your ISP to filter for you when you subscribed to their service, show how many hours of downtime it prevented, and how much money went through the online store during that time, proving ROI is fairly easy. Other kinds of security are fuzzier. Stopping worms within your network saved IT X hours of rebuilding PCs and prevented those machines from being down this many hours times the average worker's hourly rate would have been unable to work during that time etc. and you can provide some estimates.

Before you get to that stage, however, you need to have specific security measures in mind designed to address specific security threats to your business. Some of these measures are easy to justify (need certification to do business with government agency Foo) and some are hard (better passwords make it harder for insiders to steal our customer database and sell it to Russian hackers who then use it causing a publicity problem and resulting lost customers).

Re:One way of doing things

[MarcoAtWork]

possibly cost you a week suspension

I don't like judging people by their posts, but what you write makes me wonder if you're still in high-school: in the real world something like the above could net you either a written warning or, more likely, a pink slip, if not being sued for the amount of money that was lost during your 'drill' (which, if this was a financial institution, could be quite large).

In any case, if you worked for me and pulled a stunt like that I'd be starting to look for your replacement asap: I pay you to do your job, not to prevent other people from doing theirs.

Re:Risk math: Not Math

[jofny]

You can't measure the probability of something getting broken into. There are a million ways to calculate it and all of them come down to making up a number in your head. Realistically, "vulnerability" (ie, probability of getting hacked) is a null value. Ignore it. Weight your data, whether it can be replaced, the cost to the business if it's compromised (unauth disclosure, corruption of the data, or denial of access). Then threat model how you could do any of those things to your most valuable data and where, your next most valuable data class, etc....mitigate from there. Also calculate reputation value. A really outstanding good ROI for security has nothing to do with numbers: It's called "I didnt end up on CNN or Slashdot today".