Exploring Costs Associated With IT Incidents
Every time an organization experiences IT incidents, both hard and soft costs are incurred. Unfortunately, most IT departments work solely in a reactive manner to incidents. Working reactively often results in skyrocketed costs to the organization. Most of these incidents are a result of oversight and misalignment.
When an IT security breach occurs, customer security, data security and other factors can become compromised, resulting in significant costs to the organization to resolve.
According to the U.S. Cost of a Data Breach Study release in 2010, data breach incidents resulted in an average loss of $204per compromised customer record in 2009, a slight increase from $202 in 2008. The average per-cost incident experienced by full security breaches rose to $6.75 million in 2009, from $6.65 million in 2008.
The most expensive IT data breach discovered in this study required nearly $31 million to resolve!
Factored into the U.S. Cost of Data Breach Study’s findings were expenses related to detection, escalation, communication and response in addition to the investigative, administrative, legal costs. Expenses which are more difficult to calculate, such as customer losses, opportunity losses and reduction in sales due to reputation management were also considered.
How does IT security integrate into your organizations processes and procedures? Does it align with organizational goals or that of IT best practices? Does it know who the customers are and what data is theirs and where that data resides?
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David G. Peterson is a business consultant and author of Handling the Remedy. He has extensive international experience managing projects and operations for large financial institutions. He has worked in North America, Europe, Middle East and Asia skillfully managing business and technical requirements, core systems enhancement and support, merger and acquisition integration's, business process reengineering, off-shoring and outsourcing.