How Much Can IT Security Failures Cost My Business?

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How Much Can IT Security Failures Cost My Business?

The costs of IT security failures and how to protect your business.

IT security failures can be extremely costly for businesses. As of 2023, the average cost of a data breach in the United States amounted to $9.48 million, up from $9.44 million U.S. dollars in the previous year. To avoid falling victim to a costly IT security failure, it’s crucial to understand the common causes and how to protect your business.

What can lead to an IT security failure?

Director of IT at Bit-Wizards, Sam Blowes, says employees pose the biggest security risk to businesses.

“Your own employees mishandling company owned physical and intellectual property should probably be your top concern,” he explains. “Leaving their laptops unattended, leaving computers unlocked when they walk away, putting their work e-mail on their personal phone and then letting the kids play with it in the car... these are all employee related security risks that businesses face every day.”

Blowes says this security risk often seems innocuous because businesspeople don’t fully understand how much it leaves them exposed and how many bad actors are out there waiting to take advantage.

“The democratization of the internet means that bad actors from the other side of the planet have just as much access,” explains Blowes. “So, employees are definitely the number one issue here. Their lack of attention or knowledge when it comes to protecting company data can be a huge threat.”

Outdated IT management is another common cause of IT security failures.

“In addition to employee related risks, many businesses don’t update and upgrade their computers and servers as they should, leaving them riddled with security holes,” says Blowes. “These businesses may think they’re saving money at the time, but in actuality, this outdated equipment is costing them daily because it’s slow or not working properly. And then eventually, you could pay a much higher price due to a data breach.”

Often times, the inability for businesses to properly protect their assets is what leads to security failures, such as a cyberattack.

What are the costs associated with IT security failures?

In 2021, the FBI's Internet Crime Complaint Center received 847,376 complaints regarding cyberattacks and malicious cyber activity, the majority of which targeted small businesses. What were the costs of these attacks? Nearly $7 billion, with the loss from hacking incidents up 64% year over year.

The costs associated with a typical cyberattack include several factors:

  1. Ransoms: Ransomware is a piece of software that sneaks onto your computer and encrypts your files. The hacker will then demand payment to decrypt your files, and often times, businesses have no choice but to pay up (without the guarantee of getting their assets back). In 2022, around 70 percent of businesses were victimized by ransomware—an increase from the previous five years and the highest figure reported to date.
  2. Lost sales and/or customers: If your business is victimized by a cyberattack, you will likely experience downtime. These outages often create a complete work stoppage where you will not be able to conduct business as normal, ultimately costing you sales or customers. Additionally, if your clients’ data was compromised due to the breach, this could damage your reputation, costing you their business entirely.
  3. Lost productivity: Any time you or your employees are working to recover from a cyberattack, or you’re just simply unable to work, you’re losing productivity. Lost productivity is just another cost associated with downtime, which costs small-to-medium sized businesses $8,000 to $25,000 per hour on average.

How can businesses stop wasting money on IT security failures?

Employee training

The main problem with employees is that they simply don’t know that they’re doing anything wrong, or they don’t know what to look for. Training your employees to be skeptical about every external email should be ongoing training that happens regularly. Your employees are your last line of defense before a cyber-criminal can get into your network, but they are also the reason why the doors are left unlocked and opened. Training on computer security best practices, passwords, phishing, ransomware, and other threats should be frequent and ongoing.

Cybersecurity measures

Taking cybersecurity measures such as undergoing regular penetration tests is a smart way to help defend your network. A penetration test is an authorized attack on a network to evaluate its security posture. When you undergo a pen test, you’re hiring a company to ethically hack your system. The main focus of this exercise is to attempt to find a vulnerability in a company’s system and then exploit that vulnerability. Pen tests are important because they uncover security vulnerabilities before an actual hacker does, keeping your business one step ahead.

Continuous IT management

Outdated IT management often leaves businesses vulnerable to cyber threats, which is why it’s crucial for businesses to keep hardware and software up to date, secure, and backed up. For businesses without dedicated IT resources, IT management is often mishandled, leading to security risks. Hiring a managed service provider (MSP) to handle your IT can help your business stop wasting money on security failures.

At Bit-Wizards, our Managed IT Services team makes sure your employees understand security best practices, and that they’re properly trained on all the equipment and tools they’re using. Bit-Wizards is also SOC compliant, and we undergo penetration testing twice a year. This keeps our data and our clients’ data safe. When you partner with Bit-Wizards, we guard your company. Our security features include enterprise-grade firewalls, virus protection, advanced threat protection for email, alert monitoring, personnel training, regular backups, and cloud-based recovery restoration.

“We’ve been in the business for 23 years, which is a rarity in the technology space,” says Blowes. “In nearly two and a half decades, things have changed so much, and we’ve been here for all of it. So, we can tell you with confidence that it’s simply not cost-effective to skimp on IT security.”

Ready to stop wasting money on IT security failures? Contact Bit-Wizards now.

Author

Simone Hines, Content Manager
Simone E. Hines

Content Manager