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Cybersecurity ROI: Convincing the Board to Invest

Rohan Timalsina

July 8, 2024 - TuxCare expert team

  • Cybersecurity investments protect the company’s bottom line by preventing costly breaches.
  • Quantifying cybersecurity ROI can be complex because many of its benefits are preventative and intangible.
  • IT specialists often use technical jargon, creating a barrier for board members with a business-oriented focus.


Cybersecurity is a growing concern of businesses nowadays but is often perceived as a cost center. To effectively manage cyber risks, companies need a well-designed cybersecurity program that is risk driven and aligns with business goals. However, the board of directors frequently questions the cost and effectiveness of such programs. Should they invest more? Less?

Board members, often coming from diverse backgrounds such as finance, marketing, or operations, may not fully grasp the technical nuances of cybersecurity. They are increasingly concerned about the estimated cybersecurity ROI and if it is worth investing or not. Therefore, framing the conversation in terms they understand – primarily through financial and strategic lenses – is essential.

In this article, we will discuss how to convey a cybersecurity investment value to business leaders by demonstrating a return on investment (ROI).


Understanding the Cybersecurity ROI


ROI in cybersecurity measures the financial return on investments made in securing an organization’s digital infrastructure. This includes evaluating the cost savings from prevented breaches, the increased revenue from a strong security posture (e.g., attracting clients who value data security), and the financial benefits of maintaining customer trust and business continuity.

We can break down the ROI of cybersecurity into key components, such as cost savings and compliance. These components help translate the effectiveness of security measures into financial terms, making them more understandable for decision-makers:


Cost Savings from Preventing Cyber Attacks


Cyber attacks can be financially devastating due to potential losses from data breaches, ransomware demands, and operational disruptions. These include costs for incident response, legal fees, fines, reputational damage, and remediation costs associated with breaches. A recent report by IBM found that the global average cost of a data breach soared to $4.45 million in 2023, a jump of 15% over the past 3 years.


Compliance Savings


While regulatory compliance requires investment, non-compliance carries a much steeper price tag in the form of fines and legal fees. Implementing cybersecurity measures helps ensure compliance and avoids these penalties. Consider the potential financial impact of non-compliance in your industry to showcase the cost savings achieved from maintaining a secure environment.


Operational Efficiency


Cybersecurity goes beyond just protection; it can also improve business operations. Efficient security measures minimize disruptions and ensure smooth business workflows. Techniques like live patching allow security patches or updates to be applied without system downtime. 


Reputation Management


Customers value businesses that prioritize data security. A strong cybersecurity posture fosters trust and a positive brand image. However, data breaches and security incidents can severely damage a brand’s reputation. You can demonstrate this as a long-term benefit that mitigates potential reputational risks and helps maintain customer trust.

Challenges in Communicating Cybersecurity ROI to the Board


Unlike other investments, the benefits of cybersecurity are often preventative and intangible. This makes it challenging to quantify the avoided costs of potential cyberattacks and demonstrate the long-term value of security measures. Therefore, convincing a board of directors to invest in robust cybersecurity measures can be an uphill battle.

Boards of directors prioritize measurable results and strategic investments that contribute to the company’s growth and profitability. Cybersecurity professionals, on the other hand, often speak in technical terms about firewalls, encryption, vulnerability patches, risk mitigation, and preventing future threats. This creates a communication gap: the board may not understand how these technical measures translate into tangible business benefits.


Strategies for Effective Communication: Crafting the Message for the Board


The key to securing board approval for cybersecurity investment lies in bridging the communication gap between technical security measures and the board’s focus on business value. Here’s how to talk to the board in their language:


  1. Decode the Board’s Language


Calculating cybersecurity ROI can be tricky. While it involves direct cost savings, like avoiding breaches, it also offers indirect benefits like a stronger brand reputation and improved operational resilience.

Board members are focused on the big picture: business growth, profitability, risk management, and strategic investments. Therefore, your approach must align cybersecurity initiatives with these priorities. Here’s how to do it:

Business Growth: Investing in cybersecurity goes beyond just avoiding costs; it’s about enabling and protecting business growth by safeguarding reputation and customer trust, directly influencing revenue and market share. Make sure your board sees it that way.

Risk Management: Position cybersecurity as a critical component of the organization’s risk management strategy. Demonstrate how cybersecurity measures mitigate the risk of data breaches, financial loss, and legal consequences, which can significantly impact the company’s bottom line.

Strategic Investment: Frame cybersecurity not just as a cost, but as a strategic investment, similar to property and casualty insurance. Just as insurance safeguards physical assets, cybersecurity protects the company’s critical digital assets.


Example: Linux live patching


Many organizations rely on Linux-based systems for their critical operations. However, traditional security patching methods often require system downtime, leading to costly disruptions and lost productivity.

By implementing Linux live patching, companies can avoid the substantial costs associated with system downtime during patch management. More importantly, live patching helps mitigate the risk of data breaches by applying security updates quickly, closing vulnerability windows that attackers might exploit. 

TuxCare offers KernelCare Enterprise, an automated live patching solution, which allows security updates to be applied to all popular enterprise Linux distributions without a reboot.


  1. Quantify Cybersecurity ROI Whenever Possible


While some aspects of cybersecurity are inherently preventative, there are ways to quantify the ROI and make a compelling case for investing in robust cybersecurity measures.

Cost-Benefit Analysis: Use industry data and case studies to estimate the potential cost of a cyberattack, including data recovery, legal fees, and reputational damage. Compare this cost to the proposed cybersecurity investment.

Reduced Downtime: Cybersecurity measures shield your business from malware and hacking attempts that can disrupt operations. Just an hour of downtime can cause significant financial losses. For example, in 2021, Amazon lost $34 million in sales due to an outage. Quantify the cost of downtime in terms of lost productivity and revenue.

Compliance Savings: Calculate the estimated cost of non-compliance with regulations like GDPR, HIPAA, or CCPA. This can include potential fines, legal fees, and reputational damage.

Reduced Costs from Security Awareness Training: Investing in employee training programs can significantly reduce human error, a leading cause of data breaches. Consider the potential cost savings your organization could achieve by preventing just a few security incidents caused by human error.


  1. Be Concise and Clear


When communicating cybersecurity ROI, prioritize clear, concise language that emphasizes the business value of your proposals. Avoid technical jargon and acronyms that the board might not understand. Provide a high-level overview that highlights the financial benefits and be prepared to dive into details if the board has questions.

Help the board understand that cybersecurity is an ongoing investment. It’s not just about preventing the next breach but about building a resilient organization that can adapt to evolving threats.


  1. Present Real-World Examples


Use relevant industry examples of cyberattacks to illustrate the potential consequences for your business. Share stories of companies that faced severe consequences due to inadequate cybersecurity measures. For instance:

2017 Equifax Data Breach: Incurred costs exceeding $1.38 billion to settle the breach, including $380.5 million in compensation and $1 billion invested in strengthening information security. (DarkReading)


Final Thoughts


Effectively communicating the cybersecurity ROI to a board of directors requires a strategic approach that aligns with their priorities and language. By demonstrating how cybersecurity investments align with the board’s focus on growth, risk management, and strategic value, you can foster a culture of robust security within the organization.

Remember, cybersecurity is not solely about cost avoidance; it’s a fundamental investment that offers long-term value in maintaining customer trust, enabling innovation, and ensuring operational continuity.

Cybersecurity ROI: Convincing the Board to Invest
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Cybersecurity ROI: Convincing the Board to Invest
Learn how to communicate cybersecurity ROI to the board, framing your message around financial benefits that resonate with their priorities.
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