An interesting discussion has broken out on Christopher Hoff's Rational Survivability blog about how hard it is to effectively determine the true ROI of all the various tools needed to maintain an organization's security.
This inquiry kicked off with Hoff at a meeting in France, where Hoff was asked about the business value of the information security department, or what the other person termed the "No Department."
The simple question was: Why can't you InfoSec folks quite simply come to your constituent customers -- the business -- and tell them that your efforts will make me x% more or less profitable?
As Hoff points out, this is not about risk management, which security often encompasses, but a direct question about ROI. And the trouble with discussing profit in terms of security is that security is often just a cost center, and many security apps like firewalls and antivirus and application security don't enter into the profit equation (one exception is identity and access management, which can often improve efficiency).
To answer the question, Hoff went so far as to create a new term for ROI, which he termed RROI, meaning Reduction of Risk on Investment. But the problem of taking a pure risk approach to security is that many business folks are quite used to dealing with risk and will simply opt to accept the risk instead of spending 10,000 dollars to protect only a hundred dollars worth of assets.
Back in my days with Message Partners, which is an email security platform, our product was email middleware, and very often made it much easier for ISPs to introduce new email offerings (at an added price, or to remain competitive), so we were glad to bring up ROI in our discussions.
But still, most security is just cost against loss, and costs not tied to ROI are often the first to go in a downturn (or even in an upturn). But barring stopping all security efforts in order to set a base cost/benefit, a simple way to at least determine a loss that hasn't happened yet is to set the bare minimum of $90 dollars per record compromised, which in no way factors in loss of reputation which can result in loss of business (but I hear people are still shopping quite happily at TJ Maxx).
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