Tuesday, September 02, 2008

Schneier Agrees: Security ROI is "Mostly Bunk"

I know a lot more people pay attention to Bruce Schneier than they do to me, so I was thrilled to read his story on Security ROI (also in CSO Magazine):

Return on investment, or ROI, is a big deal in business. Any business venture needs to demonstrate a positive return on investment, and a good one at that, in order to be viable.

It's become a big deal in IT security, too. Many corporate customers are demanding ROI models to demonstrate that a particular security investment pays off. And in response, vendors are providing ROI models that demonstrate how their particular security solution provides the best return on investment.

It's a good idea in theory, but it's mostly bunk in practice.

Before I get into the details, there's one point I have to make. "ROI" as used in a security context is inaccurate. Security is not an investment that provides a return, like a new factory or a financial instrument. It's an expense that, hopefully, pays for itself in cost savings. Security is about loss prevention, not about earnings. The term just doesn't make sense in this context.

But as anyone who has lived through a company's vicious end-of-year budget-slashing exercises knows, when you're trying to make your numbers, cutting costs is the same as increasing revenues. So while security can't produce ROI, loss prevention most certainly affects a company's bottom line.


I am really honored to see Bruce's blog post link to three of my previous posts on the subject too.

8 comments:

Kir said...

Very true. It's often hard to force a person who is conditioned to think about business from one frame of references to stand up, walk over and look at it from another point of view. You're very right though, catering to a false sense of justification is no excuse. It is our job as professionals to help people see the truth of the matter.

Anonymous said...

i tend to consider loss prevention as a ROI. the real problem is evaluating loss that didn't happen. you prevented IP breach, how much didn't you lose ? do you consider the investment in R&D lost ? or the cost of a trial ?
financial loss evaluation can't reside in the hand of the secteam/dept. of a compagny, but as this loss is evaluated in the case of a disaster, breach or whhatever may happen, this non-happening should be treated as "money not lost is money won".

ntokb3 said...

Security ROI is mostly bunk. Especially how it is used by security vendors to justify their crazy prices.

That being said, we in the InfoSec field need to get better about making the business case for security. Risk mitigation is great and all but that is basically insurance, and no CFO worth their salt is going to buy more insurance than they need.

We need to get much better at identifying "off label" uses for security technology.

A company that I visited recently uses their packet capture and inspection system to recreate customer interactions with their web portal for troubleshooting. Thus improving customer service as well as security.

Information analysis software like Splunk can be used for non-security applications as well.

Log analysis software can be fed application logs and used to analyze customer behavior and even provide realtime alerts to individuals who might want to know when a particular logs on or uses a new function.

Let's face it, security is about satisfying minimum requirements to mitigate risks to a level that is acceptable to business people. Capabilities beyond those needed to satisfy those minimums should be expected to serve purposes beyond security.

jrturner said...

As ntokb3 inferred....

The argument that you have to make is not ROI...

The argument for security expenditures should be structured as you would make the argument for any other kind of insurance. Calculate your potential loss, include a probability factor, and come up with a number.

It's simply a form of insurance...which is a term I would hope execs (the CFO) would understand.

The Serrano Boy said...

thats a good news that they agreed. Good

Rob Lewis said...

The issue is complicated by the fact that the particular circumstances of each case may impact the degree of cost savings.

A customer purchased our product (scalable MLS) because of an insider threat to a very valuable intellectual property (they had had two previous breaches that were embarrassing). Our products resolved the main issue, but the customer was pleased that our products paid for themselves within a year due to operational savings.

These savings were basically due to cutting dependence on an outside managed service provider and running security in-house using existing IT staff, enforcement of security policies to reduce rogue traffic and network noise, thus recapturing bandwidth and allowing the cancellation of a planned secondary comms line, and reduced network downtime due to filtering of network and behavioral anomolies, in particular the avoidance of downtime and disaster recovery and clean-up for one of the major MS worms.

Some of those savings have continued for another 4 years, to the point that operational costs have been saved to the tune of 2 or 3 times the original purchase price. I would call that a real ROI. Yet, another customer purchasing the same product for IP protection may not have garnered the same savings if there circumstances were different.

djb said...

I would like to know what fellow blog readers think of the attached article. Does this help demonstrate ROI? Is this type of approach a benefit? Thanks

New Metrics Assign Grades to Your Security Posture

Free, user-driven metrics a step toward making security measurement more of 'a science instead of a black art'

http://www.darkreading.com/document.asp?doc_id=163211&WT.svl=news1_1

SEPTEMBER 8, 2008 | 5:00 PM By Kelly Jackson Higgins Senior Editor, Dark Reading

A coalition of enterprises, government agencies, universities, and vendors from around the globe tomorrow will release a set of free metrics for measuring an organization’s security posture.

The nonprofit Center for Internet Security (CIS) hopes the metrics will serve as a standard method for assessing security readiness. “Today there are thousands of ways to measure this… but no two organizations measure these things the same way, and no two divisions [in the same organization] measure them in the same way,” says Bert Miuccio, CEO of CIS. “Today we are creating an objective, data-driven way to measure the security status of an enterprise.”

Miuccio says this “number grade” can be used to help a company make more informed security buying decisions or change its security strategy, for instance. “This lets decision-makers understand the security status of their organization over time,” he says.

CIS consists of more than 150 member companies, including Fidelity National Financial, General Dynamics, Lockheed Martin TSS, Mortgage Guaranty Insurance Group, Royal Bank of Canada Capital Markets, Southwest Airlines, Union Bank of California, and the Federal Reserve Board and U.S. Dept of Homeland Security ‘s Computer Emergency Readiness Team (US-CERT)

Security experts say only time will tell whether CIS’s security metrics will take off. But even if it only gets the conversation going, that is progress, since there hasn’t before been an effective, standard way to test and measure security postures, they say.

“It’s at least the basis for the next try,” says Fred Pinkett, vice president of product management for Core Security. “There has come a time in security where we need to be looking at this more scientifically than the technical people in the back room saying ‘Listen to us’ and ‘Go about your business.’ We need the business to understand what we’re doing.”

Companies need a way to determine why their security policies and procedures may not be working. “They put all of these policy and procedures in, but they may still be getting attacked and they want to know what’s going on,” Pinkett says. “Measuring and testing yourself” is a good way to start truly understanding what’s working and what’s not, he notes.

The first set of metrics that the CIS will release tomorrow for download are:

mean time between security incidents;

mean time to recover from security incidents;

percentage of systems configured to approved standards;

percentage of systems patched to policy;

percentage of systems with anti-virus;

percentage of business applications that had a risk assessment;

percentage of business applications that had a penetration or vulnerability assessment;

and percentage of application code that had a security assessment, threat model analysis, or code review prior to production deployment.

Miuccio says the metrics define what to measure and how, and then let an organization look at the trends over time. They also allow an organization to compare its scores with other organizations in its vertical market to see where it stands compared to others in the same industry, he says.

Ensuring a meaningful comparison among organizations’ security postures won’t be easy, experts say. “It’s always great to have data. It’s interesting to see what constraints they put around the data so they get an apples-to-apples comparison,” says Dick Mackey, vice president of consulting for SystemExperts.

Meanwhile, CIS will also launch a software-based security metrics service for its members that helps them correlate their security practices with their number grades, as well as anonymously compare their grades to other organizations in their field.

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