Cybersecurity Budget Breakdown: How Much Should You Spend?

There are a lot of experts and technologies involved in a comprehensive cybersecurity strategy that provides you with the best protection available. As such, it’s not always clear-cut how to budget for cybersecurity, nor how to use that budget.

Use this blog to determine how much you should be spending, what you should be spending on, and how to make the most of your allocated budget for cybersecurity.

Building a cybersecurity team from scratch isn’t impossible, but it is difficult. Check out our Why DOT? page to learn more about the advantages that come from partnering with a strategic security provider.

How Much Should You Spend on Cybersecurity?

While it’d be nice to have a specific number in mind, unfortunately, there’s no one universal answer to this question because it relies heavily on factors like:

• Size of business
• Industry
• Sensitivity of data you collect
• Compliance requirements

Though every business must have some form of cybersecurity in place, the level can vary depending on these needs. For example, some companies aren’t required to be compliant with major regulations, and therefore won’t need the same amount of security as a firm working government contracts.

Generally, businesses allocate around 5-20% of their IT spend to cybersecurity, meaning cyber typically makes up about 3-5% of a company’s total annual budget. But this number is just a generalization and can be much higher, especially after a security incident occurs as this is when companies tend to significantly ramp up their cybersecurity spending.

Breaking Down a Cybersecurity Budget

A cybersecurity budget can be broken down in many ways depending on how you decide to go about building your strategy. To start with, you can choose to build an in-house team or outsource network security to a strategic partner.

Let’s take a quick look at the cybersecurity costs associated with both in-house and partner-provided cybersecurity solutions:

In-House Cybersecurity Expenses:

• Recruiting & Hiring: When keeping an in-house team, your talent acquisition department is responsible for finding, hiring, and retaining talent. This can be specifically difficult for organizations today because there is also a major talent shortage in the cybersecurity space.

• Managing Technology: Cybersecurity requires a lot of high-end technology. Hardware, anti-malware software, training programs, and more are needed on a daily basis. It’s crucial to stay up-to-date on it all, so you must allocate part of your budget toward acquiring and updating the necessary tech.

• Training: Cybersecurity training is needed by everyone within an organization. For non-cyber employees, this helps them understand what to look for in a potential attack, particularly for social engineering attacks like phishing.

For the cybersecurity team, frequent training keeps them on the cutting edge and aware of evolving attacks in order to tune tools and adjust strategies. Additionally, your cybersecurity team needs to obtain the latest certifications which can cost thousands of dollars to train for and earn.

• Facilities: In addition to the technology, a cybersecurity team needs a facility to host all its tools and equipment. This is known as a security operations center (SOC), and it is the center of all a business’ cybersecurity operations. The cost of maintaining a SOC can easily reach $2-7 million a year.

Partner-Provided Cybersecurity Expenses:

• Predictable Monthly Rate: When working with a managed security services provider (MSSP), you pay one predictable fee every month for access to steady expertise and technology. This fee ranges depending on the size of your network, the number of users and devices, and special needs depending on your business and industry.

Rather than having to juggle all the parts of a security strategy, though, you get access to a reliable team of experts that does the heavy lifting for you. This removes various potential additional expenses that arise due to breaches, new technology, and managing people.

How to Spend Your Cybersecurity Budget

A typical cybersecurity budget is allocated between five main spending categories:

1. Compliance Requirements: HIPAA, CMMC, CCPA, and other government regulations require specialized attention. Whether or not you must meet these standards depends on who you work with, where you operate, your industry, and what kinds of data you’re collecting on your customers.
2. Regular Risk Assessments: Cybersecurity is always changing with new technologies to implement and new risks to thwart. Regular risk assessments make sure that your organization is aware of their vulnerabilities and how they can be addressed.
3. Ongoing Security Training: The human element of cybersecurity is massive. Cybercriminals are constantly targeting your people via social engineering attacks with the goal of stealing credentials or having someone click on malicious links or attachments to download malware. Ongoing training ensures your people know what to look for and how to avoid attacks.
4. Security Requirements for New Business Initiatives: When you start doing new things in your business (offering new services, selling new products, etc.), this can bring unexplored cybersecurity risks. A portion of your budget is necessary for reviewing and securing new business initiatives to avoid opening a new vulnerability.
5. Security Requirements for Changing Business Priorities: Similar to new business initiatives, when your business priorities change, you have to adapt your security strategy to match.

Prioritizing can help you make the most of your cybersecurity budget. With these spending categories in mind, businesses must decide how much to allocate their budget properly because each one comes with its own expenses in the form of programs, technology, time, people, and resources.

For example, businesses that work with the Department of Defense (DoD) or in healthcare industries may need to allocate more funds toward compliance services than businesses that have no need to be compliant.

However, with that said, compliance standards are growing consistently and reaching into new industries each year, so it would never hurt to get ahead of the game and upgrade your data protection.

How to Make the Most of Your Budget

At the end of the day, it’s up to you and your security team to decide how to optimize your cybersecurity budget, so it’s good to have an idea of the expenses associated with different solutions to building a comprehensive and layered cybersecurity strategy.

To make it easy on you, we’ve put together this basic summary that breaks down the expenses involved with developing your own cybersecurity team through recruiting and hiring, as well as the expenses involved with a strategic managed security service provider.

Final Thoughts on Cybersecurity Budgets

Budgeting for cybersecurity is difficult. Businesses must balance their own vulnerabilities and risks along with the actual dollar amount they can afford to pay. It’s especially tough because cybersecurity regularly requires so many resources, including labor, training, technologies, research, and continual development.

Even still, cybersecurity is a must have for modern organizations who are looking to remain relevant and competitive, making cybersecurity budgeting a necessity.

If you want to explore your options around a strategic partnership with a managed security service provider, check out our Why DOT? page for additional insights into what DOT Security can provide your organization.