Information Security Breach – The Impact on Business

Home/Blogs/Information Security Breach – The Impact on Business


Information is one of the most valuable assets of a company that deserves highest level of protection. With information technology taking over every department of businesses today, there has been a big change in the channels through which information flows and the sources where it is stored. This is the very cause for the rise in importance of information security as a major subject in IT industry. To cater to this transformation in IT sector, universities and educational institutions worldwide have been working on (and are successful to some extent in) including a subject/specialization on information security as part of the curriculum in IT PG and UG courses. There are also various certification programs offered by reputed IT companies to train professionals on how to secure computer networks. To realize the importance of information security, one should know the effects of data breach or information security breach on a company. It not only costs a company or an organization in terms of money but also in terms of reputation and customer trust which is difficult to calculate. This write up tries to shed light on various effects and cost of compromised information security.

Impact of Data Breach

There is information flow in every department of a company from human resources to marketing and key operations. The fact that more and more companies are opting for cloud technology and remote servers to store and manage data, brings into picture the need for proper information security measures in place. In the last few years we have come across many instances of big companies being a victim of data breach. Reports say that such instances are not limited to large enterprises. Information security attack can occur to any business small, medium or large. The effects of data breach depends on the type and the value of the information that is lost/disrupted/modified/destroyed.

Loss in Terms of Money

The monetary loss from information security breach can be huge to a business. Data breach instances in major security companies such as RSA and Kaspersky in recent times has shocked the tech and business communities. IT bigwig IBM teamed with Ponemon Institute conducted research to estimate cost of data breach to businesses in 2016. According to the reports, $4 million is the average cost of data breach hit and $158 is the average cost of every record lost. The average cost per record lost varies from one field to another and the nature of the data. With hackers getting more and more sophisticated in their approach, the cost of data breach has been raising in the last few years. It is also notable that in many cases the businesses were not aware of the data breach until 10 months to up to 2 years. Credit card information of customers, banking details, Email IDs and passwords and sensitive personal information are some of the common data that is lost.

Loss in Terms of Reputation

Data breach hurts a company badly in terms of reputation. In many instances companies have lost valuable clients following a data breach. When personal information of hundreds of customers can be lost from an attack, people may avoid subscribing to the company’s services or products. Data breach can also result in law suits being filed against the company which in-turn affects its reputation.

Loss of Intellectual Property

Intellectual property generated from the company’s think tank, research and development team or design team is one of the most valuable assets of the company. A business’s future may depend on such property. Loss of intellectual property from data breach can be devastating for a company. Though it may not be calculable in terms of money, it is clear that the loss directly affects growth and future revenue of a the company.

Information Security for a Career

The need for securing information has alarmed businesses to think of ways in which this can be done. IT bigwigs are investing huge amount of money on researching about the impact of data breach globally. Many training programs have been conducted to teach the basics of networking and develop information security skills in engineers. Yet there is a big gap between demand and supply for capable information security professionals. With more and more companies digitalizing their operations, the need for information security is set to raise and the opportunities for candidates who want to make it big in the domain are abundant.

Pic courtesy:




Forgot Password