MAXIMIZING CYBERSECURITY ROI

Strategic Solutions for SMBs Facing Resource Constraints
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Tim Marley

Introduction

In today’s digital landscape, cybersecurity is no longer a luxury—it’s a necessity. As cyber threats evolve and become more sophisticated, organizations of all sizes are grappling with the challenge of maintaining robust security. With limited budgets and resources, many businesses are seeking innovative ways to protect their assets. One such solution is the fractional Chief Information Security Officer or virtual Chief Information Security Officer (vCISO): a cost-effective option that brings top-tier cybersecurity expertise to businesses without the overhead of a full-time executive. This article explores the multifaceted value of engaging a vCISO, highlighting how their expertise, professionalism, and comprehensive knowledge can provide a strategic advantage in cybersecurity management.

The SMB market is pinched between attackers and budgets

Small and medium-sized businesses (SMBs) continue to be prime targets for cybercriminals, with over 30% of breaches involving these organizations, according to the 2024 Verizon Data Breach Investigations Report. (1) The report highlights a concerning trend: more than 60% of attacks on SMBs are successful, often due to weaker security measures, limited IT resources, and constrained cybersecurity budgets. Many SMBs struggle to allocate sufficient funds for comprehensive security measures, leaving them vulnerable to increasingly sophisticated threats. The financial impact is significant, with average breach costs ranging from $120,000 to $1.24 million—amounts that can be devastating for smaller businesses. Alarmingly, 60% of SMBs that suffer a breach are forced to close within six months. With phishing and ransomware as predominant threats, it’s clear that SMBs must find ways to maximize their cybersecurity investments and prioritize robust strategies to protect their operations and ensure long-term survival.

The Budgetary Challenges Facing SMBs in Cybersecurity

One of the most significant challenges small and medium-sized businesses (SMBs) face when it comes to cybersecurity is the constraint of limited budgets. This issue is underscored by findings from the Cyber Risk Insight Index Q1 2022 by Corvus Insurance(2), which surveyed SMBs to gauge their cyber readiness. According to the survey, a staggering 61% of SMBs reported that their cybersecurity budgets were insufficient to adequately address their risks.

This lack of funding translates into real vulnerabilities. The survey found that 43% of SMBs had only allocated 5% or less of their total IT budget to cybersecurity—a figure that is alarmingly low given the increasing frequency and sophistication of cyberattacks targeting smaller organizations. Additionally, 53% of SMBs acknowledged that they do not have dedicated cybersecurity personnel, further highlighting the gap between the risks they face and the resources they have to combat them.

The implications of these numbers are profound. With limited budgets, SMBs are often forced to make tough decisions, prioritizing basic IT operations over more comprehensive cybersecurity measures. This leaves them vulnerable to breaches, which can be financially devastating—often more so than for larger enterprises that have more resources to absorb the impact. As a result, it is crucial for SMBs to maximize their cybersecurity return on investment (ROI) by strategically allocating their limited resources to the most critical areas.

The Challenge of Hiring Qualified Cybersecurity Talent for SMBs

For small and medium-sized businesses (SMBs), hiring qualified cybersecurity talent is an increasingly daunting task. The demand for cybersecurity professionals is growing rapidly, and the skill sets required are diverse and highly specialized. According to a recent Forbes article(3), entering the field of cybersecurity often requires a strong foundation in IT, coupled with specialized certifications such as Certified Information Systems Security Professional (CISSP), Certified Ethical Hacker (CEH), and CompTIA Security+. However, finding professionals with the right mix of skills is only part of the challenge.

Cybersecurity is not a one-size-fits-all profession. It encompasses a variety of roles, each with its own set of specialized skills and responsibilities. For example:

  • Network Security Specialists: Focus on protecting the integrity of an organization’s network infrastructure.
  • Application Security Experts: Work to ensure that software and applications are secure from development through deployment.
  • Incident Responders: Specialize in detecting, investigating, and responding to security breaches.
  • Security Analysts: Monitor and analyze security systems and respond to potential threats.
  • Compliance Officers: Ensure that the organization adheres to industry regulations and standards.


Each of these roles requires distinct expertise, making it difficult for SMBs to hire a “jack-of-all-trades” cybersecurity professional. The complexity and variety of these roles mean that SMBs often need to hire multiple specialists, which can be cost-prohibitive.

In addition to specialized roles, effective cybersecurity requires strong leadership to guide strategy and decision-making. High-level positions such as Chief Information Security Officer (CISO) are crucial for developing and overseeing an organization’s security strategy, risk management, and compliance efforts. However, the challenges of hiring for these leadership roles are even more pronounced:

  • High Salary Expectations: The average salary for a CISO can exceed $150,000 per year, not including fringe benefits like bonuses, equity, and ongoing professional development.
  • Limited Talent Pool: The demand for experienced CISOs far exceeds the supply, making it difficult for SMBs to attract top talent. Larger enterprises often offer more competitive compensation and career advancement opportunities, leaving SMBs at a disadvantage.


Without strong security leadership, SMBs may struggle to develop and execute an effective cybersecurity strategy, leaving them vulnerable to attacks. For SMBs that cannot afford a full-time CISO, alternatives such as fractional CISOs, virtual CISOs (vCISO) or cybersecurity consultants can provide the necessary leadership and expertise on a part-time or project basis, offering a more cost-effective solution.

The financial implications of hiring cybersecurity talent are significant. According to Forbes, salaries for cybersecurity professionals can vary widely depending on experience, location, industry and specialization. For example:

  • Network Security Specialists: Average salary around $99,000 per year.
  • Application Security Experts: Average salary around $105,000 per year.
  • Incident Responders: Average salary around $88,000 per year.
  • Security Analysts: Average salary around $92,000 per year.
  • Compliance Officers: Average salary around $91,000 per year.
  • CISO: Average salary exceeds $150,000 per year.


Beyond salary, SMBs must also consider fringe benefits and additional costs such as health insurance, retirement contributions, bonuses, and ongoing training and certification fees. These “non-salary” costs can add up quickly, making it even more challenging for SMBs to attract and retain top talent.

Given the specialized nature of cybersecurity roles and the high salaries associated with these positions, including critical security leadership roles like CISOs, it’s clear that SMBs face significant hurdles in building an in-house cybersecurity team. The financial burden, coupled with the difficulty of finding talent with the right combination of skills and leadership experience, makes it difficult for smaller organizations to secure their digital assets effectively. This reality underscores the importance of maximizing cybersecurity ROI and considering alternative solutions, such as outsourcing to managed security service providers (MSSPs), hiring fractional CISOs, or leveraging cybersecurity consultants to ensure comprehensive protection within a constrained budget.

The Ongoing Threat To SMBs By Malicious Actors

Based on the “2024 Verizon Data Breach Investigations Report” (DBIR)(1), here are some key statistics and insights related to how frequently small and medium-sized businesses (SMBs) are targeted, how often these attacks are successful, and the broader impact on the SMB market:

  • Frequency of SMB Targeting:
  • SMBs remain a primary target for cybercriminals, with the report noting that these organizations are often viewed as “low-hanging fruit” due to their generally weaker security measures compared to larger enterprises.
  • The report indicates that a significant portion of the breaches (over 30%) involve small and medium-sized businesses, highlighting the persistent focus on this segment by threat actors.
  • Success Rate of Attacks:
  • The success rate of attacks on SMBs is alarmingly high, with over 60% of these businesses experiencing successful breaches within the past year. The report emphasizes that the lack of robust security infrastructure and limited IT resources contribute to the high success rate.
  • Impact on SMBs:
  • The financial impact on SMBs is often devastating, with the report showing that the average cost of a data breach for SMBs ranges from $120,000 to $1.24 million, depending on the industry and the sensitivity of the compromised data.
  • Additionally, the report highlights that 60% of SMBs that suffer a data breach close their doors within six months due to the overwhelming financial and reputational damage.
  • Human Element and Phishing:
  • The human element remains a significant vulnerability, with phishing attacks being the leading cause of breaches among SMBs. The report shows that nearly 70% of successful breaches involved phishing, underlining the importance of user education and awareness.
  • Ransomware and Extortion:
  • Ransomware continues to be a major threat to SMBs, with the report noting that ransomware was involved in roughly 23% of all breaches. The average ransom demand is reported to be around 1.34% of a company’s revenue, which can be a substantial amount for an SMB.

Cybersecurity Spend Breakdown

Breaking down cybersecurity spending is crucial for ensuring a balanced and effective approach to securing an organization. The specific allocation of spending can vary depending on the size of the organization, industry, risk profile, and current security maturity. However, a general breakdown for cybersecurity spending might look like this:

  • People: 40-50%
  • Security Staff: Salaries for security analysts, engineers, incident responders, and other cybersecurity personnel.
  • Training and Awareness: Regular training programs for employees, including phishing simulations and ongoing security education.
  • Consulting and Outsourcing: Engaging external experts, such as vCISOs, security consultants, or managed security service providers (MSSPs), to supplement in-house teams.
  • Incident Response and Forensics: Costs associated with incident response, including retaining external forensics experts in case of a breach.
  • Technology and Tools: 30-40%
  • Security Software: Investments in antivirus, endpoint detection and response (EDR), intrusion detection/prevention systems (IDS/IPS), and security information and event management (SIEM) solutions.
  • Network Security: Firewalls, VPNs, secure email gateways, and other network security technologies.
  • Data Protection: Encryption tools, data loss prevention (DLP) systems, and secure backup solutions.
  • Threat Intelligence and Analytics: Tools for monitoring, detecting, and analyzing threats, including threat intelligence platforms.
  • Process and Governance: 10-15%
  • Policy Development and Compliance: Creating and maintaining security policies, procedures, and compliance documentation (e.g., GDPR, HIPAA, PCI-DSS).
  • Audits and Assessments: Regular security assessments, vulnerability scans, and penetration testing to identify and address weaknesses.
  • Risk Management: Implementing risk assessment and management frameworks to identify, evaluate, and mitigate risks.
  • Infrastructure and Hardening: 5-10%
  • System Hardening: Costs associated with securing servers, endpoints, and cloud environments against unauthorized access and vulnerabilities.
  • Physical Security: Investments in securing physical access to data centers, offices, and critical infrastructure (e.g., access control systems, surveillance).
  • Disaster Recovery and Business Continuity Planning: Ensuring that robust disaster recovery and business continuity plans are in place, including regular testing and updates.
  • Contingency: 5-10%
  • Incident Response and Breach Costs: Setting aside funds for unexpected breach-related expenses, such as legal fees, regulatory fines, and public relations efforts in the event of a significant incident.
  • Example Breakdown:
  • People: 45%
  • Technology and Tools: 35%
  • Process and Governance: 10%
  • Infrastructure and Hardening: 5%
  • Contingency: 5%
  • Tailoring the Budget:
  • For Small to Medium Businesses (SMBs): Focus more on outsourcing and managed services due to limited internal resources.
  • For Large Enterprises: Greater emphasis on in-house expertise and advanced security tools, with significant investment in governance and compliance.

This breakdown provides a balanced approach to cybersecurity spending, ensuring that organizations invest appropriately in people, technology, processes, and infrastructure to create a robust security posture.

Leverage fractional relationships to save where appropriate

Before we dive into the benefits, let’s clarify what a vCISO is and does:

A virtual CISO/fractional CISO is an outsourced security professional who provides strategic guidance and leadership for an organization’s information security program. They bring the expertise of a senior-level executive without the full-time commitment, offering flexibility and cost-effectiveness.

Key responsibilities typically include:
1) Developing and implementing cybersecurity strategies
2) Managing security operations and incident response
3) Ensuring regulatory compliance
4) Conducting risk assessments and management
5) Overseeing security awareness training
6) Advising on security-related technology investments

Now, let’s explore the compelling reasons why engaging a virtual or Fractional CISO can be a game-changer for your organization’s cybersecurity posture.

  • Depth of Expertise and Experience – One of the primary advantages of a vCISO is the depth of expertise they bring to the table. Here’s why this matters:
  • Diverse Industry Experience – vCISOs often have worked across multiple industries, exposing them to a wide range of cybersecurity challenges and solutions. This broad perspective allows them to apply best practices and innovative approaches that a less experienced in-house resource might not consider.
  • Up-to-Date Knowledge – The cybersecurity landscape evolves rapidly. vCISOs, by nature of their work, stay at the forefront of emerging threats, technologies, and compliance requirements. This current knowledge is crucial for maintaining an effective security posture.
  • Strategic Thinking – Years of experience in senior roles enable vCISOs to think strategically about cybersecurity. They can align security initiatives with business objectives, ensuring that cybersecurity becomes an enabler rather than a hindrance to growth.
  • Crisis Management Skills – Many vCISOs have hands-on experience managing major security incidents. This battle-tested expertise is invaluable when a crisis strikes, potentially saving the organization from significant financial and reputational damage.
  • Cost-Effectiveness – While expertise is crucial, cost is always a consideration. Here’s how a vCISO can be a more economical choice:
  • Fractional Engagement – vCISOs work on a part-time or project basis, allowing organizations to access high-level expertise without the full-time salary and benefits package of a C-suite executive.
  • Reduced Training and Onboarding Costs – vCISOs come with the necessary skills and can hit the ground running. There’s no need for extensive training or a long onboarding process, saving both time and money.
  • Flexibility in Engagement – Organizations can scale the vCISO’s involvement based on their needs, ramping up during critical projects or compliance periods and scaling back during quieter times.
  • Access to a Team of Experts – Many vCISO services come with access to a broader team of security professionals. This means you’re not just getting one expert, but potentially a whole cadre of specialists at a fraction of the cost of building an in-house team.
  • Objective Perspective – An external vCISO brings an unbiased viewpoint to your organization’s security practices:
  • Fresh Eyes on Existing Processes – vCISOs can identify blind spots in your current security approach that internal teams might overlook due to familiarity.
  • Vendor-Neutral Recommendations – Without allegiance to specific vendors or legacy systems, a vCISO can provide truly impartial advice on technology investments and security strategies.
  • Political Neutrality – As an external resource, a vCISO can navigate internal politics more easily, focusing solely on what’s best for the organization’s security posture.
  • Compliance and Regulatory Expertise – Navigating the complex world of cybersecurity regulations is a crucial aspect of a CISO’s role:
  • Multi-Industry Compliance Knowledge – vCISOs often have experience with compliance requirements across various industries (e.g., HIPAA, PCI DSS, GDPR, CCPA), providing valuable insights even as your business evolves.
  • Audit Preparation and Management – With their extensive experience, vCISOs can efficiently prepare your organization for security audits, potentially saving significant time and resources.
  • Risk Management Framework Implementation – vCISOs can implement robust risk management frameworks tailored to your organization’s specific needs and regulatory environment.
  • Scalability and Flexibility – The vCISO model offers unparalleled scalability:
  • Adaptable to Organizational Growth – As your organization grows or faces new challenges, a vCISO can adjust their level of involvement accordingly.
  • Project-Based Engagement – For specific initiatives like a cloud migration or a new product launch, a vCISO can provide focused, expert guidance without the need for a long-term commitment.
  • Knowledge Transfer – A good vCISO will work to enhance the skills of your existing team, gradually building internal capabilities.
  • Access to Cutting-Edge Tools and Methodologies – vCISOs, through their varied experiences, often have exposure to the latest security tools and methodologies:
  • Tool Selection Expertise – They can guide your organization in selecting the most appropriate security tools, avoiding costly mistakes in technology investments.
  • Implementation of Best Practices – vCISOs can introduce and implement industry best practices, elevating your overall security program.
  • Continuous Improvement Mindset – With their finger on the pulse of the industry, vCISOs foster a culture of continuous improvement in security practices.
  • Enhanced Incident Response Capabilities – In the event of a security incident, a vCISO’s experience can be invaluable:
  • Rapid Response Coordination – vCISOs can quickly assemble and coordinate incident response teams, minimizing damage from security breaches.
  • Crisis Communication – Experienced in handling high-stress situations, vCISOs can effectively communicate with stakeholders during a crisis, managing reputational risks.
  • Post-Incident Analysis – After an incident, a vCISO can conduct thorough analyses to prevent future occurrences and strengthen overall security posture.
  • Board and Executive Communication – Translating technical security concepts for non-technical executives is a crucial skill:
  • Effective Reporting – vCISOs are adept at creating and presenting concise, impactful security reports for board members and executives.
  • Budget Justification – With their strategic perspective, vCISOs can effectively justify security investments, tying them to business objectives and risk mitigation.
  • Security Advocacy – A skilled vCISO can be a powerful advocate for security initiatives at the highest levels of the organization.
  • Networking and Industry Connections – vCISOs often bring valuable professional networks:
  • Peer Insights – Through their connections, vCISOs can provide insights into how peer organizations are handling similar security challenges.
  • Vendor Relationships – Established relationships with vendors can lead to better service, pricing, and support for your organization.
  • Talent Acquisition – When it’s time to build or expand your internal security team, a vCISO’s network can be invaluable in finding top talent.
  • Bridging Skills Gaps – In the face of the cybersecurity skills shortage, a vCISO can be a powerful solution:
  • Immediate Expertise – Rather than spending months trying to hire and train the right person, a vCISO provides immediate, high-level expertise.
  • Team Development – vCISOs can assess your current team’s skills and provide targeted development plans to enhance overall capabilities.
  • Mentorship – For organizations grooming internal talent for future CISO roles, a vCISO can provide invaluable mentorship and guidance.

Industry Insights

  • Cyber Readiness Institute, “Low Awareness, Lagging Implementation, Little Incentive: The State of Cyber Readiness Among Small and Medium-sized Business 2024”(5)
  • “Fewer than one in five rates SMB cyber capabilities as ‘effective’ or ‘somewhat effective.’”
  • “SMBs perceive cybersecurity solutions to be expensive, hindering investment in this crucial area.”
  • “SMBs face an uphill battle with limited budgets, expertise, and time, as well as the misconception that their size makes them unlikely targets”
  • Vanson Bourne, “The State of SMB Cybersecurity in 2024”(6)
  • “76% of organizations agree that their organization lacks the skills in-house to be able to properly deal with cybersecurity issues.”
  • “94% have suffered from at least one cybersecurity attack in the past… translating into high levels of worry about further attacks.”
  • “More than half of SMBs are outsourcing all or a majority of their IT infrastructure (59%), IT services (59%) and IT cybersecurity (57%).”

Conclusion

As SMBs navigate the complex landscape of cybersecurity, it’s clear that effective risk management requires both careful budgeting and strategic planning. Cyber threats are not just challenges for large enterprises; they pose significant risks for businesses of all sizes, often with devastating consequences. To protect your organization, it’s essential to assess your cybersecurity posture regularly, allocate adequate resources, and implement robust defenses.

Where in-house expertise or resources are limited, outsourcing to qualified experts—such as a virtual CISO or cybersecurity consultant—can provide the strategic oversight and specialized skills necessary to strengthen your defenses without the financial burden of a full-time hire. By taking proactive steps now, you can safeguard your business against the evolving threats of the digital age and ensure long-term resilience.

Next Steps

As you wrap up your exploration of cybersecurity challenges and solutions, it’s crucial for SMBs to take proactive steps in assessing their risks and allocating appropriate budgets to protect their operations. Cyber threats are not just a concern for large enterprises; they can be devastating for businesses of all sizes. If your resources are constrained, consider engaging the services of qualified experts, such as a virtual CISO or cybersecurity consultant. These professionals can provide the strategic oversight and specialized skills necessary to safeguard your business without the overhead of a full-time hire. Don’t leave your organization’s security to chance—invest in the protection you need today.

References

Timothy J. Marley, CPA, CISSP, CISA, CISM, CIA, CDPSE

Founder and Principal Consultant, Prism One

Timothy J. Marley, founder and principal consultant of Prism One, is a seasoned cybersecurity executive with over two decades of experience in information technology, risk management, and compliance. Tim’s extensive expertise helps organizations navigate the complex landscape of cybersecurity and risk management.

Tim’s mission is to empower organizations to build resilient security postures in an ever-evolving threat environment. At Prism One, he continues to provide tailored, high-quality cybersecurity solutions to meet the unique needs of each client.

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