Cyber-attacks have become a common occurrence of everyday business for large and small organizations worldwide. Unfortunately, despite growing awareness of the consequences of a successful data breach, many organizations still downplay the associated risks. This is true especially when additional spending on IT security is laid out on the table. Cyber-attack can have long-lasting and devastating effects for the entire organization.
You’ve probably heard the quote “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently” by Warren Buffet. When it comes to your business, this quote is truly one to live by. Building your business to where it is today may have taken you years or even decades. Keep in mind that a simple mistake that could lead to a cyber-attack could ruin everything you’ve worked so hard for, in a matter of seconds.
IT Security: The Dark Side of the Internet Era
Cloud solutions and web applications continue to improve public administration, business, and other areas of life. But with global access to information comes global exposure to cyber-attacks. Hackers and cybercriminals are increasingly going after data rather than money. This only means that every institution and business has something valuable that makes them a viable target.
A cyber-attack that’s been carried out successfully can affect the entire organization on many levels and in many ways. This can range from minor operational disruption to a total business meltdown. The worse thing is, consequences of the said attack might still be felt for many weeks if not months later.
How a Cyber-Attack Can Internally Affect Your Business
Several studies indicate that despite the potential risks of cyber-attacks, business owners and executives do not perceive cyber-security incidents as a major risk to their organization’s reputation. Large companies like Sony and eBay have recovered from the negative effects of cyber-attacks. While they did have to spend a great deal of money to redeem their brand image, they were certainly never at risk of going out of business.
Unfortunately for small and medium-sized businesses, they do not have the financial resources or various revenue streams that will help minimize the effects of damage to their reputation. For smaller-sized businesses, cybersecurity is very important because a cyber-attack could bring their business to a dead end.
What are the main areas of your business that could be greatly affected by a cyber-attack?
#1. Financial Losses – The most obvious consequence of many cyber-attacks is direct financial costs especially when money is the main target. Common examples of this are ransom payments after a ransomware infection or unauthorized or fraudulent transfers. Damage payments and fines also fall under this category.
Cost of response and recovery
Cost of investigation
Cost of lost productivity
Lost revenue
Decreased company valuation
Legal and PR costs
#2: Loss of Productivity – The main impact of a cyber-attack is lost productivity potentially all across the organization. This begins with staff time directly affected by the incident following an attack. Routine IT work is likely to grind to a halt. You still need your IT staff to perform cleanup even after normal operations resume. This is to determine the root cause, assist external assets in this process, fix vulnerabilities, and reinforce IT security.
Even IT staff are dealing with the technical side of the business, other staff may be left without access to business-critical processes and systems. This can mean anything from minor disruptions and delays to a massive failure of all business processes.
Aside from ongoing financial costs, lost productivity can certainly affect future growth or even disrupt business continuity.
#3: Reputation Damage – A cyber-attack can cause long-term consequences related to reputation damages. Many organizations try to hide information about data breaches and attacks to reduce damage to their reputation. Unfortunately, this strategy can easily backfire. If the attack is exposed anyway, initial attempts to cover it up can worsen reputation damage and eventually, loss of trust.
The most crucial yet fragile aspect of any customer relationship or partnership is trust. If your relationship with your customers and business partners is affected, persuading them to stay or return would be challenging. As with any PR crisis, a cyber-attack may also tarnish your brand image with all the associated consequences.
#4: Legal Liability – The highest-profile cyber incidents in recent years is large scale data breaches. While the direct cost and operational impact of a data breach may be minor compared to a ransomware infection, organizations must consider the risk of civil and regulatory liability and data breaches. Potentially hefty fines for non-compliance may be imposed on organizations that fail to report breaches or suspected breaches.
Apart from any regulatory fines and obligations, your organization can face civil lawsuits from affected business partners and customers. In the event of a system breach and customer data is stolen, you may be forced to provide proof that the incident was not caused by negligence and that you did everything to maintain your best-practice security measures and procedures.
Conclusion
The technical side of business recovery must be efficient with transparent communication. This can help minimize the negative consequences of data breaches and outages.