The Cost of Chaos: UK business pays the price for poor IT security

05/05/2004-The cross-sector study of large corporate organisations found that businesses with inadequate IT security could lose millions of pounds as a result of unavailable systems, lost customers and increased costs.

The ‘Cost of Chaos’ study for IT and telecoms provider Energis revealed that a staggering 70% of IT security spend in the UK is still shelled out reactively, after a security breach.

The new study, believed to be the first of its kind, highlights the main knock-on effects of an IT security breach:

Unavailable systems – each security breach resulted in systems being down for an average of 16 hours and in a 75% loss of business during that period.

Lost customers – customer attrition levels following a security breach rose by a massive 47%, while revenues from those customers that did stick with the business fell by 4%. In addition, business wins converted from the customer pipeline decreased by a staggering 75% with competitor organisations quickly moving to cash in.

Increased costs – the average cost of a single security breach was put at ?122,000. Furthermore, businesses were obliged to spend around ?30,000 on external communications activity in the aftermath of a systems outage and, to add insult to injury, faced a 3% hike in insurance premiums.

In addition, the monetary impact of a large breach on a company with inadequate security systems was put at the ?3 million mark – more than six times the cost of an outsourced fully managed and scalable solution from a trusted provider.

Malcolm Seagrave, security expert at Energis, comments: “The way many UK businesses handle IT security is the equivalent of leaving a brand new Ferrari unlocked with the keys in the ignition.

“Companies must invest time and money in the right security infrastructure and in having a failsafe business continuity plan ready should the worst happen. With a host of cost effective, outsourced solutions readily available, it’s no longer acceptable to cry over spilt milk.”

Notes for editors:
About Energis (www.energis.co.uk) Energis is a leading provider of high-value telecoms and internet services to major companies and public institutions in Great Britain and Ireland. It offers a portfolio of data, voice, call centre and internet services. Around 437 million call minutes per week are routed over the Energis network and Energis hosts more than 20,000 commercial websites. Major customers include the BBC, Boots, Centrica, Freeserve, Royal & SunAlliance, Tesco and the UK Government.