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Many organizations spend a significant portion of their budget on security and compliance. But justifying these investments to decision-makers can be challenging due to the lack of a clear, measurable return. This can lead to issues like budget cuts that can hinder your ability to maintain industry-standard security practices.

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To avoid these consequences, security leaders must determine their compliance and security ROI and show stakeholders the long-term value of these investments.

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In this guide, you’ll learn about the various ways to determine your return on security investment. We’ll cover the following:

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• Why your organization should measure compliance and security ROI
• Common challenges to expect
• How to determine compliance and security ROI
• How to maximize security and compliance ROI

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Why measuring compliance and security ROI is crucial

Understanding and tracking the return on your compliance and security investments shapes your organization’s financial practices and internal budgets. Knowing your ROI helps you better understand whether your budget is distributed and utilized properly and if you need to make any adjustments.

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Measuring your compliance and security ROI brings various additional benefits.

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1. Showcase benefits of security investments to upper management

If you need to persuade decision-makers like the CISO, CEO, or board members to approve investments in security initiatives, the best path forward is to showcase specific figures that prove the value of those investments. It’s especially important to increase the visibility of high-value benefits, such as reduction in breaches or improved incident response times.

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2. Justify investments in GRC programs

Organizations may hesitate to prioritize security and compliance investments because they don’t yield immediate tangible returns. ROI numbers track the positive impact of security measures and also quantify which initiatives were more successful than the others, which can help inform budget allocation.

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You can also proactively highlight investments with low ROI and take proactive measures to refine your security team’s performance. For instance, a security team that relies on manual tasks can register a low ROI—which could indicate that introducing an automated solution could help the team get more done with fewer resources.

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3. Understand security’s impact on sales cycles

Your security programs expedite external security reviews, which help speed up sales cycles with prospects. By connecting security to sales cycle metrics, you can prove that security is a revenue driver, not a cost center.

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4. Better brand reputation

Measuring security and compliance ROI showcases a commitment to upholding security best practices, which ultimately improve customer trust. With more trust, your organization will see increased customer loyalty and retention, as well as more new business opportunities.

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{{cta_withimage10="/cta-modules"}} | How to turn security into revenue ebook

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Determining compliance and security ROI: Common challenges

Security and compliance ROI can also challenging to measure for the following reasons:

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• Different kinds of success metrics: Compliance and security initiatives are revenue drivers, but the metrics tracked aren’t a one-to-one match with traditional revenue metrics. Where we might measure impressions and clicks on a digital advertisement, for example, security metrics include things like the number of passing controls or time to complete a security review. These can be harder to tie directly to revenue metrics.
• Security infrastructure complexity: Your security infrastructure is made up of various networks, software, and other components like data models, cloud providers, and third party vendors. You need to thoroughly understand how each component should be secured to estimate appropriate investments and corresponding returns.
• Lack of consistent benchmarks: Security and compliance benchmarks can be different across industries. Some organizations have mandatory standards and regulations to meet, while others might have to pursue voluntary certifications to ensure industry-standard practices. Different buyers may be looking for different levels of controls and frameworks, which creates varying ROI benchmarks.
• No standard for quantifying benefits: Many decision-makers might not understand how (and if) their security and compliance investments are paying off. There may be a lack of clarity on what metrics to draw from and what tools to use to measure the metrics against.

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Despite these challenges, there are a few ways to measure security and compliance ROI closely enough to understand the value of your investments.

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Return on security investment (ROSI) explained—with example

Return on security investment (ROSI) is a widely accepted metric you can use to determine the viability of your security initiatives. Since such initiatives don’t yield direct financial gain, the basic calculation comes down to determining the total loss prevention.

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ROSI is a metric that revolves around the annual loss expectation (ALE)—i.e., the estimated total cost of security incidents within a year. ALE consists of two components:

1. Annual rate of occurrence (ARO): The total risk (or the number of times) an incident may occur within the given year.
2. Single loss expectancy (SLE): The total cost of a single realized threat scenario.

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Here’s the formula: ALE = ARO x SLE

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So, for any given security investment, you’ll need to perform extensive risk assessments to determine the ARO and SLE.

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For example, your assessment may show that you are likely to experience 3 data breaches a year. The assessment may also reveal that a single breach would cost $350,000 to remediate and cause $50,000 worth of lost productivity, which indicates an SLE of $400,000.

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In this case, the ALE would be ($400,000 x 3), i.e., $120,000.

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Let’s assume that you’re planning a $100,000 investment in security. To calculate ROSI, you’d follow this formula: ROSI = ((ALE – cost of security investment) / cost of security investment) x 100

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In our example, ROSI would be 0.2 or 20 percent—decision-makers will use this number to determine if the ROSI was high enough to make the investment worthwhile.

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How to determine the return on compliance investments

Currently, there are no widely accepted metrics you can use to calculate compliance ROI. This doesn’t come as a surprise, considering that every organization has a unique regulatory landscape, so there’s no common ground on which to standardize compliance ROI.

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Still, there are several ways to approximate the return on your compliance investments, such as:

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• Cost-benefit analysis: You can compare the cost of full compliance with direct and indirect benefits specific to your organization (ability to operate in new markets or avoiding legal concerns).
• Calculating avoided penalties: If you need to comply with mandatory standards, you can subtract the cost of your compliance strategy from the total penalties you’d incur without compliance.
• Sales forecasting: Some standards and frameworks directly impact your sales opportunities. For example, Cyber Essentials certification is necessary for securing government contracts in the United Kingdom. If your compliance investment directly impacts sales, you can forecast your sales opportunities, compare them to the investment, and get an ROI estimate.
• Quantifying qualitative benefits: Assigning dollar values to compliance-related benefits, such as reputation and customer trust, can help you quantify them and decide whether the investment is worth it.
• Revenue influenced tracking: You can create and track a list of the deals won because of a robust compliance or security posture to calculate the total revenue influenced in a period. This could be deals tied to a particular framework, or deals that have gone through your customer-facing Trust Center. 

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An effective way to determine compliance ROI is by using a dedicated trust management platform. A robust solution comes with revenue tracking abilities, which let you compile data on all the revenue generated as a result of a demonstrated compliance and security posture.

3 steps to maximize your compliance and security ROI

You can take the following steps to improve your compliance and security ROI:

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1. Analyze your security and compliance landscape
2. Set up continuous monitoring
3. Automate compliance and security workflows

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Step 1: Analyze your security and compliance landscape

Before making any compliance or security investments, make sure to fully understand your regulatory obligations and quantify potential threats. This way, you can prioritize the most impactful initiatives and get the most valuable returns that add to your bottom line.

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For example, health organizations must prioritize HIPAA-related controls and obligations to avoid stringent penalties. Many of the controls revolve around firm security, so you must prioritize those investments. Once you’re fully compliant with HIPAA, you can move on to the other controls and voluntary standards.

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You should also consider the following factors when assessing your compliance and security costs:

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• Data collection and processing practices
• IT infrastructure complexity and overall attack surface
• Partnerships with third parties and related risks (financial, operational, strategic)

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Step 2: Set up continuous monitoring

To ensure your investments are paying off, you must continually monitor your security controls and compliance posture. Both are likely to evolve significantly with time, so staying on top of the related changes ensures optimized resource use and prevents sunk investments.

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Additionally, you should also focus on the following:

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• Implementation of enforced security policies
• Changes in your third-party risk landscape
• Any potential compliance gaps as a result of regulation changes

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Monitoring these elements can be highly inefficient and resource-consuming if done manually, which can further lower your security and compliance ROI. A much better alternative is to use dedicated software that streamlines tracking activities and lets you focus on the key data.

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Step 3: Automate compliance and security workflows

Security and compliance activities can eat away at your productivity and bottom line if they consume too much of your team’s time. Such activities include:

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• Regular internal compliance audits
• Evidence collection
• Security questionnaire completion

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The good news is that most of the processes above can be automated with the right software.  For instance, trust management platforms like Vanta significantly reduce repetitive manual work like collecting evidence for audits or answering security questionnaires during sales conversations, which enable cost savings and a higher ROI.

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Review and enhance compliance and security ROIs with Vanta

With Vanta, you can proactively demonstrate your security and compliance with a public-facing Trust Center. It enables you to streamline security reviews by providing your customers and prospects with visibility into your controls and documentation, ultimately building customer trust to help close deals. With a Trust Center, Vanta’s customers have:

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• Deflected up to 87 percent of security reviews
• Automated up to 93 percent of access approvals
• Automated up to 86 percent of NDA collection 

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You also get clear visibility of your security and compliance operations, as well as the revenue related to these programs. You can measure revenue influenced by connecting Vanta to your Salesforce instance, to measure the opportunities that have touched your Trust Center. This way, you can demonstrate a clear ROI to your internal stakeholders.

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To learn more about how the Trust Center works, watch this webinar.

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Vanta adds to your ROI by reducing your team’s busywork. With Vanta's Questionnaire Automation, you can create a centralized security knowledge base and leverage AI to generate responses to security questionnaires and complete security reviews up to 5x faster. Vanta customers:

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• Complete security reviews up to 5x faster
• See 73 percent coverage across security questions 
• See a 95 percent acceptance rate of AI-generated answers

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To learn more about how Questionnaire Automation, watch this webinar.

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{{cta_simple14="/cta-modules"}} | Trust center product page

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