Incident Cost
Total financial impact of security incidents in the organization
Current Value
$186K
-12% from previous period
Industry average: $245K
Calculation Method
Sum of direct costs (response, recovery) and indirect costs (lost revenue, reputation damage) from security incidents
Significance
This KPI quantifies the financial impact of security incidents, helping to justify security investments and demonstrate ROI of security controls.
What is Incident Cost?
Incident Cost measures the total financial impact of security incidents on an organization, including both direct costs (such as incident response and recovery) and indirect costs (such as lost business and reputational damage). This metric helps quantify the business impact of security events and provides a foundation for ROI calculations on security investments.
How it's calculated
Total Incident Cost is calculated by summing:
- Direct response costs (staff time, consultant fees, forensics)
- Recovery costs (system restoration, data recovery)
- Business disruption costs (downtime, lost productivity)
- Data breach costs (notification, credit monitoring, legal)
- Reputational damage (customer churn, brand impact)
- Regulatory penalties and compliance costs
For this organization, the current average cost per significant incident is $186,000, which represents a 12% reduction from the previous year.
Why it matters
Business impact: Quantifies the financial impact of security incidents, making security discussions more relevant to business leaders.
ROI calculation: Provides a baseline for calculating the return on investment for security controls and initiatives.
Risk management: Helps prioritize security investments based on potential financial impact of different types of incidents.
Performance trends
Incident costs have decreased by 12% compared to the previous year, primarily due to improved detection capabilities that have reduced the average time to detection and containment. The industry average cost per incident remains approximately 32% higher than our organization's.