A cybersecurity risk assessment is a systematic process to evaluate an organization’s exposure to cyber threats and vulnerabilities. It identifies, analyzes, and prioritizes risks to data, systems, and operations. Risk assessments are critical for effective cybersecurity management, as they provide insights to help organizations:
Understand their cyber risk exposure. A risk assessment sheds light on an organization’s weak points and vulnerabilities that could be exploited by cybercriminals. This allows organizations to make informed decisions on how to strengthen their security posture.
Prioritize their cybersecurity investments. With limited budgets and resources, most organizations cannot tackle every cyber risk at once. A risk assessment helps identify the most urgent threats so security programs can focus on addressing these first.
Demonstrate cybersecurity due diligence. Conducting regular risk assessments exhibits an organization’s commitment to cybersecurity. It shows they are taking proactive steps to safeguard critical assets and sensitive data.
Support compliance with regulations. Certain laws and industry standards, like HIPAA and PCI DSS, require conducting cyber risk assessments periodically. A well-documented assessment can help demonstrate compliance.
Overall, cybersecurity risk assessments empower organizations to direct their resources at the most critical risks and implement the right controls and safeguards. As cyber threats evolve, assessments must be performed regularly to provide ongoing visibility into an organization’s true risk exposure.
Cost Factors
There are several key factors that influence the cost of a cybersecurity risk assessment, including:
Size of the Organization
Larger organizations with more users, devices, and locations will require more time and effort for an assessment, driving costs up. According to KR Group, comprehensive assessments for organizations with 200 users start around $15,000, while assessments for 5,000+ users can cost over $100,000.
Industry
Organizations in highly regulated industries like healthcare and finance tend to require more rigorous assessments to comply with industry mandates. Industry-specific risks also impact costs.
IT Infrastructure Complexity
The more complex the IT infrastructure, including networks, systems, applications, and integration points, the more time and expertise required for assessment, increasing costs.
Types of Data Handled
Organizations handling large volumes of sensitive customer data or intellectual property require more extensive assessments, elevating costs.
Fixed vs Variable Costs
When budgeting for cybersecurity, it’s important to understand the difference between fixed, one-time costs and variable, ongoing costs.1 Fixed costs are expenses that occur only once, like purchasing cybersecurity software or hardware, hiring consultants for a one-time assessment, and any initial training or implementation fees. These are upfront investments that provide longer-term value.
Variable cybersecurity costs recur on a regular basis, such as monthly or annual subscription fees for security services, employee salaries, recurring compliance audits, and ongoing training and awareness programs. Organizations need to account for these repeat expenses in their budgets to maintain an adequate cybersecurity posture over time.
Understanding which costs are fixed vs variable allows organizations to plan their budgets accordingly and anticipate both short and long-term cash flow needs for cybersecurity initiatives.
External vs. Internal
Organizations have the option of conducting cybersecurity risk assessments using either external consultants or internal resources. Hiring an external firm has some advantages:
- External consultants bring specialized expertise and experience conducting assessments across many industries.
- They provide an objective, independent perspective not influenced by internal biases.
- Assessments are their core business, so they can dedicate more focused time and resources.
- External firms stay up-to-date on the latest methods, tools, and threats.
However, there are also benefits to building an internal cybersecurity risk assessment team:
- Internal staff know the organization’s systems, data, and processes intimately.
- They can conduct testing without being restricted by outsider access.
- Building internal capabilities creates ongoing value beyond a one-time assessment.
- Internal assessments may have lower direct costs than hiring consultants.
According to the Department of Homeland Security, organizations can conduct assessments using either internal resources or external assistance depending on their needs and capabilities.
Assessment Activities
There are several key assessment activities that are part of a cybersecurity risk assessment, each with its own costs:
- External vulnerability scanning and penetration testing to identify weaknesses – This typically costs $2,000-$5,000 depending on the size and complexity of the IT infrastructure (https://www.krgroup.com/security-assessment-cost/).
- Internal vulnerability assessment and penetration testing to validate external findings – Usually around $3,000-$10,000 (https://networkassured.com/security/how-much-cyber-security-risk-assessment-cost/).
- Security policy and procedure review – Costs around $5,000 on average (https://trustnetinc.com/cybersecurity-risk-assessment/).
- Compliance audits for regulations like HIPAA – From $5,000 for a basic audit up to $50,000+ for large healthcare entities (https://www.hipaajournal.com/hipaa-compliance-audit/).
- Social engineering tests of staff awareness – Typically $3,000-$5,000 (https://www.krgroup.com/security-assessment-cost/).
The specific activities required will depend on the organization, industry, and types of data involved. But testing and audits form a major component of the cost of a thorough cybersecurity risk assessment.
Testing and Audits
Penetration testing, also known as pentesting, is one of the key components of a cybersecurity risk assessment. Prices for pentesting services can vary significantly depending on the scope of testing needed and specific vulnerabilities being targeted. According to Optimal Networks, penetration testing for a small to mid-size business may cost between $3,000 – $10,000 [1]. Larger enterprises with extensive IT environments and assets can expect pentesting to cost upwards of $20,000.
Performing security audits and obtaining compliance certifications like SOC 2 can also add substantially to the overall cost of a cyber risk assessment. A SOC 2 audit alone averages $30,000 – $60,000 according to Secureframe, with overall costs potentially exceeding $100,000 when factoring in audit preparation and ongoing maintenance [2]. The specific compliance needs of the organization and whether Type 1 or Type 2 SOC 2 certification is pursued will impact costs.
Regularly conducting pen testing and compliance audits enables organizations to identify vulnerabilities, meet regulations, and demonstrate security controls to customers. While costly, these assessment activities provide enormous value in securing sensitive data and maintaining operations.
Technology Costs
The amount spent on technology for a cybersecurity risk assessment will depend on the business size and scope of assessment. There are a variety of software tools and services that may be used. Common spending areas include:
Risk assessment software – Solutions like RiskVision and RiskRecon can cost $1,000-$5,000 or more per year for licensing. Prices vary based on features included. On top of this, setup and customization fees may apply.
Penetration testing tools – If hiring external penetration testers, businesses may not need to budget for pen testing tools. However, purchasing proprietary pen testing software can cost $2,000-$5,000 or more for an annual license.
Security information and event management (SIEM) – Implementing a SIEM to aggregate and analyze security data may cost $5,000-$10,000 or more just for initial software purchase and setup. Ongoing subscription fees also apply.
Vulnerability scanners – Prices start around $2,000-$3,000 per year for vulnerability scanning tools. Additional costs come from integrating scans into workflows.
According to this source, businesses should budget around $5,000 for the technology component of a full cyber risk assessment. Costs scale up for larger businesses with more endpoints and data sources.
Average Cost Ranges
Cybersecurity risk assessments can vary greatly in cost depending on the size and complexity of the organization. Here are some typical cost ranges:
Small businesses (under 50 employees) – A basic assessment typically costs $5,000 – $10,000 (according to Cyber Risk Portal). This provides an overview of risks and recommendations.
Medium businesses (50-1000 employees) – For a more comprehensive assessment expect to invest $15,000 – $30,000. This dives deeper into systems, data, and processes.
Large enterprises (over 1000 employees) – Assessments scale up to $50,000 – $150,000+ for global entities. Assessments are highly customized to the organization’s industry, locations, technologies, and regulatory needs.
Costs scale up based on the scope of systems, data, and processes under review. More complex environments with diverse technologies, integrate systems, regulated data, and global operations warrant more in-depth assessments.
Cost Saving Tips
There are several effective strategies organizations can use to reduce the costs of a cybersecurity risk assessment while still gaining valuable insights:
Limit the scope of the assessment. Focus on only the most critical assets and systems. This prevents assessing areas that may provide limited value. According to Network Assured, keeping the scope smaller is an effective way to reduce overall assessment costs.
Prioritize internal assessments. Leveraging internal security staff and resources before hiring external consultants can significantly reduce costs. Internal teams already have knowledge of the organization’s systems and needs.
Automate repetitive tasks. Using automation software for routine security tasks like patch management scans can decrease the workload for assessors. InfoGuard Security recommends automation to lower cybersecurity expenses.
Start with a remote assessment. Conducting the initial analysis virtually eliminates travel costs. Onsite visits can be reserved only for critical systems.
Review cloud-based assessment tools. Cloud solutions can provide economies of scale and flexible pricing models compared to traditional software options.
When to Invest in a Cybersecurity Risk Assessment
Cybersecurity risk assessments should be conducted at least annually to evaluate any changes in an organization’s cyber risk landscape. Assets, vulnerabilities, threats and controls can shift frequently, so regular assessments help identify new exposures. More frequent assessments may be warranted for organizations in highly regulated industries like healthcare and finance, where assessments are often required every 6 months. For businesses that have undergone major changes like mergers, acquisitions or adoption of new technologies, an assessment is recommended both before and after the transition.
Signs it may be time to schedule a cybersecurity risk assessment include the introduction of new digital assets or infrastructure, planned organizational changes on the horizon, recent security incidents or attacks, upcoming audits or compliance deadlines, or simply if it’s been over a year since the last assessment. The costs of not conducting regular assessments can often outweigh the price of an assessment itself, if it results in a breach. Overall, organizations should aim to conduct assessments frequently enough to obtain an accurate view of their risk exposure, enabling cybersecurity investments to be targeted appropriately.
According to LinkedIn, “Cybersecurity Risk Assessment: Frequency, Scope and its Effect on Litigation” and “Singapore CII (Critical Information Infrastructure) CCOP v2”, assessments should occur at minimum annually, with higher frequency recommendations for industries like finance and healthcare.