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The Return on Investment in Data Protection

Many businesses perceive the investments into data protection compliance as a cost because initially they are only aware of the money they paid for data protection services and infrastructure. They may see data protection compliance as a net-negative for the business that they only do because they have to. The reason for this perception is that the benefits of a good data protection organization are not as easily quantified in monetary terms as the costs. To understand these benefits a little better, In this article, we are going to look deeper into the additional returns on investment into data protection.

The primary source of this article is a study by CISCO Systems. This survey delved into the workings of 3200 security and privacy professionals to find out about the secondary effects of data protection measures.

Before we talk about secondary effects, let us shortly consider the primary effects for completeness. The most obvious benefit of data protection compliance is the reduced risk of fines. This effect is directly linked to the data protection laws and the authorities enforcing them. By implementing measures, creating defensive documentation and being able to quickly produce them, these risks are clearly reduced.

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However, what additional, secondary benefits does a good data protection organization have? Since businesses have to do it anyways, what else can they take away from it?

The most immediate benefit arises in sales processes. Respondents to the CISCO survey indicated an increased awareness of customers with regard to data protection which in turn increased the duration of sales cycles. In order to bring sales cycle durations back down, businesses would need to respond with better privacy documentation to fulfill the requirements of these increased-awareness customers.

While considering an improved data protection organization as a compensation to match increased-awareness customers, this can also be turned into a marketing benefit. Businesses that are fulfilling or even exceeding privacy requirements can and should talk about it. Customers as well as staff will appreciate this extra effort and perceive a higher value offering. You have surely read this somewhere: “We take your privacy very seriously”.

On a second level, on top of better marketing and sales, data protection compliance speeds up the overall digitisation and lays the groundwork for improved data security.

The consideration and documentation of data handling, data storage and data flows in an organization will quickly unearth the legacy antiquated “this-is-the-way-we-have-always-done-this” processes. Since these are being touched upon, documented and possibly adjusted for data protection, this is a great driver of digitisation in businesses.

Also, while data protection compliance is driven by legal requirements, it regularly involves the consideration of IT risks and technical and organizational measures. Reduced IT risks and improved technical and organizational measures will reduce the likelihood of breaches. Breaches that reduce customer trust and willingness to pay. Breaches that reveal business secrets to competitors. Breaches that can - take the example of ransomware - shut down an entire business operation. The CISCO study revealed that businesses that were more compliant had experienced fewer data breaches. As such, investments into data protection are investments into the IT security landscape.


Illustration on the RoI in Data Protection


Improving data management, boosting customer trust, and experiencing shorter sales delays and less costly data breaches can all be meaningful for an organisation and give a competitive advantage. So instead of worrying about the cost and effort of complying with privacy laws, all the benefits of privacy investment should be considered.