CEOs Are Missing a Huge Opportunity with Cybersecurity
Every time I hear about a new high-profile data breach—and it’s happening more often all the time—I picture what must be going on in the executive suite of that company. Are the leaders hunkering down in a defensive position, looking for someone to blame? Will they throw money at the problem as they scramble to shore up their cybersecurity perimeter defense? Will they halt innovative digital initiatives for fear of greater digital vulnerability?
In many companies, the answer is probably “all of the above.”
Chief executive officers can no longer just focus on driving sales. Chief operating officers can no longer just focus on achieving operational efficiencies. Chief financial officers can no longer focus solely on forecasting and planning. In the digital era, cybersecurity strategy is now intrinsically tied to the growth of the company, its innovation, and its overall competitive position.
Some leading-edge executives and their firms are taking a new approach. They recognize the tight connection between digitization and growth — with cybersecurity as a critical foundation.
A new Cisco study being released in May, “Cybersecurity as a Growth Advantage” shows that more and more C-suite executives are beginning to view cybersecurity beyond its traditional defensive role. In fact, nearly one-third of the survey’s 1014 respondents believe that the primary purpose of cybersecurity is growth enablement. In addition, 44 percent consider it a competitive advantage versus just “a cost of doing business.”
The idea of cybersecurity as a growth driver may seem surprising at first glance. It’s not when you look at examples of what is happening in the market today. We conducted the market’s most comprehensive economic analysis of 414 private and public sector digital use cases. Seven “defensive” use cases, focused on protecting intellectual property and avoiding data breach costs, are equivalent to $1.8 trillion in value over the next 10 years. These use cases, however, are table stakes. The real opportunity lies within 407 digital use cases across 16 industries. These equate to $5.8 trillion, stemming from cybersecurity’s role in enabling innovation and growth.
Among industries, mining/energy, retail, and transportation/logistics had the highest percentages of respondents viewing cybersecurity as a source of growth (see chart below).
All of the use cases in our Digital Value at Stake analysis depend on strong cybersecurity. If you are going to implement a digital solution that connects people, processes, data, and things, then customers and partners involved in the solution must be able to trust that their information will remain secure and private.
Consider the retail industry. Last year, a Cisco study showed that many customers want a “hyper-relevant” shopping experience, in which the retailer offers exactly what the customer wants and needs at any given moment. This sort of contextually aware experience requires trust. Customers must trust the retailer enough to allow access to a wide array of personal information about their shopping history, likes and dislikes, and even current location. If the retailer has suffered a data breach, the trust is broken. Customers will not feel comfortable sharing personal information, and the innovative shopping experience will be squelched.
Security concerns not only make customers reluctant to participate in innovative solutions — they also cause organizations to hesitate on pursuing digital products and services. In some cases, cybersecurity worries are halting mission-critical initiatives entirely.
Cybersecurity helps create value across all the industries we studied. For example:
- Financial Services: Mobile payments depend entirely upon consumer confidence. With cybersecurity capabilities in place, mobile payments will generate as much as $396 billion from 2015-2024.
- Retail: In-store analytics improve workforce efficiency through dashboards, real-time information, operational analytics, workforce management tools, and shopping analytics. With a good cybersecurity foundation, in-store analytics has the potential to generate $285 billion from 2015-2024.
- Oil and Gas: When digital oil-control systems are hacked, oil spills can go undetected, often resulting in massive litigation, cleanup, and downtime costs. With the right cybersecurity practices in place, however, oil and gas firms can take their share of $16 billion that oil-spill control will create over the next 10 years.
Regardless of industry, it’s important that cybersecurity is designed into digital products and services from the beginning, rather than “bolted on” after the fact. CEOs who prioritize cybersecurity in their growth and digital agenda will not only be more effective in protecting their data and systems from intrusion—they’ll also be ahead of the game when it comes to innovation, value, and growth.