Impacts of a data breach

The costs of a data breach are rising. 

According to IBM’s 2021 report:, the average cost of a data breach has risen to $4.24 million – the highest average ever. They also found that compromised credentials were the most common way hackers gained access, and that remote work has been a large factor in both the frequency, and the costs of an attack.

If you’re struggling to understand how these numbers add up, let’s break down what actually happens when a business’s security is compromised. 

What really happens during a data breach?

When a business is identified as a potential target by a cybercriminal, they start with  reconnaissance on the employees and systems, and launch an attack using any weaknesses they find. 

Once inside the network, their goal is to keep their activity hidden while avoiding detection. The longer a hacker has access to a network, the more havok they may cause, which results in more costs for the business.

It’s terrifying to think that on average, it takes a company on average 197 days to detect a data breach

Imagine the impact to your business when a criminal is hiding inside your network for 8 months, without being detected, modifying, destroying, or stealing sensitive information about your company and customers.

Breaking down the costs of a data breach

Once a breach is discovered, there are both short-term and long-term cost impacts that you may or may not have considered.

Short-term costs

Professional Services

Dealing with a data breach will require cybersecurity professionals to perform a technical investigation to understand the full extent of the hackers activity, as well as guide the organization on a recovery plan, and security measures to protect against future attacks.

A public relations and legal team will also need to be engaged to help manage the fallout.

For businesses that don’t have employees able to perform these duties, outside contractors will need to be brought in at a substantial cost.

Loss of productivity

When a data breach happens, it requires all hands on deck to recover:


  • C Suite
  • Communications
  • Finance
  • Legal
  • IT / Security
  • Customer service
  • Business units

When a team has to concentrate on the fallout from an attack, they are unable to focus on their regular activities, and the things that make the company money.

Also worth noting is that many companies react to a data breach by essentially pulling the plug on their servers, in order to stop the inflation. If there are no system backups, or employees have not followed procedures to save their files on the cloud, they may struggle to recover their work (presentations, past records, strategic plans, etc.) and have to redo many tasks. 

Loss of sales 

The news of a data breach can erode trust in a company, which often results in a loss of customers, and quickly dries up a sales pipeline.

Perhaps worse, is losing customers who leave because of non-performance (employees are dealing with the data breach instead of supporting customers).

Long-term costs

The long-term impacts from a breach could linger for years and include:

  • Operations disruption or loss of business
  • Litigation, fines, fees or liability claims
  • Loss of customer trust relationship
  • Loss contract revenue
  • Deficit spending

On average it takes 69 days to contain a breach, but it often takes years to recover revenue, and return to normal growth levels.

It’s clear that the recovery process is costly in both time and resources.  The good news is organizations can prevent many cyber attacks by taking proactive and preventative measures such as:

  • risk assessments
  • vulnerability management
  • least privilege practices
  • awareness training and tabletop exercises

These cost-effective measures can mitigate security risks and save an organization from many problems.  If you’d like to discuss how to leverage them for your business, please contact us for a free consultation.