Where are we today?
Almost on a daily basis, we are bombarded with news of cyber attacks, breaches, data leaks and more. It’s as if cyber related issues are becoming a norm, so much so someone was quoted saying “ There are 2 types of organization; the ones that has been breached, and the ones that have yet to be”. As such, all organizations are putting emphasis on spending for continuity, and one question gets asked quite frequently. How much is enough? Is there a magical percentage that a CEO needs to consider as part of healthy spending to ensure that the safeguards are sufficient to manage today and tomorrow’s risk?
While there are research done on average spend buy organization, that is not an accurate reflection of what a particular organization’s spend pattern for protection of its assets. This article aims to demystify the topic on technology debt, using Security as a factor, in order to identify right-spending for an organization. Technology debt is just one of the consideration to put into place when evaluating tech spend vs. security spend as a consideration.
What is a technology debt?
A debt is defined as owing. When someone borrows money, they are obliged to return in (in most instances with an interest). A technology debt concept is no different than a conventional debt, however it is in the form of considerations, protection and governance aspect in rolling out current and new technology.
The concept of interest in technology debt is the occurrence of an event which creates an additional burden to the organization. Example, a cyber breach causes additional overheads from manpower utilization, engagement of relevant third party for services such as recovery, forensics as well as additional expenditure incurred.
Does Technology incur a debt? How does it work?
To illustrate technology debt, there will be 3 examples on how technology debt is incurred.
An end user procures a computer for home use. He gets the operating system installed and starts using. He/She finds the computer very useful and engaging, starts using it for not just work/assignments, but also for personal content consumption such as videos, websites and even social media. One day, the user encounters a phishing email, which leads to downloading an attachment which infects the user with a ransomware. As his work is important and needs to be sent to the customer, the user ends up paying the ransom.
For this case, the tech debt was incurred at the point of starting the use the computer. The debt was to ensure that the computer was secured, had the necessary protection in place, such as endpoint protection and phishing alert. Because the debt as been incurred, the user ends up paying with interest, i.e. the ransom in order to retrieve the data.
Question: does the debt end here? Yes and no. While the ransom is paid (interest), the debt (principal) is still there. The debt goes away when the user secures his endpoint/laptop/machine and removes the “debt” altogether.
A hardware store has purchased a Point-of-Sale (POS) terminal for use, primarily to ensure sales tax calculations are done and the reports made available for submission to the authorities. There is a thermal printer to print out the receipts, with the computed tax value as per regulations. A barcode scanner is attached to make it easy to input item code for the data capture during checkout. It became very convenient, so much so that even the inventory was managed effectively. Life seems to have been easier, thanks to the new technology. The POS came with 1TB hard drive, which makes it almost impossible to fill it up.
One day, for some unfortunate reason, the hard drive in the Point-of-Sale machine crashed. This resulted in some inconvenience as the the items have to be manually computed. Because of the convenience of the POS system, the prices are no longer printed as the reliance is towards product barcode. A manual list with the prices had to be derived after calling the vendors for price confirmation. What made it worse? The taxation department decides to show up for an audit, demanding to see the taxation report that was suppose to be produced adhoc as part of system requirement for taxation.
The technology debt in this case is the inability to backup and restore the system. While the reliance of the system is good, the debt (backup/recovery) had been incurred, and the user ended up paying interest (fines due to non compliance, additional recovery services, manual process institution, time wastage).
A mobile app development firm has purchased a server to store their source codes. The server is backed up daily using DVD and a copy is kept in a separate site. The server is configured with detailed access control list to ensure only the right people have access to the right set of codes.
A disgruntled employee decided to take matters into his/her own hands and deleted portion of the codes on the day he/she was leaving. The manager discovered the issue when reviewing the CI/CD logs during build failure and found files missing. Upon inspecting the version control software, identified the malicious action that has taken place. The manager proceeded to recover the part of the tree that was lost, and compared it against the backup that was kept to ensure that the changes made were consistent.
This case shows zero debt scenario. While deploying the solution, the IT team took into consideration requirements for backup, audit logs and continuity plan. When a potential “interest” scenario came up, because the debt was zero, there was none/minimal impact to the organization.
How does tech debt influence budgeting?
As technology gets deployed, as illustrated above, debt starts coming in. In some organizations, the debt is addressed up front as technology is deployed to avoid interest. Some organizations pan out the debt over time, in hopes that the interest will never come up.
How does this influence budgeting? The budget to manage security will include ensuring that the debt is being addressed timely. For organizations that has incurred debt, in order to zeroize the debt, expenditure needs to be done. As budgets are usually one line item for an organization, this then is seen in the percentage split between IT spend vs security spend.
Hence, for some organization which heavy tech debt, the budget will be more towards resolving the debt rather than expansion of IT. The percentage split will be skewed as the debt now influences the spend percentage.
Another reason why the spend will be skewed is when the interest come into play. Due to an incident, the interest becomes mature and payable. This creates additional expenditure which eats up into the budget. Post incident usually sees organization putting more emphasis into governance and control, almost having a blank cheque to show commitment, including in most instances, hiring a CISO that reports directly to CEO and Board.
The result, difference in spend percentage compared to overall budget based on level of debt resolution, depending on the state of the organization. Mature organization depends on resolving debt as the technology is incorporated, while other play catch up, due to business and budget limitation. What’s important is to be mindful that the debt may spring an interest at any time, causing organization to end up spending more. Delayed investment may result in heightened expenditure.
While the scenarios presented above may be simplistic, it is worth remembering that technology debt is often multi-dimensional and require an in-depth study to ascertain the respective areas of protection required. In the future article, we can discuss about this aspect of multi-dimensional tech debt and how to look at resolving the debt and preventing interest.
The crux of this article was to make a clear distinction between why different organization had different budget spend split. Though a baseline of spend helps CEOs identify whether the spend is healthy, understanding the technology debt help to justify why the spend needs to be more for some organization. While most organizations look at analyst report on average security spend, it is wise to ensure that technology debt is kept at check to ensure lack of interest popping up.
Perhaps if there is enough interest, then I can write up on identifying and resolving technology debt.