How to help your clients with their cybersecurity budget for next year

Crafting an adequate cybersecurity budget is paramount for any organization, and this is one key way MSPs can help their clients. As their primary defender, you need to build budgeting strategies that are comprehensive and adaptable. A well-structured budget doesn't just address immediate threats; it lays the groundwork for future-proofing against evolving cyber challenges. 

This guide delves into the nuances of helping your clients with cybersecurity budgeting. We'll discuss best practices and factors influencing budget decisions and provide a step-by-step approach to ensure client budgets align seamlessly with current and future organizational needs.

What impacts a cybersecurity budget? 

Many variables influence cybersecurity budgets, ranging from the business's size to the network's complexity. Data from recent years shows that more organizations are consistently increasing their investments in cybersecurity, which means more potential clients for you.

According to forecasts, global spending on security and risk management will reach $188 billion in 2023, up from $158 billion in 2021. Cybersecurity expenditures are anticipated to continue to rise, reaching $267.3 billion by 2026. 

Despite these substantial financial commitments, breaches of corporate networks and systems remain a pressing concern, underscoring the need for a strategic and well-allocated cybersecurity budget.

Several external factors and trends significantly influence cybersecurity budgets:

• Regulatory changes: Updates to data protection laws can necessitate new compliance measures, affecting the budget allocation towards legal consultation and software updates.
• Threat landscape: The ever-evolving nature of cyberthreats such as ransomware or phishing attacks can lead to increased investment in advanced security solutions.
• Technological advancements: Adoption of new technologies like IoT devices or 5G can create new vulnerabilities, requiring updated hardware or software solutions.
• Labor market: Fluctuations in the availability and cost of specialized cybersecurity talent can have a direct impact on budget allocation for in-house or outsourced staff.
• Client complexity: As clients diversify their technology stacks or undergo digital transformations, increased complexity could mean more robust security measures, impacting the budget.
• Competitive landscape: Market pressures to offer cutting-edge services may accelerate investment in new security solutions.

Creating a cybersecurity budget 

To help your clients make the most of their cybersecurity budget, know that creating a well-balanced budget involves more than simply allocating funds to various technologies and initiatives. The process requires a comprehensive approach that includes risk assessment, resource evaluation, and strategic alignment with overall business goals. To navigate these complexities for your clients, let's delve into each key aspect of budget planning.

1. Assess and analyze your client’s current cybersecurity landscape 

Understanding the cybersecurity landscape is the starting point for intelligent budget allocation. This entails a comprehensive review of your client’s existing tools, protocols, and policies. Ask yourself, are their systems up-to-date and robust enough to neutralize contemporary threats?

Security threats pose variable risks—some may only induce minor disruptions, while others can incur severe financial or reputational loss. A keen understanding of these potential impacts equips you to help clients make informed budget decisions, assuring optimal security for their business and clientele.

One thing that goes hand in hand with offering clients cybersecurity advice is making sure your MSP’s knowledge is up to date as well. External resources like the ConnectWise Cyber Research Unit and ConnectWise Certify offer critical insights into effective cybersecurity measures and the threat landscape as it changes over time. Having a better internal knowledge of cybersecurity trends and needs helps you provide the best cybersecurity possible.

2. Define objectives and KPIs 

Defining clear objectives and Key Performance Indicators (KPIs) is not just strategic planning; it's a fundamental step in effective budget allocation for cybersecurity. Start by identifying the cybersecurity risks unique to your client’s environment, as they will form the basis for their budgeting objectives.

Budgeting in cybersecurity is more nuanced than merely setting aside a lump sum; it necessitates a strategic approach. Make sure your clients establish an annual budget that incorporates regular financial reviews, ensuring that spending aligns with evolving threats and organizational objectives. They can use KPIs to measure the effectiveness of their resource allocation, adjusting budget as needed to meet or exceed these indicators.

Along with this, make certain that client cybersecurity goals don't exist in a vacuum, but are intrinsically linked to their overall business strategy. A budget aligned with business objectives ensures that cybersecurity investments also contribute to business growth and competitive positioning. One great time to make sure this is on track is using quarterly business reviews (QBRs). These reports allow your team to take a greater look at client finances and make sure that budgets are being allotted in a way that matches their business objectives.

By tightly weaving objectives and KPIs into a cybersecurity budget, your clients have a roadmap that is both financially responsible and strategically sound.

3. Create an inventory of IT assets 

A comprehensive inventory of your clients’ IT assets is not just a cybersecurity best practice; it's a cornerstone for cost-effective budget allocation. The inventory should include all assets—software, hardware, networks, and data—as these serve as the pillars of your cybersecurity strategy.

Begin by categorizing IT assets based on their criticality and sensitivity. Recognizing the varying degrees of value and risk among assets enables you to help your clients prioritize your cybersecurity investments more wisely. For example, a customer database would naturally command more of your budget than a short-lived marketing microsite.

It's imperative to go beyond just creating an initial inventory. Regular updates allow clients to adjust their budget allocation in real-time, responding to changes in IT environment, business strategy, and emerging threats.

Being precise with an IT asset inventory leads to more accurate budgeting, enables cost reductions where needed, and ensures that essential items receive the financial resources required for optimal protection.

4. Prioritize risks 

While a comprehensive IT asset inventory informs clients of where they are currently allocating resources, prioritizing risks drives the forward-looking aspect of the budgeting process. Guide your clients to allocate funds based on detailed risk-based vulnerability management, zeroing in on the most critical vulnerabilities that pose the highest potential impact.

Risk prioritization isn't solely about setting aside finances; it's an exercise in strategic expenditure. Address only the most high-impact risks first to optimize your investment and secure the most vulnerable aspects of your clients' operations. This focused approach will yield greater ROI on their cybersecurity spend.

Your risk landscape isn't static; it morphs with the emergence of new threats and vulnerabilities. A dynamic financial strategy is key: regularly reassess risk priorities and suggest adjusted budget allocations accordingly. This ensures client cybersecurity measures stay agile and cost-effective in combating evolving threats.

5. Allocate budget for various resources 

Effective cybersecurity depends on a well-considered, strategically allocated budget that spans various key areas: infrastructure, personnel, training, tools, and third-party services. A well-balanced budget does more than address risks; it positions the organization to respond proactively to diverse types of threats. For example, while investments in infrastructure secure the networks, budget allocation for training fosters a culture of security awareness.

In terms of personnel costs, it's important to note that according to the Bureau of Labor Statistics, cybersecurity analysts earn an average salary of $119,860 per year. This doesn't include additional expenses like benefits and specialized training. Specialized roles, such as security analysts and incident responders, are not just job titles; they act as the line of defense between minor glitches and significant system breaches. Consequently, their ongoing training on the latest threats and defense mechanisms is crucial. 

MSPs have the ability to reduce client spend in this area by virtue of supplying their specialized expertise and providing additional support hours. With this said, you may want to guide clients to spend some budget on training, as we will cover later on.

6. Estimate costs for technology and tools 

Technology and tools are vital in cybersecurity, with the increasing complexity of the digital landscape demanding a broad range of security tools. This encompasses security software, firewalls, intrusion detection systems, and encryption tools. Each device has a distinct function in protecting an organization's digital assets.

In cybersecurity budgeting, considering the long-term financial implications of tools and services is vital, not just the upfront costs. Account for ongoing licensing and maintenance fees, as they can significantly impact the total cost of ownership. For MSPs, aligning with partners who offer cost transparency is crucial for helping your clients with accurate budget planning.

For instance, a security software's affordability at the point of purchase could be deceptive. Recurring payments for licenses and updates may, over time, eclipse the initial cost, making a total expenditure analysis imperative. 

7. Allocate funds for training 

Cybersecurity extends beyond tools and technologies; ensuring that users are knowledgeable and vigilant is pivotal. Encouraging your clients to invest in employee cybersecurity training strengthens an organization's defense against cyberthreats. Training can range from detailed workshops on specific threats to certifications that affirm an employee's cybersecurity proficiency.

While the importance of cybersecurity tools is undeniable, an organization's human element remains a vital line of defense—and a significant vulnerability. Therefore, a budget-focused perspective on training becomes paramount.

Human error is often a primary entry point for cyberattacks. Thus, allocating funds to train client staff on recognizing phishing attempts and social engineering schemes offers a high return on investment. Employees need to be well-versed in digital vigilance, from identifying phishing email red flags to securely managing access credentials.

Likewise, with the increasing use of personal devices in corporate settings, budgeting for education on device security is non-negotiable. Additionally, a focus on physical security—like secure storage of devices and confidential documents—merits its own budget line item to prevent unauthorized data access.

8. Create a contingency fund 

Clients should establish a contingency fund within their budget for unforeseen security incidents and emerging threats. Even with robust capabilities to detect and remediate various cybersecurity threats, it’s important to expect the unexpected. A contingency fund becomes indispensable when dealing with such uncertainties. This should be a key part of any budgetary guidance for MSP clients. A well-planned contingency fund provides a financial cushion and enables rapid, expert intervention in worst-case scenarios

It’s also important that MSPs practice what they preach in this area. Setting aside resources for unexpected expenses like security breaches or sudden infrastructure failures allow you to support your clients with specialized services like the ConnectWise Incident Response Service. 

This service provides real-time incident management and post-incident monitoring, ensuring you can return your client to normal operations as quickly as possible.

9. Get approval from key stakeholders 

Cybersecurity decisions impact the entire organization, making it vital to present budget proposals to key stakeholders across various departments. These stakeholders bring diverse views on the company's priorities, risks, and financial standing, making their input invaluable.

When presenting the budget, clients need to be able to clearly convey the reasoning behind each allocation. Detail the costs, benefits, and expected returns. As an example, stakeholders should understand how new security software mitigates threats, its advantages, and its alignment with overall cybersecurity policies.

These discussions also need to highlight the overarching benefits to the organization, such as averting financial losses from breaches, safeguarding the company's reputation, and ensuring compliance. Leveraging industry insights and best practices can strengthen the proposal, emphasizing the need for proactive and adaptable budgeting in the face of evolving cyberthreats. MSPs can play a vital role here by taking complete technical insights and making them into accessible, actionable info clients can present to internal stakeholders.

10. Leverage cloud solutions 

You're at the forefront of protecting your clients in an ever-evolving digital landscape. Encouraging them to embrace cloud solutions can offer a significant edge. These cost-effective platforms grant unparalleled flexibility and scalability compared to traditional on-premises systems. 

Adopting cloud solutions can be a strategic move, offering cost-effectiveness alongside operational benefits. These cloud platforms provide scalable services that adapt to your needs, allowing small and mid-sized businesses (SMBs) to manage costs effectively during their digital transformations.

Cloud migration, when conducted securely and in accordance with best practices, mitigates several potential financial pitfalls. These could range from data loss to non-compliance fines. Encouraging your clients to move toward the cloud is a prudent budgetary choice. This positions your client's business not just for immediate threat mitigation but also for sustainable, long-term financial planning in the face of evolving cybersecurity challenges.

11. Regularly review the cybersecurity budget 

One recurring theme we’ve covered so far is the fact that budgets are going to change. From accounting for new threats to new staffing needs to new resources,  a client’s budget will never be set in stone. The first step in creating an adaptive budget is having a regular cadence of review. Your team and their team both should know if the budget is meeting client needs, and if it needs to be adjusted, what resources are available to make those changes. 

Effective communication with stakeholders is also paramount. By presenting a well-reasoned budget backed by research, trends, and a clear understanding of the organization's challenges, stakeholders can grasp the potential threats and the benefits of proposed solutions. This underscores the importance of cybersecurity in today's digital age and fosters a culture of informed decision-making.

For MSPs looking to help client organizations further fine-tune their cybersecurity strategies, ConnectWise's resources can offer a wealth of information. In particular, our guides, designed to align with the challenges and opportunities in the current MSP landscape, focus on critical operational and strategic planning elements, serving as an instrumental resource for those striving for excellence.

How cybersecurity solutions support staying within budget 

Efficient cybersecurity solutions offer a streamlined approach to budget optimization by providing multi-functional and scalable tools that adapt to evolving threats. This not only ensures client digital asset security but also results in long-term financial efficiency.

When selecting cybersecurity solutions, opt for integrated platforms like unified threat management systems, which consolidate multiple security functions—firewalls, intrusion detection, and antivirus—into a single platform. This cuts down on manual monitoring and associated labor costs, giving your clients more value for their MSP investment.

To make an informed investment, experiencing the solutions firsthand is crucial. Free cybersecurity software demos from ConnectWise offer a practical opportunity to explore these multi-functional tools. Though these demos aren't solely geared toward budget optimization, they provide a comprehensive view of features that contribute to a cost-effective cybersecurity strategy.