You are the CEO of Hertrich Auto Dealerships Inc., one of the top automotive dea

Question

You are the CEO of Hertrich Auto Dealerships Inc., one of the top automotive dealer chains in the nation based out of Wilmington, DE. Your company receives more than 1,000,000 email messages per year. On average, there are 0.75 successful hackings against the company each year through phishing attacks, which result in losses of about $500,000. Currently, you have very good anti-virus software installed but no firewalls. Your CIO is suggesting implementing a 'phishing prevention appliance' (PPA) for a TOTAL cost of $ 125,000. The estimated life of the PPA is about 3 years. The chances of the PPA failing (missing some potential 'bad' emails) and allowing attacks to happen are about 10%. Annual maintenance costs on these PPAs about $ 35,000 in total (including all costs.) Would you accept your CIO's recommendation? Why or Why not? Explain your decision, the process behind making it, the analysis and implications (monetary and otherwise.

Explanation / Answer

If not installed then the Loss per year is $ 500,000

Now 0.75 eqivalents to $ 500,000

Therefore 0.10 eqivalents to $ (500,000/0.75)*0.1= 66666.67

If he installs the PPA then the costs per year are

Saving per year with the new machine per year = $500,000 - 143,333.34 = $ 356,666.67

we shold go with the CIOs advice as its saves 356,666.67 Dollars per year

More over Information security is very critical to a firms reputation. Whic will result in opportunity cost all which cant be quantified.

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