blog-header

Securing Keys, Assets & People - News, Tech and Trends Blog

The True Cost of Asset Loss in a Digital World

Oct 23, 2018

As we all know, theft and asset loss are an unfortunate part of running a business. According to recent studies, 25% of employees have lost important assets relating to their job, and shoplifting combined with Employee Fraud and Theft cost retailers nearly $50 billion last year. While there are many tools to mitigate this loss, human error will always be present among even the most careful employees. 

According to www.seareach.plc.uk, 25% of employees have lost important assets relating to their job. Of those lost items, the most common items that have been lost include: 

Mobile Phones 

36% 

$300 - $1000 

Memory Sticks 

23% 

$5 - $80 

Tablets 

19% 

$400 - $1200  

Laptops 

14% 

$700 - $2000 

Power Packs or Chargers 

8%  

$20 - $60 

 

Cost-of-asset-loss

There is no question about the unfortunate cost of replacing expensive equipment that has been lost or misplaced, but the true price goes far beyond the actual cost of the equipment. Here are a few costs that we don’t think about: 

1. Potential Fines for Loss or Breach of Confidential Data. 

The vast majority of company devices being used by employees will carry some kind of sensitive, confidential or private data. If that data is breached and leaked, the fines charged for that data breach is hefty, and increasing exponentially. 

2. Productivity Loss while a Replacement Device is being Repurchased and Setup. 

Many of us rely on our devices completely for getting through the work day. How much revenue do we lose when a salesperson can’t do quotes or call customers because his phone is missing? Or because an IT guy or support person can’t respond to tickets? What about contractor who can’t complete his job because the tool he needs has gone missing? Any loss of work equipment eats up precious time during the day when real work needs to be done. 

 

3. Damages Caused by the Loss of Legal and Dangerous Items  

gun_locker_2Failing to secure unsafe or dangerous items such as weapons or chemicals can have much more dire consequences. If a weapon or firearm is not properly secured, it is just a matter of time before it falls into the wrong hands. Many Police and Law Enforcement offices are required to use special lockers to secure their weapons. But, you still see more and more instances of weapons being stolen from police officers.  
 
You would think the last place a criminal would want to rob is a police station, but unfortunately evidence and weapon theft has been increasing in recent years. In Washington DC alone, more than 350 firearms have been lost or stolen from DC-area police since 2011 

4. Loss of Intellectual Property 

The loss of Intellectual Property and having it leaked to competitor can be catastrophic. It’s hard to put a dollar value on losing your edge in business all due to someone learning your secret sauce, or getting early insights on key new products in your pipeline, or finding a critical piece of information that they use against you.  

While legal action may be an option to have damages paid out—not only does it first need to be proven that a competitor has illegally obtained that information—but businesses are required to demonstrate to the court that they have made a conscious effort to protect their assets. If the court does not believe you have done everything possible to protect your valued IP, they will do nothing to compensate those companies. In a Series from Former DuPont CISO on Trade Secret Protection for Manufacturers“The most alarming court judgments have set that value to ZERO if the manufacturer neglected to take proper action to safeguard its own secrets. This is a common defense tactic by those charged with corporate espionage. Judges have ruled that, absent proper IP stewardship, the potential value of stolen trade secrets doesn’t matter in the eyes of the law.” 

5. Time Spent Recovering Data or Re-Creating Lost Project Data

In the age of cloud storage and the widespread knowledge about always backing up your work, this should not really be an issue. Unfortunately, it happens more often than not when an essential piece of work, or a project that has taken weeks to complete, remains only on an employee’s hard drive. Or you may have a collection of key contacts and phone numbers that sit only on your phone. When that device goes missing, so does hours of hard work and so goodbye to your key contacts. The loss of hard work is extremely painful and having to redo what you’ve spent months working on can equate to some extremely high costs. 

6. Insurance Claims and Increased Premiums

Some companies may choose to insure items for theft and loss. The benefit of course being that, if you are insured, you can simply file a claim and the item is replaced. While this can be a great option for peace of mind, costs of an employee losing or having their business equipment stolen will still equate to the potential insurance claim excess and increased premiums, which over time can be much higher than the business itself taking the hit for replacement. The better option is to protect your assets up front, and avoid filing an insurance claim whenever possible. 

7. Cyber Security Risks 

We are all well aware of the potential damage of a cyber security breach, and a lost device gives an attacker an express route inside your company’s network. An effective cyber security protocol can definitely mitigate some of these risks, but you’re still in line for trying to control and minimize the damage.  Company-wide password reset and security updates are usually not too far behind.  

In the past, companies haven’t fussed too much at the light fines from regulators and authorities of losing or breaching of customer or employee information. But as fines increase, this cost is increasing substantially. Earlier this year, Hilton was hit with a $700,000 fine for spilling the credit card information of 350,000 customers. Fortunately for them, this number is extremely low compared to what they would have been charged if the breach happened a few months later, after the new regulation was implemented. Under the new regulation the fines have increased drastically: “Consider $2 per lost record versus $1,200 per lost record. That’s the difference between what Hilton will pay to New York State versus what it will pay to EU regulators once the GDPR takes effect.” 

8. Loss of Priceless Prototypes 

We’ve all heard stories of prototype loss. Major tech companies pour billions in to creating the latest and greatest new devices. There was a popular story recently of two Razer Laptop Prototypes being stolen and the company offering a reward of $25,000 each for their return. It’s very easy to determine the cost of losing an item you can simply replace. Losing a prototype or exclusive piece of intellectual property can be priceless. 

9. Costs go Exponentially as Employees Fail to Report Lost/Stolen Items 

When a device falls into the wrong hands, time is of the essence to deactivate or remotely cut ties to the compromised device. The problem is, most employees don’t report these loss or thefts right away, out of fear of being reprimanded, or out of hope the device will turn up. According to data released by Kaspersky, only 43 percent of employees report the loss or theft of a mobile device the same day it occurs. 38 percent of employees wait 1 to 2 days before reporting their device’s disappearance. And finally, nearly 1 in 10 employees (9 percent) wait 3 to 5 days. 
 
With a proper Asset Management solution, you can maintain an audit trail and even track the location of your valued devices. If a device isn’t where it should be by the designated time, you’ll know instantly you need to spring into action and address the problem. 

It’s very easy to see how lost items and data breaches cost your company big. According to the “Cost of a Data Breach study conducted by IBM in 2016, one in four organizations will be the victim of a crippling mega-breach in the near future. The average total cost of a data breach in 2016 was $4 million… and this cost is constantly rising. The study also reports that the costs for each lost or stolen record with confidential or sensitive information had increased from $154 in 2015 to $158 in 2016. These costs per stolen record vary by  industry, ranging from $355 for a healthcare organization, $221 for a financial organization, $145 for a technology company, to $80 for a public organization. 

Losing a valued asset is not good for anyone, and it’s clear to see costs go way beyond the value of the item lost. Employees are affected by obstructing productivity, losing essential work and valued information, and often don’t report the loss due to fear of being reprimanded. Companies lose by having to replace the items, and possibly having to face increasingly expensive fines for data breaches and leaked customer information.

What options do I have to protect my Assets? 

Asset Lockers are an excellent option to demonstrate you have gone above and beyond what is expected when it comes to protecting your valued IP. Asset Lockers are the best solution for tracking physical items such as prototypes, tablets, laptops, and mobile devices. They give you a full audit trail of exactly who accessed these company devices and when, and can be configured to trigger alarms if they exit the facility or are not returned to their compartment by a designated time—which comes with a charging bay for all those devices that need a recharge. Users are authenticated via Prox card, biometric fingerprint, PIN, or IRIS scan, so only those who have the requisite privileges will have access. Key Management Systems can do the same with facility or vehicle keys, keeping individuals out of restricted areas and away from valued assets.

To learn more about these solutions click below: 

electronic-lockers-secure-assets        Keytracer-key-tracking

 

Matt Belo

Written by Matt Belo

Matt formerly was the Inbound Marketing Coordinator for Real Time Networks.