Compromised Digital Security Can Break Business Deals

In an ever-expanding and integrated global economy, firms get assessed by their ability to adapt to changing dynamics in the business landscape.

Investors look at how fast and effectively firms innovate to grow—organically or inorganically.

They gauge firms by looking at key business metrics like the Return on Equity (ROE), Return on Capital Employed (ROCE), Return on Assets (ROA) and a host of other ratios that determine firms’ profitability and liquidity standings. In addition, organizational culture—especially in the case of mergers and acquisitions—plays a crucial role for investors before they decide to make a transition in business.

But interestingly in the wake of increasingly digitized world, investors are now paying a close attention towards digital security. They discern among their possible buyout targets, the preparedness of the firms to defend against lurking cyber threats.

The internet giant, Yahoo has learned this truth the hard way. The company was up for a sale before a massive data breach made the possible sale an ominous task for the management.

Indeed, the telecommunication company, Verizon, which was interested in acquiring the internet company recently stated that the massive data breach has had a “material impact” on its deal to acquire the company.

It is premature to say whether the deal will be through. However, even if it goes ahead, one question which will linger and haunt Yahoo will be the inability to ensure its digital security, which might in turn, affect the valuation.

As digital technology proliferates it will usher breakthroughs and novel business models but it will also bring an element of risk for organizations. As data has now become a hot commodity in cyberspace, firm’s sensitive information is constantly under threat from both malicious insiders and external malefactors. The cost of data breach is rising. That’s why it is extremely critical for organizations to deploy a proper mechanism in place. Integrating Identity and Access Control Management, including the Privileged Access Management (PAM) / Privileged Identity Management (PIM) solution, in the IT ecosystem, can significantly cut the risks of data breach.

The bottom-line: A firm’s brand equity and investors’ perception will greatly hinge over its ability to fortify the digital security.

ARCON is a leading enterprise risk control solutions provider, specializing in risk-predictive technologies. ARCON | User Behavior Analytics enables to monitor end-user activities in real time. ARCON | Privileged Access Management reinforces access control and mitigates data breach threats. ARCON | Secure Compliance Management is a vulnerability assessment tool.

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