220 “Vulnerability Avoidance” Investment: A Financial Justification of Expenditures for the Improved Resilience of Enterprises (PSAM-0463)

“Vulnerability avoidance” investments are seen by many corporations as a financial burden linked directly with lower productivity, increased costs, and lower profits. Such investments target the reduction of consequences associated with vulnerabilities of complex enterprises. Nevertheless they constitute expenses with no apparent return of investment similar to the one expected from productivity, marketing and advertising, or even quality improvement related investments.

A review of the experience of the chemical process industry which implemented process safety management (PSM) voluntarily or as a regulatory requirement indicates that investment in safety is sustainable, even profitable. Similar experience is reported in the domain of health, safety, and environment (HSE), as well as security investments.

What the industry is lacking is a systematic method to quantify the benefits of investment in the cost avoidance of the consequences of vulnerabilities of all kinds, such as the aforementioned (safety, security), and others such as external supply chain disruptions, and intra-company interdependencies.

In this paper we attempt a review on the business case of investments in defenses against enterprise vulnerabilities, and attempt to present the framework of a method for the justification of related expenditures.