Two-Thirds of Businesses Report Sales Delays Caused by Customer Data Privacy Concerns
January 25 2018 - 8:00AM
Data privacy concerns are causing significant sales cycle delays
for up to 65 percent of businesses worldwide, according to findings
in the new Cisco® 2018 Privacy Maturity Benchmark Study. In
addition, the study shows that privacy maturity is connected to
lower losses from cyberevents: 74 percent of privacy-immature
organizations experienced losses of more than $500,000 last year
caused by data breaches, compared with only 39 percent of
privacy-mature organizations.
Privacy maturity is a framework defined by the American
Institute of Certified Public Accountants (AICPA) and is based on
Generally Accepted Privacy Principles (GAPP).
The study surveyed nearly 3000 global security professionals in
25 countries regarding their privacy maturity and any effects of
data privacy on their business. A surprising two-thirds of
respondents indicated that data privacy was causing delays in their
sales cycles, with an average estimated delay of 7.8 weeks.
The pending May 2018 enforcement of the General Data Protection
Regulation (GDPR), the new law enacted to increase protections of
European Union (EU) citizens’ privacy and personal data, might also
be a factor in these delays. Customers are increasingly concerned
that products and services they buy provide appropriate privacy
protections. GDPR’s provisions apply to any company that processes,
stores, or uses this data.
Respondents were asked to assess their current privacy maturity
level, according to the standard AICPA model, which defines five
privacy maturity levels: ad hoc, repeatable, defined, managed, and
optimized. The study found that:
- The average sales delay for those with ad hoc maturity was 16.8
weeks, but delays decreased for businesses with higher privacy
maturity levels.
- Businesses with optimized privacy processes reported 3.4 weeks
of sales delay, which is an 80 percent reduction compared to ad hoc
organizations.
- Geography and industry also appear to play a significant role
in the length of delay.
Given these widespread and significant delays, every company
should assess its own situation to evaluate where customer privacy
concerns might postpone business. Aside from legal compliance,
depending on the potential revenue effects and their current
privacy maturity level, companies should explore the return on
investment of privacy process improvements and the beneficial
effects that deploying such measures could have on sales.
Cisco 2018 Data Privacy Maturity Benchmark Study
highlights
Data privacy concerns drive sales delays
- Companies in the government and healthcare sectors exhibited
the longest average sales delays—19 weeks and 10.2 weeks,
respectively—compared to other industries.
- Companies in the utilities, pharmaceuticals, and manufacturing
sectors reported the shortest average delays, all 3 weeks or
less.
- By geography, Latin America and Mexico are experiencing the
longest sales delays, at 15.4 weeks and 13 weeks,
respectively.
- China and Russia have the shortest delays, at 2.8 weeks and 3.3
weeks, respectively.
Privacy-mature organizations experience shorter sales
delays
- The average sales delay (in weeks) by privacy maturity stage
were as follows: ad hoc (16.8), repeatable (9.8), defined (5.1),
managed (4.4), and optimized (3.3).
- Since organizations in the defined stage experienced 70 percent
shorter sales delays vs. those in the ad hoc stage, companies might
benefit significantly from moderate improvements in privacy
maturity. Those that are “optimized” saw 80 percent shorter
delays.
Privacy-mature companies experience fewer breaches and
smaller losses from cyberattacks
- Overall, 53 percent of respondents reported losses greater than
$500,000 related to cyberattacks in the last 12 months.
- Privacy-immature companies (i.e., ad hoc stage) had the highest
percentage (74 percent), with the percentage decreasing with
increasing privacy maturity. The other levels were repeatable (66
percent), defined (49 percent), managed (43 percent), and optimized
(39 percent).
Given the potential effects of these delays on sales and
revenues, Cisco advises organizations to take the following
steps:
- Measure current delays: Assess the scope of
sales delays due to data privacy issues and understand how much
sales revenue might be affected by the delays.
- Assess root causes: Portions of a delay
may be caused by sales teams being unable to address customer
concerns, incomplete or inaccessible corporate policies, or
engineering/design issues. Executives need to know root causes to
determine resolutions.
- Establish ongoing metrics and targeted
initiatives: Regularly measure and track the sales delay
metric, and set priorities for appropriate investments to reduce
the delays.
- Explore effects on cyber losses: Assess
the cause of any data breaches and losses that might have been
avoided through more mature data privacy processes.
- Develop a data privacy and protection plan: If
such a plan does not currently exist, plan to create policies and
protocols that contribute to good security hygiene.
Read the Cisco 2018 Privacy Maturity Benchmark Study.
Supporting quotes
- Michelle Dennedy, Chief Privacy Officer,
Cisco:
"This research demonstrates that good privacy is good for
business, and organizations need to invest in data privacy
governance and process to reap the benefits.”
- John Gevertz, Chief Privacy Officer, VISA
Inc.:
“Privacy professionals and sales executives all know that
privacy/data protection concerns can slow the sales cycle. Having
good data to support that knowledge will help drive the actions
needed for improvement.”
- Dr. William Lehr, Economist, Massachusetts Institute of
Technology:
“This study provides valuable empirical evidence of the linkage
between firm privacy policies and performance-relevant impacts.
These results are indicative of the direction that future empirical
research on privacy, and cybersecurity more generally, should take
to better validate and focus our understanding of best practices in
these important areas.”
Supporting resourcesCisco 2018 Privacy Maturity
Benchmark StudyCisco Data PrivacyInfographic: Good Privacy is Good
for BusinessBlog: Are Customer Data Privacy Concerns Slowing Down
Business?Podcast: Good Privacy is Good for BusinessFollow
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