Cost-Benefit Analysis of Two-Factor Authentication

C.

The total cost of ownership (TCO) would be the most relevant piece of information in that it would establish a cost baseline and it must be considered for the full life cycle of the control.

Annual loss expectancy (ALE) and the frequency of incidents could help measure the benefit, but would have more of an indirect relationship as not all incidents may be mitigated by implementing a two-factor authentication system.

The approved budget for the project may have no bearing on what the project may actually cost.

A cost-benefit analysis is a technique used to compare the expected costs and benefits of a project or decision. It is an important tool for decision-makers to determine whether a project or decision is worth pursuing, based on the potential benefits and costs involved. When conducting a cost-benefit analysis of a two-factor authentication system, the following factors should be considered:

A. Annual loss expectancy (ALE) of incidents: The ALE is an estimation of the amount of money that an organization can expect to lose annually due to security incidents. The ALE can be calculated by multiplying the probability of an incident occurring by the expected cost of the incident. A two-factor authentication system can reduce the probability of security incidents, thereby reducing the ALE. Including the ALE in the cost-benefit analysis can provide insight into the potential cost savings that can be achieved through the implementation of a two-factor authentication system.

B. Frequency of incidents: The frequency of security incidents is an important factor to consider when conducting a cost-benefit analysis of a two-factor authentication system. A two-factor authentication system can reduce the frequency of security incidents, which can lead to cost savings for the organization. By including the frequency of incidents in the analysis, decision-makers can better understand the potential benefits of implementing a two-factor authentication system.

C. Total cost of ownership (TCO): The total cost of ownership (TCO) is the total cost of a project over its entire life cycle, including initial implementation costs, maintenance costs, and replacement costs. Including the TCO in the cost-benefit analysis can help decision-makers determine whether the benefits of implementing a two-factor authentication system outweigh the costs. It is important to consider both the short-term and long-term costs associated with the implementation of a two-factor authentication system.

D. Approved budget for the project: The approved budget for the project is an important factor to consider when conducting a cost-benefit analysis of a two-factor authentication system. If the cost of implementing a two-factor authentication system exceeds the approved budget, it may not be a feasible option for the organization. By including the approved budget in the analysis, decision-makers can better understand the financial implications of implementing a two-factor authentication system.

In conclusion, all of the factors listed above are relevant to include in a cost-benefit analysis of a two-factor authentication system. However, the most relevant factor would depend on the specific circumstances of the organization and the project. The ALE and frequency of incidents can provide insight into the potential cost savings that can be achieved through the implementation of a two-factor authentication system, while the TCO and approved budget can help decision-makers determine whether the benefits of implementing a two-factor authentication system outweigh the costs.