• Journal of Information Technology Services
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• v.18 no.5
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• pp.155-164
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• 2019

With the emergence of new ICT technologies, information security threats are becoming more advanced, intelligent, and diverse. Even though the awareness of the importance of information security increases, the information security budget is not enough because of the lack of effectiveness measurement of the information security investment. Therefore, it is necessary to optimize the information security investment in each business environment to minimize the cost of operating the information security countermeasures and mitigate the damages occurred from the information security breaches. In this paper, using genetic algorithms we propose an investment optimization model for information security countermeasures with the limited budget. The optimal information security countermeasures were derived based on the actual information security investment status of SMEs. The optimal solution supports the decision on the appropriate investment level for each information security countermeasures.

• Journal of Information Technology Applications and Management
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• v.15 no.1
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• pp.139-152
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• 2008

Recently organizations identify information security as one of essential means for gaining competitive advantage. However, they do not actively increase investment in this area because they consider spending for information security as a cost rather than an investment. This is because organizations don't have a clear understanding of information security objectives which can be achieved through investment, and they don't have criteria for alternatives which can be considered in information security investment decision-making. In this paper we propose to model the decision-making process of information security investment by the AHP (Analytic Hierarchy Process). The results will show that availability is the most important criterion for the decision of information security alternatives, and intrusion detection is the most important information security alternative. We hope that the results of this paper provide a guideline for clear decision-making in information security investment.

• Journal of Information Technology Services
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• v.17 no.1
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• pp.33-45
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• 2018

Recently, many South Korean firms have suffered financial losses and damaged corporate images from the data breaches. Accordingly, a firm should manage their IT assets securely through an information security investment. However, the difficulty of measuring the return on an information security investment is one of the critical obstacles for firms in making such investment decisions. There have been a number of studies on the effect of IT investment so far, but there are few researches on information security investment. In this paper, based on a sample of 76 investment announcements of firms whose stocks are publicly traded in the South Korea's stock market between 2001 and 2017, we examines the market reaction to information security investment by using event study methodology. The results of the main effects indicate that self-developed is significantly related to cumulative average abnormal returns (CAARs), while no significant effect was observed for discloser, investment characteristics and firm characteristics. In addition, we find that the market reacts more favorably to the news announced by the subject of investment than the vendor, in case of investments with commercial exploitation. One of main contributions in our study is that it has revealed the factors affecting the market reaction to announcement of information security investment. It is also expected that, in practice, corporate executives will be able to help make an information security investment decision.

• Journal of Intelligence and Information Systems
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• v.26 no.3
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• pp.37-50
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• 2020

Information security has become an important issue in the world. Various information and communication technologies, such as the Internet of Things, big data, cloud, and artificial intelligence, are developing, and the need for information security is increasing. Although the necessity of information security is expanding according to the development of information and communication technology, interest in information security investment is insufficient. In general, measuring the effect of information security investment is difficult, so appropriate investment is not being practice, and organizations are decreasing their information security investment. In addition, since the types and specification of information security measures are diverse, it is difficult to compare and evaluate the information security countermeasures objectively, and there is a lack of decision-making methods about information security investment. To develop the organization, policies and decisions related to information security are essential, and measuring the effect of information security investment is necessary. Therefore, this study proposes a method of constructing an investment portfolio for information security measures using game theory and derives an optimal defence probability. Using the two-person game model, the information security manager and the attacker are assumed to be the game players, and the information security countermeasures and information security threats are assumed as the strategy of the players, respectively. A zero-sum game that the sum of the players' payoffs is zero is assumed, and we derive a solution of a mixed strategy game in which a strategy is selected according to probability distribution among strategies. In the real world, there are various types of information security threats exist, so multiple information security measures should be considered to maintain the appropriate information security level of information systems. We assume that the defence ratio of the information security countermeasures is known, and we derive the optimal solution of the mixed strategy game using linear programming. The contributions of this study are as follows. First, we conduct analysis using real performance data of information security measures. Information security managers of organizations can use the methodology suggested in this study to make practical decisions when establishing investment portfolio for information security countermeasures. Second, the investment weight of information security countermeasures is derived. Since we derive the weight of each information security measure, not just whether or not information security measures have been invested, it is easy to construct an information security investment portfolio in a situation where investment decisions need to be made in consideration of a number of information security countermeasures. Finally, it is possible to find the optimal defence probability after constructing an investment portfolio of information security countermeasures. The information security managers of organizations can measure the specific investment effect by drawing out information security countermeasures that fit the organization's information security investment budget. Also, numerical examples are presented and computational results are analyzed. Based on the performance of various information security countermeasures: Firewall, IPS, and Antivirus, data related to information security measures are collected to construct a portfolio of information security countermeasures. The defence ratio of the information security countermeasures is created using a uniform distribution, and a coverage of performance is derived based on the report of each information security countermeasure. According to numerical examples that considered Firewall, IPS, and Antivirus as information security countermeasures, the investment weights of Firewall, IPS, and Antivirus are optimized to 60.74%, 39.26%, and 0%, respectively. The result shows that the defence probability of the organization is maximized to 83.87%. When the methodology and examples of this study are used in practice, information security managers can consider various types of information security measures, and the appropriate investment level of each measure can be reflected in the organization's budget.

• Knowledge Management Research
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• v.20 no.4
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• pp.39-55
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• 2019

Although Firms have been increasing their information security significantly to handle increased security risks, the effects of information security were not well understood. This study aims to investigate the market value of information security by employing the event study methodology. Our research also explores how market responses vary depending on the type of information security announcements. We collected 177 firm-level information security announcements between 2001 and 2017 in South Korea. For all samples, our results indicate that the stock market positively reacts to information security announcements. We also conducted subsample analysis and found that while information security certification announcement has a positive impact on the stock market, information security activities (e.g. award, information security system) announcement had no impact on the stock market. Our study adopted a novel approach (i.e. event study) for investigating the effects of information security and found that information security investment positively affects firm value. Our results allow managers to measure the effects of information security investment and help them make right decisions on information security investment.

• Journal of Korea Society of Digital Industry and Information Management
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• v.12 no.2
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• pp.73-86
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• 2016

The purpose of this study is to examine a security investment for firms experienced in confidential information leak. Information security is an apparatus for protection of secret information. The competence of information security is a competitiveness to avoid information leakage in changing business environment. The type of information security is divided into administrative security, technical security and physical security. It is necessary to improve the incident correspondence competence through information security investment of the three types. Therefore, the investment of information security is to enhance information-asset protection of firms. To reinforce accident response competence, an organization discussed an establishment, security technology development, expand investment and legal system of the security system. I have studied empirically targeting the only information leak of firms. This data is a technical security competence and technology leakage situation of firms happened in 2010. During recovery of the DDos virus damage on countries, company and individual, the collected data signify a reality of information security. The data also identify a security competence of firms worrying information security management. According to the study, the continuous investment of information security has a high competence of accident correspondence. In addition, the most of security accidents showed a copy and stealing of paper and computer files. Firm on appropriate security investment is an accident correspondence competence higher than no security investment regardless of a large, small and medium-sized, and venture firm. Furthermore, the rational security investment should choose the three security type consideration for firm size.

• Journal of the Korea Institute of Information Security & Cryptology
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• v.27 no.4
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• pp.855-861
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• 2017

Gordon & Loeb[1] suggested that the optimal level of investment decision of an enterprise is the point that the marginal benefit(MB) of information security investment is equal to the marginal cost(MC). However, many companies suffering from information security incidents are not aware of the fact that they are experiencing information security accidents and can not measure how much they are affected. In this paper, I propose a model of information security investment decision making under the incomplete information situation by modifying the Gordon & Loeb[1] model and compare the differences in investment level. Under the incomplete information situation the expected return from the information security investment tends to be lower than that of actual information security investment, and the level of investment is also less. This shows that if a third party such as the government gives accurate information such as the rate of incidents of information security accidents and the amount of damages, companies can expand their investment in information security.

• Journal of Korea Society of Digital Industry and Information Management
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• v.19 no.2
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• pp.89-102
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• 2023

The purpose of this study is to examine what are the important variables for information security compliance and whether the information security investment by the industry is different. To comply with the information security policies, the organization must establish measures to prevent or resolve information security incidents. This research process consists of four stages, and the analysis method was conducted with the categorical regression analysis and the correspondence analysis. The first analysis analyzed the independent variables that affect security regulations compliance. The rest of the analysis was conducted by industry in the order of security compliance regulations, manpower investment, and budget investment. As a result of the first analysis, this had positive effects on an organization and personal information protection awareness, joint operation organization of information protection, manpower and budget investment, corporate size, and industry. The correspondence analysis was conducted from the second analysis to the fourth analysis and it analyzed the differences in information security investment by industry. The second analysis showed that the construction industry, science and technology industry, and finance industry have higher compliance with security regulations than other industries. The third analysis showed that the financial industry and the science and technology industry were higher than other industries. The last analysis showed that the financial industry was higher than other industries. The theoretical contribution of this study provided the basis for updating the information security theory. The practical contribution of this study requires government support to reduce information security deviations by industry.

• Journal of the Korea Institute of Information Security & Cryptology
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• v.23 no.6
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• pp.1207-1217
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• 2013

This study utilizes raw data from "Research on the actual condition of firms' information security" of KISA (2010) and constructs panel dataset to analyze a causal relationship between information security investment and security breach. Using Difference in Difference estimation method we find the following results. First, while the usual causality that information security investment reduces security breach is not supported, the reverse causality that security breach increases information security investment is well explained. Second, contrary to the conventional wisdom, firms in the finance/insurance business sector show the most significant reverse causality pattern.

• Journal of Korea Society of Digital Industry and Information Management
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• v.20 no.1
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• pp.119-131
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• 2024

The purpose of this study is to examine the operational performances by the investment level of information security in companies. The theoretical background summarized the meaning of information security, management information security, and network security. The research process was carried out in four stages. As a result of the analysis, the level of information security was classified into four groups, and the difference in operational performance was confirmed. According to the categorical regression analysis of the three dependent variables, independent variables such as network threats, non-network threats, executive information security awareness, industry, organizational size, and information security education all affected information security regulations, in-house information security checks, and information security budget investments. The theoretical implications of this study have contributed to updating the latest information security theory. Practical implications are that rational investments should be made on the level of information security of companies.