South African organisations are giving information security top-level priority compared to their global counterparts. That is according to a survey released by audit and business advisory firm Ernst & Young.

The 2004 Ernst & Young Global Information Security Survey covered 1233 respondents from 51 countries. Of the 34 organisations sampled in South Africa, 59% of respondents are listed on the JSE Securities Exchange.

According to the findings of the survey, 42% of South African organisations rated information security as a top-level priority issue that was driven by the office of the chief executive. This compares with only 20% of global respondents who regarded information security as a CEO-driven issue.

According to the results of the survey, close to 70% of the respondents' boards of directors failed to receive a quarterly report about the organisations' information security status. This could prove problematic since information security is a critical component of organisational risk - something the board should have a handle on.

On the other hand, giving credence to the importance of information security, 14% of global respondents said their security department reports directly to the office of the chief executive. This compares with 28% of respondents whose security issues are handled by the chief information officer. The remainder have much lower representation which poses a challenge to these organisations to raise information security as an executive issue.

According to Grant Brewer, Ernst & Young partner for Information Systems Assurance & Advisory Services, the importance of information security becomes increasingly elevated as companies align the achievement of their objectives with a more robust information security system.

"As the dangers facing intellectual property become more pronounced and increasingly complex, information security becomes a top drawer issue. Understandably, as information security becomes a central feature of the company's operations, and as misperceptions about its importance are dispelled, the issue assumes a high-priority level within an organisation," says Brewer.

Brewer says companies can transform their view of information security, by approaching it as a way to gain competitive advantage and preserve shareholder value.

"However, this transformation must be led by a visible shift in attitude from the CEO and the board," he says. "It is interesting to note that too many organisations feel that information security has no value when there is no visible attack. This is a perception that has remained unchanged over the decade that Ernst & Young has been conducting this survey."

Being mindful of the increasing risks posed by information security threats, the respondents in the South African survey said they expected information security expenditure to increase by 50% over last year.

The majority of South African organisations sampled said government security regulations had an impact on their industry and organisations. This is in line with 44% global respondents who said government security regulations had a major impact on the industry and operations. Increasingly, South African organisations are also looking to international regulations like the Sarbannes-Oxley and EU 8th Directive as a guide to implementing more rigorous controls.

The survey also found that 67% of the organisations sampled rated information security as critical to achieving overall business objectives compared to 26% who rated information security as 'somewhat important'.

About 24% of respondents expressed confidence in their effectiveness in meeting the information security needs of their organisations, while 1% of the respondents regarded their security department as 'very ineffective' in meeting the needs of the organisation. In spite of growing awareness about the importance of information security among the respondents, the Ernst & Young survey found that organisations remained focused on external threats such as viruses while internal threats were generally neglected.

"Companies will readily commit to technology purchases, such as firewalls and virus protection, but are hesitant to assign priority to human capital," says Brewer, pointing out that no amount of technology can reduce the human threat. "While the public's attention remains focused upon external threats, companies face far greater damage from insider's misconduct, omissions, oversights or an organisational culture that violates existing standards."

He warns that although internal incidents have failed to generate media scrutiny this does not mean that employee misconduct does not happen. "On the contrary, they simply are either discovered but not made public, or even worse, undetected," notes Brewer.

More could and should be done by organisations to transform the skills and awareness of their people, who often present the greatest opportunity for vulnerabilities - and convert them into its strongest layer of defence, concludes Brewer.

For more information contact Ernst & Young, 011 772 3000.



2004 Global Information Security Survey: Quick facts

* Respondents listed 'lack of security awareness by users' as the top obstacle to effective information security, however only 28% listed 'raising employee information security training or awareness' as being a top initiative in 2004.

* Just 20% strongly agreed that their organisations perceive information security as a CEO level priority.

* 'Employee misconduct involving information systems' was cited as a distant number two concern behind 'major virus, Trojan horse or Internet worms' regardless of geographic region, industry or organisational size.

* Less than half of the respondents provided their employees with ongoing training in security and controls.

* Only 24% gave their information security department the highest rating in meeting the needs of the organisation.

* Only 11% deemed government security-driven regulations as being highly effective in improving their information security posture or in reducing data protection risks.



Information security market heats up

The increasing realisation that information security is integral to an organisation's risk profile is being translated into hard cash as evidenced by growing budgetary allocations towards information security. This is according to Ernst & Young's Shaun Nel, senior manager for Information Systems Assurance & Advisory Services (ISAAS).

"Information security budgets are enjoying an increased proportion of the IT budget. Recent discussions have shown that information security budgets are being increased from the current 1-3% range to between 6 and 9%," comments Nel. "And, this trend looks set to continue improving as organisations come to the realisation that a full information security solution is not as easy as implementing a firewall or anti-virus solution."

Pressed by the need to comply with a spate of regulatory directives like the King 2, Sarbanes-Oxley and the EU 8th Directive, Nel says companies are finally gaining a perspective on the pervasiveness and extent of information security as well as its role in risk management and prevention. However, the battle is not won - in spite of increasing awareness about the critical importance of information security, many organisations are yet to realise the value of their investment.

"The problem organisations are facing now, is how do we define, implement, justify and manage information security programmes in a manner which achieves the positive outcomes that management expects," Nel asks.

He notes that the attainment of security project goals hinges on effective goal setting, goal management, vendor management and aligning these to risk and compliance efforts.

For more information contact Shaun Nel, senior manager, ISAAS: Ernst & Young, 011 772 3000, shaun.nel@za.ey.com