Lost Laptop Can Cost A Company $49,246: Study

A new benchmark study by The Ponemon Institute, sponsored by Intel, came up with the staggering figure after sampling 29 U.S. organizations, which had 138 separate laptop losses within the preceding 12 months.

The values were based on seven cost components: laptop replacement, detection, forensics, data breaches, lost intellectual property, lost productivity, and legal, consulting and regulatory expenses.

The average cost of a lost laptop is $49,246, but the costs ranged as high as $200,000 or as little as $1,213. The costs depended on various factors, such as the amount of lost intellectual property, the number of data breaches that followed the loss, employee rank, type of industry, time of notification to the company, and level of security such as encryption.

"It's not the replacement cost that should have companies concerned," said Dr. Larry Ponemon in the report. "Rather, it is the data and the risk of a data breach that can have serious financial implications for companies. The cost of a data breach represents 80 percent of the total cost of a lost laptop compared to 2 percent for replacing the computer."

While data breaches represent the greatest costs to businesses, the second-highest cost component was attributed to intellectual property loss. Even when the cost of a data breach is removed, intellectual property loss represented 59 percent of the total cost.

Employees should report a lost laptop as soon as possible to lower the average cost. If a company discovers the loss in the same day, the average cost is $8,950. If it takes more than one week, the average cost surges to approximately $115,849.

Lost laptop costs are also correlated to an employee's position in an organization. Surprisingly, the most senior-level respondents do not experience the highest average costs. The average cost of a lost laptop for a senior executive is $28,449, while the highest average costs are $60,781 and $61,040 for managers and directors, respectively.

The study also found an inverse relationship between the average cost of a lost laptop and the existence of a full backup provision. The average cost of a lost laptop with a full backup is $69,899 as opposed to $39,253 when there is no backup system. Ponemon said a possible reason for this is that the backup makes it easier to confirm the loss of sensitive or confidential data.

Encryption also makes a big difference. When lost laptops have encryption, the average cost is $37,443. If it is not encrypted, the average cost is $56,165.

Ponemon recommended other cost-effective enterprise antitheft solutions for business laptops, including poison pills, data recovery capabilities and audit trails.

Costs associated with missing laptops also vary by industry, according to the study. The average full cost of a lost laptop is highest for businesses in services industries ($112,853), followed by financial services ($71,820), health care ($67,873) and pharmaceutical ($50,393).

The industries with the lowest average cost per lost laptop are retail ($8,756), consumer products ($2,194) and manufacturing ($2,184).

Lost productivity was the lowest-cost factor; when employees experienced downtime due to losing their laptops, it represented only 1 percent of the total cost.