In a nod to the challenge of engaging security processes that go beyond protecting networks from outside attacks, 58 percent of the IT workers surveyed by ESG say they believe that the most significant threat to their sensitive information comes from insiders, through both malicious and careless activity.

"The good news is that we are finding that people are recognizing the problem around identifying, protecting, and classifying confidential data and intellectual property, and are willing to dedicate more money to those efforts, but the bad news is that this is still very much a manual process," says Jon Oltsik, the ESG analyst who authored the report (which was sponsored by data protection technology vendor Reconnex).

"Many companies clearly believe they are doing a good job, but the evidence of breaches and holes in their processes leads you to believe that there are many inaccurate delusions out there," Oltsik says.

"When you dig a little deeper and show them what type of data is stored on people's desktops and on file servers, most companies are surprised at the size of the problem," says the analyst. "The common thread in these companies is a lack of cooperation between different business constituencies. It is not just an IT problem, or a legal problem, or a business problem; and unless people view it as a corporatewide problem, their situation isn't going to improve."

IT consultants who are helping enterprises solve these problems concede that even the best companies are struggling to comprehend the scale of the data security issue.

As the volumes of information being maintained by large companies continue to grow exponentially -- in some case driven by compliance regulations such as the Sarbanes-Oxley Act and HIPAA -- businesses are challenged to stay abreast of the issue and gain true visibility into their operations.

"In general we find that companies have applied a lot of great technologies and feel that they are secure, but there's a general problem of not having enough of a budget to invest in even more tools that can be used to dig down further and gain better visibility into their operations," says Steve Suther, a senior information risk strategist at IT consultancy Getronics.

Before joining Getronics, Suther served as director of information security management at credit card giant American Express. Data security was a "huge problem" for Amex during his decade there, Suther says, as the company tried to protect itself and its customers while dealing with millions of service providers and merchants who processed its information and accessed its records.

Policing business partners is a monster challenge on its own. "One of the hardest areas to enforce your own information risk management programs, no matter how sound, is with third parties; even when companies can effectively map out all their internal business processes and identify who controls what,” Suther says. “It's still very difficult to get information about processes employed by third parties that may be touching the data."