In the event that the security of a system has been compromised, an incident response is necessary. It is the responsibility of the security team to respond to the problem quickly and effectively.
Incident response is simply an expedited response to an issue or occurrence. Pertaining to Information Security, an example would be a hacker who has penetrated a firewall and is currently sniffing internal network traffic. The incident is the breach of security. The response depends upon how the security team reacts, what they do to minimize damages, and when they restore resources, all the while attempting to guarantee data integrity.
Think of your organization and how almost every aspect of it relies upon technology and the computer systems. If there is a compromise, think of the potentially devastating results. Besides the obvious system downtime and theft of data, there could be data corruption, identity theft (from online personnel records), and embarrassing publicity or even financially devastating publicity as customers and business partners learn and react to news of such a compromise.
Research on past security breaches (both internal and external) shows that companies can potentially be run out of business as a result of a breach. At minimum, a breach can result in resources being unavailable and data stolen or corrupted. But one cannot overlook issues that are difficult to calculate financially, such as bad publicity. An organization must calculate the cost of a breach and how will it detrimentally affects an organization, both in the short and long term.