The Cost of a Manufacturing Cyberattack in 2019
Understanding peripheral costsIt’s easy to think of the cost of a cyberattack in terms of raw dollars and cents. A hacker demands $50,000, a company pays it, and they’re out $50,000. But this is inaccurate. Whether or not they pay the data ransom, an organization will sacrifice tens of multiples more in additional costs. Take, for example, Erie County Medical Center in New York. The hospital thwarted a hacker’s attempt to ransom a mere $30,000 but ended up paying out more than $10 million in costs to remedy the situation. This example shines a light on the rippling costs of cyberattacks. And it’s not an extreme example, either! A recent study by Frost & Sullivan, commissioned by Microsoft, shows an average estimated loss of $10.7 million per breach of data among manufacturing organizations in Asia Pacific. It’s a number that will only get larger as hackers get bolder and more adept at penetrating the IIoT.
Breaking down the numbersAccording to the Frost & Sullivan report, a majority of the expenses of a hack comes from indirect costs. Roughly $8.1 million of the $10.7 million average are costs incurred by merely remedying the situation. Match this to Erie County Medical Center’s costs — which included everything from employee overtime to software upgrades to new hardware — and the real cost of a data breach becomes intimately clear. According to Threatpost, manufacturers can expect the cyberattack itself to cost about $1.7 million. This includes “unexpected budget expenditures and drops in stock values,” as well as the cost of remediating the immediate problem. But it’s only the start. Secondary costs start to roll in almost immediately, including:
- Customer disruptions, including churn
- Fines due to hacking incidents
- Productivity losses
- Overtime and extra staffing
Data breaches by the numbersThe worst approach a manufacturer can take is to say, “This won’t happen to me” — because ultimately, without proper foresight and planning, it will. Take a look at some of the data surrounding the rise of manufacturing cyberattacks in recent years:
- According to 2017 statistics, over 130 large-scale, targeted breaches occur in the U.S. per year — a number growing by 27% annually. (Accenture)
- A third of organizations (31%) have experienced cyberattacks on their IIoT infrastructure. (Cisco)
- In 2017, organizations spent nearly $11.7 million to recovery after a cyberattack — a number up more than 23% from the previous year. (Accenture)
- Damage related to cybercrime is projected to hit $6 trillion annually by 2021. (Cybersecurity Ventures)
While you focus on shoring up gaps in your IIoT, you can count on the professionals at Global Electronic Services to support your manufacturing repair needs. Contact us for all your industrial electronic, servo motor, AC and DC motor, hydraulic, and pneumatic needs — and don’t forget to like and follow us on Facebook!