The biggest threat to your business is not your biggest competitor or a nimble start-up rival. It’s not financial missteps, lack of innovation, sales and marketing mismanagements or unproductive employees. It is the wave of data breaches that is spreading panic across public and private institutions as it becomes clear that not even the most advanced governments in the world have been able to secure their data networks against hackers.
Cyber theft is on the rise and it may be the worst challenge your company will ever face especially as so few enterprises are adequately prepared to deal with the likely consequences. This failure to protect information and data management systems against invasions by external parties, known and unknown, isn’t just another risk companies can hedge against. It is a menace that has the potentials for massive disruptions to enterprise planning and goals.
That’s why cyber security should be a prime concern to CEOs everywhere, the electronics supply chain included. Cyber threat can scuttle strategic initiatives, delay or derail the introduction of new products and destroy shareholder value, according to industry executives.
The nightmarish part of this security challenge is that enterprises are beginning to realize they cannot depend on government institutions, however advanced, for protection. While corporations have been hardest hit by hackers, the U.S. government too has experienced massive data breaches. Hackers have in the last year stolen personnel information and social security numbers of all federal employees during a digital invasion of the Office of Personnel Management.
Research reports indicate nearly half of all midsize companies have experienced a data breach but many of them did not find out until months after hackers compromised their security systems. The companies and institutions that have reported the theft of data and other sensitive information from their IT systems include medical firms, colleges, financial enterprises and manufacturers. The list is extensive and include Anthem, the U.S. Internal Revenue Service, JPMorgan, Harvard University, University of California, Irvine, Sony and Target.
Cyber security – the primary focus of this blog and which I will return to shortly – is but one strand of a range of challenges companies are facing as a result of the digitization of the global economy. It comes under the global umbrella of “Digital Disruption,” which executives at Cisco Systems Inc. believe “has the potential to overturn incumbents and reshape markets faster than perhaps any force in history.” Only about one-quarter of companies worldwide are taking actions to reduce the negative impacts of digital disruption on their operations, according to the results of a survey conducted by Cisco and the International Institute of Management Development (IMD), Lausanne, Switzerland.
"Every country, every city and every business will be required to become digital in order to thrive and survive in the new digital economy," said Martin McPhee, senior vice president, Cisco Consulting Services in the report. "The Global Center for Digital Business Transformation, which brings together digital disruption and education, will serve as a platform for executives to be educated on the why, what and how required for their digitization journey and the ultimate sustainability of their organizations."
If everything we do at the enterprise and consumer levels are being digitized the potentials for hazards are huge. One such risk that should be of paramount concern to electronics manufacturers and the industry supply chain is the security of data and systems used to manage operations. Unfortunately, it is also the least visible to many executives because it is at most enterprises simply a functional operation that’s not directly tied to sales, revenue generation and profitability.
I’ve attended or listened to hundreds of corporate presentations and most – 99 percent or more – have centered on financial results, mergers and acquisitions and other strategic management initiatives. Financial analysts love these stuff and CEOs like to dole out sales statistics, properly backed up with relevant sound bites. Few managers talk about or focus on the security of corporate systems once it’s been handed over to an internal CTO or external security guru.
Until the enterprise discovers a major security breach, that is. Take the example of Gregg Steinhafel, a 35-year veteran of Target Corp. who rose to the CEO position but was forced out when a security breach impacted 40 million customers in 2014. The CIO also lost her job and was replaced by another executive with a strong background in information security.
A data breach will cost an enterprise more than the loss of a valued employee, however. It can result in the disengagement of key customers, suppliers and stockholders. Corporate data isn’t just about bits and bytes anymore. It is the lifeblood of the organization and ensuring it is not secretly accessed by hackers should be a top priority for CEOs too and not just the CIO or the Chief Security Officer.
Bolaji Ojo is editor-in-chief and publisher of Electronics Purchasing Strategies. The views expressed in this blog are those of the author alone who promises to base his sometimes biased, possibly ignorant, occasionally irrelevant but absolutely stimulating thoughts on the subjective interpretation of verifiable facts alone. Any comments should be sent to the author at firstname.lastname@example.org.