By Scott Hunter, Regional Business Lead, Manufacturing, Microsoft Asia.
As the 4th Industrial Revolution continues to sweep through Asia Pacific, the manufacturing sector is at crossroads. One path leads to a future with unrivaled growth while the other leads to a difficult scenario where revenue streams risk being cut off abruptly as manufacturers struggle to stay relevant and competitive.
For many manufacturing organizations, the impact of digital disruption is clear. Obvious too, is the opportunity to ride this wave of disruption. The gross domestic product (GDP) in Asia-Pacific could be boosted by US$387 billion by 2021 if the manufacturing sector fully embraces digital transformation, according to a study by research firm IDC and Microsoft released last year.
However, this change must go beyond automation and productivity improvements. Manufacturing organizations must embark on the digital transformation journey to be able to uncover new business opportunities and open up possibilities never thought possible. For example, using data to identify new revenue streams and develop high-value service offerings focused on how products and customers interact in the real world.
But with the recent high profile cyberattacks against manufacturing organizations, many business and IT leaders may ask what good is going digital if it means that the organization’s operations can be easily derailed by a hacker?
There is no denying that connected products, people and things produce terabytes of data every day that manufacturers can access and extract deep insights to optimize business and manufacturing processes better than ever before. And given the distributed nature of manufacturing and global supply chains, this increasingly valuable information is often spread across multiple locations and systems. Keeping track and ensuring the secure exchange of data between thousands, if not millions, of devices, applications and industrial equipment can be a momentous task. The trove of data that manufacturing organizations possess also makes them an attractive target for cyberattack, underscoring the critical need for stronger security measures.
A 2018 Frost & Sullivan study that was sponsored by Microsoft revealed that there is a lot more to be achieved as 51 percent, of manufacturing organizations in Asia Pacific, have either faced a security situation or are not sure if they have had security incidents because they have not performed proper forensics or data breach assessment.
The study of 1,300 respondents from 13 markets across Asia Pacific also found that a large manufacturing organization incurs an average of US$10.7 million in economic loss with the cost of customer churn (US$8.1 million) being the largest economic consequence of a cyber breach. The other significant impact of a cybersecurity incident was job loss – three out of five (63 percent) manufacturing organizations confirmed job losses across different functions.
Today, the manufacturing sector faces a range of cyberattacks, according to the study. Respondents indicated that the incidents that have the biggest impact and take the longest to recover from are web defacement, remote code execution, ransomware and data exfiltration. In particular, remote code execution is unique to the manufacturing sector. This threat is more prevalent because attackers often seek to disrupt manufacturing production and sabotage business operations.
While organizations undergoing digital transformation can leverage technologies such as artificial intelligence (AI) and cloud services to bolster their cybersecurity strategy and defend against these cyberattacks, three in five (59 percent) manufacturing organizations in Asia Pacific have failed to take advantage of this. Instead of accelerating digital transformation, they are delaying the progress of digital transformation projects due to the fear of cyberattacks. This also prevents manufacturers from leveraging technologies to innovate, boost their operational excellence and sharpen their competitive strength.
Additionally, with 41 percent manufacturing organizations viewing cybersecurity as a reactive, tactical technology that “only” safeguards the organization and not a business enabler, they are unable to create trust with stakeholders, business partners and customers. Proper integration and implementation of cybersecurity in their digital transformation strategy allow manufacturers to wield technology more effectively to engage their customers, empower their employees, optimize their operations, and transform their products and services.
Clearly, there is a need for a mindset change if the manufacturing sector in Asia Pacific wants to embrace digital transformation and reap its full benefits.
Cybersecurity is an ever-evolving strategy and there are many ways for manufacturing organizations to reduce risk. Even maintaining the most basic best practices can avert most cybersecurity incidents and raise the cost of attack for cybercriminals.
Here are six best practices that manufacturing organizations can consider:
- Position cybersecurity as a digital enabler: By approaching cybersecurity as an enabler of innovation, manufacturing organizations can narrow the disconnect between security requirements and business needs while addressing their most complex privacy and data protection requirements.
- Leverage cloud as a platform: Manufacturers are typically subjected to a vast array of unique data security requirements and compliance standards for their own data and their customers’ data. Cloud solutions can help manufacturers meet these requirements by offering manufacturing organizations a broad range of tools and solutions to help protect data in ways that are just as safe—and often safer— than can be achieved through on-premises systems.
- Incorporate cybersecurity at the design phase: It is critical for cybersecurity strategies need to be factored in before a digital project starts and be incorporated in every stage of the project lifecycle – from design to deployment to operation – and in every connected device.
- Use AI to strengthen cybersecurity capabilities: The attack surface is growing exponentially thanks to the rapid proliferation of IoT devices. An AI-driven cybersecurity architecture will enable manufacturers to swiftly analyze and detect anomalous device behavior at scale and automate threat containment, bolstering the company’s security posture.
- Use integrated best-of-suite tools: Complexity is a big issue today, with too many cybersecurity solutions in a manufacturing organization causing confusion and difficulties. Simplifying the setup brings better results.
- Invest to strengthen fundamentals: Prevent cybersecurity incidents by maintaining the basics, such as strong passwords, multi-factor authentication and efficient patching, as well as enforcing a robust internal IT policy.
As manufacturers transform their business model, their most valuable business assets will increasingly migrate from the physical world, such as equipment and facilities, to the virtual realm. With cybersecurity becoming a core part of their digital transformation plan, manufacturers will be able to effectively address the complex security and compliance challenges and at the same time build trust within their ecosystem.
Tags: Cybersecurity, Manufacturing