Moore + Wright
Most people have heard of Moore’s Law, which relates to the tendency for the number of transistors (a device used in semiconductors to amplify the signals or electrical power) to double approximately every two years. This law (or observation) has remained true since 1965. Fewer people, however, have heard of Wright’s Law, the learning curve effect, which states that the more a task is performed the less time is required on each rendition. When these two laws operate simultaneously in a world of endless possibilities, such as manufacturing, amazing developments occur at an extraordinary rate of advancement. All you have to do is look around to see that we are living in incredible times as technology floods our homes, our work, and our schools – technology that, until very recently, we never thought possible.
Take the phone, for example. I remember rotary phones and having to memorize my friends’ and family members’ phone numbers – all 7 digits – which, at one point in time, was only 4 digits. As a kid, I had to “be home before dark” and no one worried. Now, as a parent in the 21st century, when my son tries to call his grandparents and gets a busy signal, he thinks the phone is broken. He lives in a connected world. Our kids today wear phones on their wrists, that have more computing power than the Apollo 11 and can track their every move and instantaneously connect them to anyone and anything in the world They can watch movies and buy goods all from this little device – goods that will be delivered to your door by a drone! You can turn your lights on in your house and lock your car, monitor the milk in your fridge, and keep an eye on your front door and your dogs – all from many miles away.
With Great Power Comes Great Responsibility
As the world becomes more connected, the risk for others to intercept critical information increases. In a recent Deloitte study, 39% of business owners experienced a breach in their information systems. 28% of them experienced a loss between $1,000,000 – $10,000,000. The top cyber threats for manufacturers are as follows:
• 1st – Theft of intellectual property
• 2nd – Phishing, pharming, and other related variants
• 3rd – Increasing sophistication and proliferation of threats
• 4th – Security breaches involving third party
• 5th – Social engineering
• 6th – Employee errors and omissions
• 7th – External financial fraud involving information systems
• 8th – Employee abuse of IT systems and information
• 9th – Mobile devices (smartphones, tablets, etc.)
• 10th – Attacks exploiting mobile network vulnerabilities
In Colorado, we have roughly 6,000 manufacturers of which 85% have fewer than 20 employees. These remarkable businesses are busy making their product and don’t always have the time or the trained technology professionals available to help them secure their infrastructure. According to Deloitte, the top 5 barriers and challenges to manufacturers regarding cyber risk is:
1. The increased sophistication of cyber attacks
2. The lack of sufficient funding to assess and implement a solution
3. Too much focus on compliance with regulations, versus focus on cyber risk management
4. Lack of documented processes
5. Lack of executive support
While we live in exciting times, we also live in scary times. These risks are real and can destroy a business and their reputation. Much like the recent shocking Experian breach, we all remember when Target was compromised in 2013. More than 40 million customers had their personal information stolen and had to get new credit cards. What many don’t realize is that the breach was only possible because hackers discovered an area of vulnerability through one of Target’s 3rd party vendors who provided refrigeration, heating and air conditioning services – a vendor who had worked at a number of locations at Target and other top retailers. In the end, however, it was Target who had to shoulder the blame. It was Target who had to pay an $18.5M multistate settlement and it was Target who had to work diligently to repair their reputation and earn back the trust of their consumers.
43% of cyber attacks target small business. Make sure you are protected.