Sikich Report: Half of Manufacturers Experienced Data Breaches In Past Year

Naperville, Ill.-based Sikich (FY18 net revenue of $168.7 million), in a recent survey, finds that half of manufacturing companies have fallen victim to at least one data breach during the past 12 months, according to the firm’s 2019 Manufacturing and Distribution Report.

Of the 50% of respondents who said their companies experienced data breaches, 11% said they had experienced “major” breaches. Still, executives believe their companies can thwart attacks. A majority (54%) said they are “extremely” or “very” confident in the ability of their companies to prevent or minimize the impact of data breaches.

“Cybercriminals have moved on from focusing primarily on organizations rich in sensitive personal data, such as financial or health care institutions,” says Brad Lutgen, PIC of the firm’s cybersecurity practice. “Instead, they target any organization with IT weaknesses and attempt to turn a profit through ransomware and other cyberextortion techniques. In response to this growing threat, manufacturing executives must make security a core corporate priority and push forward the implementation of preventative measures in their organizations.”

The report found that many manufacturers – especially those with revenues under $500 million – neglect key cybersecurity preparedness efforts. Overall, less than 40% of these smaller companies perform cyber audits (38%), penetration testing (33%), security assessments of vendors (32%) and phishing exercises on employees (31%).

Other findings:  

  • Though a majority of respondents have automated in some way production processes and machining, assembly and packaging, only about a third said they have “extensively” automated these areas.
  • Manufacturers are bullish, but still preparing, for an economic downturn. Only 27% of the executives surveyed believe it is “extremely” or “very likely” that the U.S. economy will enter a recession in the next 12 months. However, that number rises to 49% among companies with $500 million or more in annual revenues. Overall, 63% of respondents are preparing for the possibility of a recession.
  • Manufacturers are mixed on how the expansion of e-commerce has benefited or hurt their operations. Nearly half (49%) of the companies surveyed said they use e-commerce to sell their products. Of these, 39% said sales from e-commerce have exceeded their expectations, while 37% said sales have been disappointing.
  • When asked to identify obstacles to innovation, 53% of respondents cited “finding and retaining the talent needed” as “extremely” or “very” challenging.

Click here to download Sikich’s 2019 Manufacturing and Distribution Report.

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