Cybersecurity

Study: Cyberattack can cost large manufacturing companies in Asia-Pacific $10.7 million

The study “Understanding the Cybersecurity Threat Landscape in Asia-Pacific: Securing the Modern Enterprise in a Digital World” found out that nearly 3 in 5 (59%) organizations have delayed the progress of digital transformation projects due to the fear of cyberattacks, without realizing that they are opening up their networks for more threats.

Forst and Sullivan did the study that Microsoft Asia commissioned to provide business and IT decision-makers in the manufacturing sector with insights on the economic cost of cyberattacks and to help to identify any gaps in their cybersecurity strategies. The initial study surveyed a total of 1,300 business and IT decision makers ranging from mid-sized organizations (250 to 499 employees) to large-sized organizations ( more than 500 employees), of which 18% belong to the manufacturing industry.

The most significant findings, however, is large manufacturing companies in the Asia-Pacific region incur an economic loss of $10.7 million due to cyberattacks. The indirect cost of a data breach to mid-sized companies is found to reach $8.1 million. These figures are just for large manufacturing companies. Mid-sized companies post an average economic loss of $38,000.

“The frequency and severity of cyberattacks targeting manufacturing organizations have increased significantly in recent years, underscoring the need to protect the ever-growing volume of data generated by and made available to manufacturing organizations,” said Kenny Yeo, Industry Principal, Cyber Security, Frost & Sullivan. “By integrating security into every digital process and physical devices, manufacturing organizations can not only mitigate the loss of intellectual property (IP) and customer data but also minimize downtime as well as remediation cost resulting from cyberattacks.”

The study also uncovered that 51% or just about half of the manufacturing organizations’ supply chain and consumer in the region have experienced a data breach or were clueless if they ever had one.

Data breach is almost always 100% sure to happen to anyone and it is with this fact that 3 in 5 or 59% of companies have deferred digital transformation efforts. The misconception further exposes them to cyberattacks because digital transformation efforts these days include security transformation as well.

Direct financial losses

In calculating the cost of cyberattacks, Frost & Sullivan created an economic loss model based on the insights shared by the respondents. This model factors in two kinds of losses which could result from a cybersecurity breach. Direct means financial losses associated with a cybersecurity incident including loss of productivity, fines, remediation cost, among others, while indirect means the opportunity cost to the organization such as customer churn due to reputational damage.

“Technology advances and innovations in intelligent manufacturing are delivering game-changing breakthroughs for leading businesses in every sector,” said Scott Hunter, Regional Business Lead, Manufacturing, Microsoft Asia. “As manufacturing organizations focus on increasing data-driven products and services to differentiate themselves in the global economy, building and maintaining trust within their ecosystem of partners and customers becomes an even bigger priority.”

“Cyber attackers are constantly looking for opportunities, so the more businesses know about their techniques and tradecraft, the better prepared they will be to build defenses and respond quickly. Building organizational resilience and reducing risk by adopting a security approach that includes prevention, detection and response can make a huge difference in the overall cybersecurity health of a manufacturing organization,” he added.

Image from Pixabay

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