Did you know that after a successful cybersecurity attack, manufacturers need to pay $2 million on average to restore their operational systems back to normal?
Attackers may often find manufacturing companies easier to breach due to outdated infrastructure and lack of OT visibility.
As cybersecurity threats evolve, so should cybersecurity risk management of manufacturing companies to stay resilient.
From identifying critical assets and quantifying potential losses to calculating ROI and considering non-financial factors, companies need a comprehensive understanding of cybersecurity investments.
In this article, we reveal our streamlined 10-step roadmap for conducting a targeted cost-benefit analysis for cybersecurity in the discrete manufacturing sector.
Plus, we share nine benefits that demonstrate the immense value of cybersecurity to your senior management.
Your 10-Step Guide to Cost-Benefit Analysis for Cybersecurity in Discrete Manufacturing
1. Identify Critical Assets and Processes
This first step – identifying critical assets, machinery, and systems within your discrete manufacturing setup – is crucial.
You’ll want to assess potential cybersecurity risks, such as production data breaches, intellectual property theft, production disruptions, and regulatory non-compliance.
An easy way to do this is to map out your current manufacturing processes to understand how information flows, so you can spot any potential vulnerabilities.
2. Assess Potential Risks and Threats
Next, you can research and analyze the current cybersecurity threat landscape – or find a managed service that can do this for you – and look into industry-specific threats to discrete manufacturing.
Then, by performing threat modeling, you can identify potential cyber threats and vulnerabilities from within your manufacturing processes.
This means you’re looking for threats both inside and outside your organization.
3. Quantify Potential Losses
One of the simplest steps when conducting a cost-benefit analysis is to look into your potential financial losses if you choose not to invest in cybersecurity.
This could include the damaging impact of cybersecurity incidents, such as downtime costs, loss of intellectual property, regulatory fines, and reputational damage.
The exact monetary values for each of these examples might be difficult to estimate on your own.
So it’s best to work with relevant departments to assign values – especially for things like intellectual property – and estimate potential losses if your equipment or systems are compromised.
4. Evaluate Security Measures
As well as the cost and effectiveness of your current cybersecurity measures, software, hardware, training, and maintenance, make sure you get to grips with how you can reduce risk in other areas of your business.
When considering discrete manufacturing specifically, you’ll want to secure your Industrial Control Systems (ICS) by implementing robust access controls, regular updates, and network segmentation to isolate critical systems from external threats.
Cybersecurity safeguards against vulnerabilities that stem from integrating IT and OT with firewalls, intrusion detection systems, and regular security assessments. You can also secure remote access with strong authentication, VPNs, and regular software updates.
But security isn’t just digital. Protecting physical access to your manufacturing facilities and equipment is also important, so look into physical security measures, including access controls, surveillance, and employee training on security protocols for on-site locations.
5. Calculate Implementation Costs
So, you should already have calculated your potential financial losses if you don’t implement cybersecurity for your discrete manufacturing business.
Now, it’s time to look at the implementation costs, such as:
- New cybersecurity technologies, like intrusion detection systems, encryption tools, and secure communication protocols
- Training and awareness, such as employee training programs to enhance cybersecurity awareness and skills
- Integrating cybersecurity measures into existing manufacturing processes and systems
6. Assess Long-Term Operational Costs
Cybersecurity is not a one-off measure – it’s got to be constantly evolving and updating to address evolving threats.
As you focus your cybersecurity efforts toward the long term, make sure you look into ongoing maintenance and update costs.
7. Calculate Return on Investment (ROI)
Now for the most important part of your cost-benefit analysis – your return on investment, or what you stand to gain from introducing or improving cybersecurity for your discrete manufacturing business.
The first step is to quantify the benefits of cybersecurity measures – risk reduction, avoided losses, improved operational efficiency, and enhanced brand reputation are all examples you can include.
Then, you can calculate the ROI by comparing those expected benefits with the costs of implementing your chosen cybersecurity measures.
(The ROI is the figure that senior management will be most interested in, so make sure you check and double-check before presenting!)
8. Consider Non-Financial Factors
When it comes to cybersecurity, money isn’t everything. In the discrete manufacturing industry, staying informed about sector-specific regulations, especially those concerning data protection and critical infrastructure, is crucial.
So you also want to evaluate the impact of cybersecurity measures on regulatory compliance, and especially look into potential fines associated with non-compliance.
In discrete manufacturing, when sensitive customer and business data is involved, it’s increasingly vital to make sure your cybersecurity measures will be robust. This includes data encryption, secure storage practices, and compliance with data protection regulations to safeguard sensitive information.
Additionally, you’re likely to find that customers are more likely to trust your services with a comprehensive cybersecurity strategy to keep their personal data safe.
And there’s nothing wrong with a boost to your brand reputation.
9. Present Findings to Senior Management
The moment’s arrived – proposing your plan to the higher-ups!
Make sure you have a detailed report about your cost-benefit analysis findings, including financial estimates, risk assessments, and those all-important ROI calculations.
It will also be useful to provide clear recommendations for specific cybersecurity measures based on the identified risks and potential benefits.
Don’t forget to factor in the long-term benefits of cybersecurity, such as improved customer trust, compliance with industry regulations, and the ability to adapt to evolving cybersecurity threats.
10. Iterate and Update
As we said earlier, cybersecurity is an ongoing process. So commit to regular reviews and updates to your cybersecurity strategy to stay one step ahead of the hackers.
Stay informed about emerging cybersecurity threats and technologies, especially within the discrete manufacturing industry, so that you can make rapid changes when you need to.
Demonstrating the Value of Cybersecurity in Discrete Manufacturing
So, you’ve completed all the steps above. Right about now, you might be wondering what this is all for. While we’ve already included some of the many benefits of cybersecurity, here are some further ways that cybersecurity brings additional value to your discrete manufacturing business:
- Risk Mitigation and Operational Continuity
Cybersecurity measures mitigate the risk of cyberattacks, helping to keep operations in the manufacturing process uninterrupted. This reduction in the likelihood and impact of disruptions means maximized uptime, meeting delivery schedules, and keeping customer satisfaction high.
- Protection of Intellectual Property
Robust cybersecurity provides a critical shield against unauthorized access to, or theft of, valuable intellectual property and trade secrets. By preserving intellectual property, you gain not only a competitive edge but also a safeguard for the company’s market position. This is especially important in the context of product lifecycle security, with intellectual property to protect across design, manufacturing, and distribution phases.
- Regulatory Compliance and Brand Reputation
By meeting cybersecurity standards, you ensure compliance with industry regulations and enhance your company’s reputation for security and reliability. This means you can avoid expensive fines and build trust with your customers, partners, and regulators, contributing to a positive brand image.
- Supply Chain Resilience
Cybersecurity also means you enhance the resilience of the supply chain through secure communication and data exchange with suppliers and partners. In turn, this secure supply chain reduces the risk of disruptions, guarantees timely access to materials, and fortifies relationships with key partners.
- Cost Savings in the Long Run
Initial cybersecurity investments might seem expensive. But the cost of dealing with a major cybersecurity incident like a data breach or even a full system compromise can be much higher. By being proactive about your cybersecurity measures, you can save much more in the long term by preventing and minimizing the financial impact of potential incidents.
- Enhanced Customer Trust and Market Competitiveness
A commitment to cybersecurity builds trust among current customers who are increasingly concerned about the products they purchase. And a reputation for strong cybersecurity can be a huge competitive advantage, attracting new customers who prioritize security and contributing to the company’s overall market competitiveness.
- Incident Response and Recovery
With a robust incident response plan in place, you can react to incidents swiftly and effectively so your operations avoid being heavily impacted, reducing downtime, limiting financial losses, and showing the organization's ability to handle challenges.
- Attraction and Retention of Talent
Demonstrating a commitment to cybersecurity enhances the company’s employer brand and creates a positive work environment. A strong cybersecurity framework can attract and retain top talent, who may feel reassured by the company’s additional security practices.
- Future-Proofing Against Evolving Threats
Being prepared for future cybersecurity challenges ensures your company remains resilient and adaptable in the face of evolving cyber risks. By investing in cybersecurity, you bring a forward-thinking approach to address emerging threats and technological changes.
By showcasing the benefits – ranging from risk reduction and operational continuity to intellectual property protection and regulatory compliance – you can form a persuasive argument for senior management to invest in cybersecurity for your discrete manufacturing business.
This holistic view not only emphasizes immediate financial gains but also underscores the strategic value of a robust cybersecurity infrastructure.
Addressing specific industry considerations enhances overall cybersecurity, and continuous updates fortify defenses against emerging threats, ensuring sustained resilience in the ever-evolving landscape of discrete manufacturing.
Ready to find out how your discrete manufacturing business can benefit from SCADAfence cybersecurity? Contact our team now to learn more.