Cybersecurity Risks In Supply Chain And Procurement
Cybersecurity Risks Are Now Creeping Into the HVAC Supply Chain. Here's What You Can Do to Mitigate Them
4 MIN. READ
Anyone paying attention to the news today knows that cyberattacks are everywhere. We hear about them in industries as wide-ranging as oil pipelines and government agencies to healthcare and private businesses. Today, they are also a significant risk for any business that has supply chain and procurement processes that involve transactions online — which is basically every business.
Between suppliers, customers and third parties, sensitive information is stored in many places. And unfortunately, you don’t always have control over those links in the chain. Thus, it’s important to understand your risks and take the appropriate steps to mitigate your exposure as much as possible in your HVAC supply chain.
What supply chain and procurement information is at risk
Many people only think about cybersecurity as something that impacts software companies. However, the reality is that with an increasingly connected world, company data in every industry is at risk to cybercriminals.
Like other companies, HVAC businesses today have a complex supply chain and procurement process that involve multiple transactions conducted online. These transactions require sharing a lot of important information. And it’s the type of data that hackers would like to get ahold of, such as:
- Contact information for your company and your customers/suppliers.
- Negotiations and contract information.
- Intellectual property shared among HVAC businesses and suppliers.
- Credit card, bank and other financial information.
This data could be valuable to hackers, who commonly target businesses with lax security protocols or protections in place. However, even if your company is not directly targeted, you could still be at risk of a breach if a hacker infiltrates another point in your supply chain.
In the 2020 hack of SolarWinds, an estimated 30% of the organizations affected didn’t use the company’s software. Instead, they were only peripherally connected through other suppliers or associates that did use the software.
A chain is only as strong as its weakest link.
Supply chain practices that increase your risks
No company can completely eliminate the cybersecurity threats out there. However, it’s important to understand what activities can put you at a higher risk of a breach.
Skipping risk assessments
The first step in reducing the chance of a cyberattack is to understand the risks that are out there and how your company or supply chain could be vulnerable. It requires an extensive risk assessment process that takes time. Unfortunately, not every company makes the time.
Nonetheless, it is crucial to perform one. You can do it on your own with your internal cybersecurity team (if you have one), or you can hire an outside consulting firm that specializes in evaluating and identifying security risks.
This is not a one-and-done process either. Cyber threats are continually evolving, so you should conduct regular risk assessments to stay on top of changes and have the right tools to stop a cyberattack.
Lack of ownership or stewardship of data
Another important part of proper data management is having clear controls in place over who manages your procurement and supply chain. Companies with a jumbled process and multiple people performing supply chain and procurement duties have a higher chance of someone making a mistake, leaving information vulnerable to attack.
Assigning a single owner to oversee the entire procurement process, or using data tools that can help your HVAC business see a birds-eye view of everyone who is involved, can help you minimize the risk of human errors in the process.
Disorganized contract management process
Contract management is another key area where your company could be at risk. As you negotiate increasingly complex supply chains with multiple vendors at every stage of procurement, you probably share and store a lot of important information about those contracts and negotiations online.
When you have so many contracts, it can be easy to lose track of all that information. With even a single weak link in your supply chain, you could be the victim of a malware or ransomware attack that is costly to fix.
No reporting or controls for procurement data
Visibility into your entire supply chain and procurement is essential to maintain control of your data. Supply chain software with built-in reporting tools can make it easier to see what is happening at all times and identify where you might be at risk.
Best practices to reduce supply chain and procurement risks
To reduce your chances of a cyberattack, it’s important to follow these industry best practices:
- Stay in compliance with industry standards for software security, such as PCI-DSS for companies that accept or store credit card information for transactions.
- Create detailed terms and conditions in your service-level agreements with all your vendors and subcontractors. Store this information in a place that is easy for your (authorized) employees to find. The Raiven contractor platform is an ideal place to store and manage all these contracts.
- Conduct regular risk assessments with guidance from cybersecurity experts, and take steps to fix any gaps that they identify.
- Limit your network access only to the people who require that access. Keep your procurement team small and manageable to further reduce risks of a breach from human error (the most common reason for breaches).
To learn more about tools like Raiven Marketplace and our contractor platform, which can help you better manage your HVAC supply chain and protect against cyber threats, reach out today and schedule a demo.