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3 Ways Energy & Utility Companies Can Increase IT Security Now
You’ve seen the panic in the news; you’ve experienced the fuel shortages at the gas station; you’ve lit your darkened home with flashlights and candles when the power fails…sometimes for days. The health and security of your energy company’s IT systems and network infrastructure do not just impact your bottom line, but the lives of millions—or billions—of people.
After the recent ransomware attack against the largest U.S. fuel pipeline—now considered the biggest known cyberattack on U.S. energy infrastructure—President Biden issued an executive order to improve the nation’s cybersecurity. Oil & gas companies, utilities, and alternative energy producers and suppliers must take their IT seriously as a matter of national security.
Here are ways businesses in the energy sector can improve their IT for healthier, more secure IT infrastructure.
1. Increase uptime to increase security
The energy sector’s infrastructure is aging. Outdated or overworked equipment are more likely to fail more often, leading to egregious system downtime. The 56% of utility respondents in a Siemens and Ponemon Institute survey had at least one system shutdown or operational data loss per year. For a resource that people and businesses utilize daily, even one system shutdown is too many. According to McKinsey & Company, hardware and software failures account for 45% and 39%, respectively, of widespread, unplanned downtime incidents in the energy industry. As utilities expand power grids and oil & gas companies lay more pipelines, the need for reliable technology intensifies, not only for operational efficiency but security. In IBM’s 2020 study of the energy market, system glitches caused 23% of data breaches. The U.S. energy sector will spend $14 billion a year through 2023 to modernize and build a smarter infrastructure. Improving power production and delivery reliability—and decreasing system downtime—drives 44% of power companies to digital transformation, ultimately leading to more robust security from cyberattacks.
2. Increase monitoring to increase security
Utilities cannot rely on infrastructure integrity alone. Consistent monitoring and proactive maintenance are required to ensure the health and security of IT systems. In 2020, malicious attacks caused 55% of data breaches in the energy sector, reports IBM, and human error caused 22%. With a 13% increase in security breaches last year over 2019, utilities and oil & gas companies need to be on the defense more than ever. Unfortunately, only 55% of utilities respondents in Utility Dive’s 2020 survey are using systematic and prompt patching for existing systems. This statistic is concerning and could indicate a lack of automation for managing large quantities of assets. Maintaining top network performance in an energy business is critical to prevent security breaches, outages, and the continual availability of heat, electricity, and fuel to protect people’s lives and livelihoods.
3. Increase cost savings to increase security
According to the Department of Energy, power outages cost the U.S. $150 billion annually. Not only that, but one hour of downtime costs electric utilities $300,000. The average power outage in the U.S. lasts 5.8 hours. Multiply that by the cost of one hour and it totals $1.7 million in downtime costs. Utilities and oil & gas companies can modernize their infrastructure to decrease unplanned downtime. In doing so, digitization can also reduce operating expenses by up to 25% and a 20-40% increase in safety, reliability, customer satisfaction, and regulatory compliance. Digitized utilities cut maintenance costs by $50 million in 18 months, according to McKinsey & Company. And don’t forget that modernization and proactive maintenance decrease data breaches, which on average cost an energy business $6.39 million. Plus, any cost savings can be put back into your business to further improve infrastructure and security, keeping pace with compliance standards and presidential executive orders.
Utilities and oil & gas companies are growing so quickly that they must outsource their operations. It is likely an energy business does not have the time or skills to also handle modernization and maintenance of IT systems and hiring enough experts can be costly. Outsourcing IT to a managed service provider (MSP), who has the resources and expertise to manage and maintain an energy company’s IT systems for a predictable monthly fee, is an effective strategy.
Here are a few ways managed IT can benefit the energy sector:
Everything managed IT does circles back to the security and integrity of your IT systems, protecting your business, your customers, and your country.
At NexusTek, we take the health of your energy company’s infrastructure seriously. As an award-winning MSP with hundreds of IT consultants and best-in-class technology partners, NexusTek has the expertise and resources to ensure utilities and oil & gas companies maintain optimal technology performance. Our multiple network operations centers (NOCs) monitor and maintain your IT systems, installing the latest software updates and patches and offering 24/7/365 IT support for a fixed monthly fee. Our managed IT, cybersecurity, and IT consulting packages can be tailored to fit the needs of your energy company so that your experience is truly “electrifying”, all for a fixed monthly fee. The bad puns come free.