Target exec's departure puts spotlight on CIOs

Mar 5 2014, 11:48pm CST | by

NEW YORK (AP) — The departure of Target's chief information officer in the wake of the company's massive pre-Christmas data breach highlights the increased pressure facing executives who are charged with protecting corporate computer systems from hackers whose attacks are on the rise and becoming more sophisticated.

CIOs from companies in all walks of business —from retail to banking and drug discovery— are using the Target breach as a rallying point to call attention to their struggle and garner additional funds and manpower to fight digital threats.

Cyberattacks were on the rise long before Target's news that hackers had stolen 40 million debit and credit card numbers, along with the personal information belonging to as many as 70,000 people. A 2013 Hewlett-Packard Co.-sponsored study by the Ponemon Institute found that the average annual cost of cybercrime incurred by a benchmark sample of U.S. organizations was $11.6 million per organization, a 26 percent increase from the previous year.

For a host of companies, the Target breach was a pivotal event that permanently altered the way they approach data security. Many CIOs say they're receiving more support, but they say the trade-off is that they're facing increased scrutiny from their CEOs and other executives. If their fortress walls fall to hackers, their jobs will be on the line.

Ken Grady, CIO of life sciences company New England BioLabs Inc., says the increased attention to data security has been a good thing for him. It has prompted much needed support from colleagues. But that backing comes at a cost.

"If I have a breach in spite of all that, I need to be able to say that we did everything we could to prevent it," Grady says. "If I can't do that, then it would have a negative effect on me."

Analysts believe the Target data theft couldn't have had a positive effect on Beth Jacob, who had served as the company's CIO since 2008. Target said Wednesday that Jacob's resignation was her decision, but analysts say Jacob took the fall amid a slew of bad publicity for the Minneapolis-based company.

Target is in the midst of overhauling its information and compliance division and plans to look outside the company for a chief information security officer and a chief compliance officer, two newly created positions. Before the overhaul, information security functions were split among a variety of executives.

Tim Scannell, director of strategic content for the CIO Executive Council, a professional trade group, says companies have come to realize the importance of security. The result: boosted budgets and staffing increases. According to a recent CIO Executive Council survey, computer security professionals say they expect an average increase of 8 percent in their budgets this year.

"I think CIOs are getting more respect," Scannell says. "They're winning a seat at the table. But along with that, we have a heightened security risk, so they're under pressure to do something about it."

Scannell notes that even if a company isn't a retailer that deals directly with consumers, most now have some kind of e-commerce operations, which makes them a potential target for an attack.

The new era of cybersecurity was a hot topic at the recent RSA tech security conference in San Francisco. Daniel Ives, an analyst for FBR Capital Markets, says many of the data security professionals in attendance said they are increasing security spending in light of recent high-profile data breaches. He predicts that data security spending could rise as much as 15 percent this year.

Ives says that while retailers, financial and health care companies have the most to lose in the event of a cyberattack, any company that so much as uses mobile phones or puts customer data on their networks is also at risk.

"Getting on the cover of The Wall Street Journal in some cyberattack is a CIO's worst nightmare," he says. "They're the bodyguard and the linchpins of the companies they work for more today than ever before, because of the amount of data that's out there."

And companies aren't the only entities at risk for data breaches. Universities also handle vast amounts of personal information.

Gerry McCartney, Purdue University's systems CIO, says public universities also face the challenge of remaining transparent while protecting everything from student social security numbers to the research of its professors.

"If you lock data up like Fort Knox people can't use it," he says. "It's like locking your car up in the garage so you can't get into an accident, but then what's the point of having a car? You want your people to have access to data."

Ed Brandman, CIO of the private equity firm KKR & Co., says his company focuses on advising its portfolio companies, which range from payments processor First Data Corp. to retailer Academy Sports, on the best practices for protecting data.

He says a major task CIOs face is balancing data security spending with the perceived potential for an attack, noting that CIOs also have to decide how much to spend on other technology related investments such as computers and mobile devices.

"And no matter how much you're spending, you never have 100 percent confidence that you're safe," Brandman says. "It's an always evolving state."

Mark Popolano, CIO of ProSight Specialty Insurance, agrees. His company's commercial insurance business is all about weighing risks against costs.

"If you want to spend an infinite amount of money on security you can," he says. "But the government does and they're not 100 percent foolproof."

It's for that reason that Grady says New England BioLabs paid particular attention to how Target and Neiman Marcus, which also recently reported a data breach, handled their situations in terms of costs and transparency.

He says the fact that the breaches happened to those two companies shows that they can happen to anyone. The important thing is to know how to respond if the worst does occur.

"What we don't want is to be unprepared and not have a plan, heaven forbid we have such an issue," Grady says.

___

Bree Fowler can be reached at http://twitter.com/APBreeFowler

Source: AP Business

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/31" rel="author">Associated Press</a>
The Associated Press (AP) is one of the largest and most trusted sources of independent newsgathering, supplying a steady stream of news to its members, international subscribers and commercial customers.

 

blog comments powered by Disqus

Latest stories

Mummy wearing jewellery unearthed in Egypt
London, Nov 23 (IANS) Spanish archaeologists have discovered about 4,000 years old female mummy wearing rare jewellery in Egypt.
 
 
Exercise and fasting could boost brain's functions
Washington, Nov 23 (IANS) Exercise along with occasional fasting is good for boosting the brain's neurons, shows a new research.
 
 
One infant dies in Pakistan hospital
Islamabad, Nov 23 (IANS) One more infant died due to lack of oxygen in an incubator and negligence of the hospital administration in Pakistan, bringing the number of such deaths to 19 in the past five days.
 
 
American whiskey faces challenge in whisky-gulping India
Washington, Nov 23 (IANS) For the most part Indians love things American, but when it comes to their tipple, the world's largest whisky drinkers usually go for Scotch or their very own home-made brands.
 
 
 

Latest from the Network

Pune FC seal semifinal berth in King's Cup
Thimphu, Nov 23 (IANS) Pune FC thrashed Assam State Electricity Board FC 5-0 in a third round Group-B encounter to seal their place in the semi-finals of the 2014 King's Cup at the Changlimithang Stadium here Sunday....
Read more on Sport Balla
 
Australia the team to beat at World Cup: Vaughan
London, Nov 23 (IANS) Former England captain Michael Vaughan Sunday said that having hit upon a rich vein of form against South Africa, Australia have emerged as the front-runners and will be the team to beat at the...
Read more on Sport Balla
 
Taylor Swift to receive Dick Clark Award
Los Angeles, Nov 23 (IANS) Singer Taylor Swift has been named as the first recipient of Dick Clark Award For excellence at 2014 American Music Awards (AMAs). The 24-year-old, who is enjoying a great year with her...
Read more on Celebrity Balla
 
Australia displace India as top ODI team
Dubai, Nov 23 (IANS) Four-time World Champion Australia Sunday returned to the top of the One-Day International (ODI) Team Rankings, displacing India, after defeating South Africa 4-1 in a five-match series, as per the...
Read more on Sport Balla
 
Iraqi court sentences Sunni politician to death
Baghdad, Nov 23 (IANS) An Iraqi court Sunday sentenced a former Sunni lawmaker to death on a criminal charge, an official said. "The Central Criminal Court issued today a verdict of death penalty for the former...
Read more on Politics Balla
 
Amzon Black Friday 2014: $3.99 Blu-ray Movies
Black Friday 2014 Sales events are underway since Friday with the Amazon Black Friday 2014 Deals Week and the Walmart Black Friday Pre Sale. Walmart matched several advertised Black Friday 2014 deals of competitors on...
Read more on Black Friday Countdown
 
Best Buy Black Friday 2014 sale launched with $3.99 Blu-ray Movie
Like Walmart and Amazon, Best Buy kicks off their Black Friday 2014 sale early. You can already buy Best Buy Black Friday deals advertised in the Best Buy Black Friday 2014 ad today online at bestbuy.com. There is no...
Read more on Movie Balla
 
Messi delighted with new La Liga scoring record
Madrid, Nov 23 (IANS) Lionel Messi has made footballing history, scoring a hat-trick against Sevilla which made him the highest scorer in the history of the Spanish La Liga. Messi's 252nd, 253rd and 254th goals...
Read more on Sport Balla
 
Tatum, Carolin to co-direct 'Leonard Peacock'
Los Angeles, Nov 23 (IANS) Actor Channing Tatum and filmmaker Reid Carolin have been roped in by the Weinstein Company to co-direct and produce the film "Leonard Peacock", an adaptation of Matthew Quick's YA book "...
Read more on Celebrity Balla
 
Burdwan blast mastermind's wife held in Dhaka
Dhaka, Nov 23 (IANS) The women's wing chief of the terrorist group Jamaat-ul-Mujahideen Bangladesh (JMB) who confessed to training at least 25 women in West Bengal has been arrested here, the media said Sunday. Fatema...
Read more on Politics Balla