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

China pledges $81 mn financial assistance for Afghanistan
Beijing, Oct 31 (IANS) China Friday pledged to provide non-reimbursable assistance of 500 million yuan (about 81 million dollars) to Afghanistan this year at an international meeting on Afghanistan held here.
 
 
EU seeks talks with Russia over goods duties: WTO
Geneva, Oct 31 (IANS) The European Union (EU) has sought a consultation with Russia over the tariffs the latter imposed on certain agricultural and manufactured goods, the World Trade Organisation (WTO) said Friday.
 
 
Virgin Galactic's spaceship crashes during test flight
Los Angeles, Nov 1 (IANS) A passenger rocket plane developed by Virgin Galactic's crashed Friday after suffering an "in-flight anomaly" during a powered test flight over the US state of California, the company said.
 
 
Bhopal fugitive Warren Anderson is dead (Roundup, Changing dateline)
Washington, Oct 31 (IANS) Warren Anderson, the former CEO of Union Carbide Corp, has died at 92 after living for 30 years under the shadow of the 1984 Bhopal gas tragedy that killed thousands.
 
 
 

Latest from the Network

Arnold Schwarzenegger 'knew' he'd star in another Terminator movie
Arnold Schwarzenegger ''always knew'' he'd star in another 'Terminator' movie. The 67-year-old actor - the former governor of California - insists he wasn't surprised when he got a call from producers to appear in the...
Read more on Movie Balla
 
Anne Hathaway would 'love' a sequel to The Devil Wears Prada
Anne Hathaway would ''love'' to appear in a sequel to 'The Devil Wears Prada'. The Oscar-winning actress starred in the popular 2006 comedy-drama, which also featured Meryl Streep and Emily Blunt, and has revealed she...
Read more on Movie Balla
 
Lily Aldridge wearing mother's Playboy costume for Halloween
Lily Aldridge will wear her mother's old Playboy costume for Halloween. The 28-year-old model - who is married to Kings of Leon singer Caleb Followill - found her mum Laura Lyons' raunchy Playboy Bunny flight attendant...
Read more on Celebrity Balla
 
Rochelle Humes' daughter loves Marvin doll
Rochelle Humes is embarrassed by her daughter's obsession with a doll of her husband, Marvin Humes. The 25-year-old singer has admitted she found it ''cringey'' when she was recently photographed holding a doll of her...
Read more on Celebrity Balla
 
Keira Knightley annoyed Chloe Moretz didn't ask her advice
Keira Knightley was annoyed Chloe Grace Moretz didn't want her advice. The 29-year-old actress - who appears alongside the 17-year-old star in her latest movie 'Say When' - was disappointed that the young actress didn'...
Read more on Celebrity Balla
 
Daniel Radcliffe loses everything
Daniel Radcliffe loses everything. The 'Horns' star admits he constantly has to replace his mobile phone and often puts things away and can't ever find them again. The 25-year-old actor said: ''I lose things a lot. At...
Read more on Celebrity Balla
 
Apple Outsmarts Samsung in Terms of Revenue Generation
Samsung can sell more products, but it doesn’t mean that it will earn more profit, as Apple overtakes the Korean giant with respect to the earnings.According to the Cult of Mac, Samsung earned a profit of $3.8 billion...
Read more on Apple Balla
 
Apple Declares Not to Remove PCalc iOS Calculator Widget
The PCalc iOs calculator widget is free from the risk of being removed, as Apple decides not to drop it from the App Store.According to Tech Crunch, the officials of Apple have confirmed about the move, stating that it...
Read more on Apple Balla
 
Seth Rogen to Act as Steve Wozniak in the Steve Jobs’ Movie
Seth Rogen has got an important role in the biopic of the late Apple co-founder Steve Jobs, as he has been selected to play as Steve Wozniak.According to the Variety, Rogen will be advised directly by Steve Wozniak, the...
Read more on Apple Balla
 
Ponzy schemer cheats residents of $22 mn, gets 15-year jail
Washington, Oct 31 (IANS) If you have been one of those approached by some 'known' person for investing in something with an assurance of 'easy money', you may benefit reading about this Ponzi schemer jailed in the US...
Read more on Politics Balla