Are OT Security Investments Worth It?
Spoiler Alert: Yes, investing in OT security is very much “worth it”. It helps prevent financial losses, operational disruptions, and compliance penalties that far exceed initial costs. The average ROI can reach up to 400%, ensuring both protection and operational continuity.
Waterfall team
The Rising Need for OT Security in Industrial Operations
The growing digitization of industrial operations makes safeguarding operational technology (OT) increasingly vital. OT encompasses the hardware and software that detects or controls physical processes, distinct from IT, which focuses on data. One key difference between OT and IT security though, is that a breach of an OT system can have real-world, physically harmful consequences—and those consequences can arise quickly. For example, if a cyberattack gains access to a manufacturer’s OT systems, it could directly (or indirectly) cause an unplanned shutdown of production, damage machinery, or even harm personnel working near the production line.
FACT: 2023 saw a 19% increase in cyberattacks causing physical damage, highlighting the growing threat to OT environments.
One of the major challenges in improving OT security are outdated legacy systems that lack modern security features and complex network architectures that provide many potential entry points for attackers. Another often underestimated factor is the human element.
In most cases, employees are the first line of defense in cybersecurity efforts. However, inadequate training leaves organizations vulnerable to attacks, as employees are not always equipped to handle the demands of modern cybersecurity operations.
As cyberattacks grow more advanced, all industrial sectors face heightened vulnerabilities. Protecting critical assets is essential, and compliance with regulations alone is no longer sufficient. Comprehensive investment in securing the operational technology that underpins business continuity has become a necessity and is no longer a “nice to have” option.
Neglecting OT security poses significant risks to safety, connectivity, and financial stability. In today’s modern threat landscape, industrial operators understand the need to prioritize security across all processes to safeguard their operations and ensure resilience in the face of growing cyber threats.
Breaking Down the High Costs of OT Security Solutions
The financial burden of securing Operational Technology (OT) is particularly challenging for small and medium enterprises. The expenses include initial investments in hardware and software, as well as ongoing maintenance costs.
“The 2022 Clorox cyberattack inflicted $49 million in damages, underscoring the financial fallout of neglected OT security.”
The secure operation of OT systems is invaluable, as vulnerabilities can threaten worker safety, operational continuity, and system integrity. Research shows that cyberattacks targeting OT environments are on the rise, with a 19% increase in attacks causing physical damage reported in 2023. High-profile incidents, such as the $27 million breach at Johnson Controls, the $49 million damages at Clorox, and the $450 million costs incurred by MKS Instruments, illustrate the financial risks of inadequate OT security.
Investing in OT security may seem costly upfront, but the risks posed by unprotected legacy systems far outweigh these expenses. Legacy systems, with their outdated protocols, expose both OT and IT networks to attacks due to their interdependent nature. Solutions like advanced anomaly detection, real-time monitoring, and network segmentation are designed to mitigate these risks effectively. By using unidirectional gateways, legacy systems can continue to be used safely and securely, without the need for costly upgrades.
Despite the costs, OT security investments in tools like unidirectional security gateways yield significant returns. Businesses report an average ROI of 400%, primarily through incident prevention. This becomes increasingly critical as cybercriminals evolve their tactics, targeting IT and OT networks to disrupt operations. Robust and proactive security measures are essential to protect organizations from the financial and reputational damage caused by cyberattacks.
Calculating ROI: How OT Security Pays Off
Evaluating the return on investment (ROI) for OT security initiatives involves understanding both tangible and intangible benefits. While traditional business investments aim for revenue growth, security investments focus on risk reduction, helping organizations avoid or mitigate potential losses.
PROTIP: Use the Return on Security Investment (ROSI) formula to compare the cost of security measures versus the reduction in potential losses.
A great method for calculating costs and ROI on OT security investments is to use the ROSI formula, which works like this:
ROSI = (Reduction in potential losses – Cost of safety measure) / Cost of safety measure
For example, a $100,000 security solution that reduces potential losses of $500,000 to $250,000 yields a 150% return. Historical data, such as ransomware incidents costing between $250,000 and $850,000, further supports the financial justification of these investments.
Organizations can refine their calculations by incorporating metrics such as:
- Single Loss Expectancy (SLE): The financial impact of a single incident.
- Annual Rate of Occurrence (ARO): The frequency of incidents based on historical data.
- Annual Loss Expectancy (ALE): The annualized cost of potential incidents, derived from SLE and ARO.
- Mitigation Ratio: The percentage of incidents prevented by a security measure.
For instance, if a business faces ten annual attacks costing $20,000 each, a $50,000 investment that prevents 90% of these breaches demonstrate clear financial benefits. When using deterministic solutions such as Waterfall’s unidirectional security gateway, the benefit becomes even clearer. See here for more details.
Beyond financial savings, OT security investments safeguard business continuity, customer trust, and reputation. These benefits are critical for companies operating in competitive markets where even minor disruptions can have significant consequences.
Some final words...
Industrial operations today face the dual challenge of addressing increasingly sophisticated cyber threats while managing constrained budgets. Securing OT systems is essential to maintaining a “production-first” approach that underpins modern industrial operations.
OUCH! An unprotected legacy manufacturing machine once allowed malware to move laterally, disrupting operations across an entire company.
Prioritizing resources starts with comprehensive risk assessments. Tools that calculate asset-specific risk scores can help identify critical areas requiring investment. Modernizing infrastructure, such as replacing 10- to 20-year-old equipment, also enhances security by reducing vulnerabilities, but keeping that machine in a way that maintains compliance and enhances security is far more cost effective.
Collaboration across OT, IT, and security teams is crucial for cohesive strategies. Cross-functional efforts ensure that cybersecurity measures align with business objectives, resulting in shared ownership of protocols. While moving to proactive solutions like Zero Trust Network Access (ZTNA) enhances security by adhering to the principle of “never trust, always verify.”, it still leaves gaps within OT security. However, a more cohesive approach such as Cyber-informed Engineering, addresses the threats head-on, with a more elaborate solution that saves costs over time by getting OT and IT (and other stakeholders) working together to ensure security from the start, and not as an afterthought.
Investing in OT security, while expensive, is far less costly than the aftermath of a cyberattack. By adopting a risk-based strategy, securing legacy infrastructure, and fostering collaboration, industrial operators can enhance their resilience to cyber threats while maintaining operational efficiency.
Want to learn how to engineer OT Security into OT systems? Get your complimentary copy of Andrew Ginter’s new book: Engineering-grade OT Security: A Manager’s Guide
FAQs
What is OT security and why is it important for industrial operators?
Operational technology (OT) refers to the systems that control physical processes in industrial operations. Securing OT is essential to prevent breaches that could halt production, damage equipment, or harm workers. As OT systems become prime targets for cybercriminals, protecting them is increasingly critical.
What are some key challenges in implementing OT security?
Common challenges include outdated systems lacking modern security features, complex network architectures with numerous entry points, and human error. Addressing these issues requires securing legacy systems, redesigning network structures, and ensuring employees are adequately trained.
How do cyberattacks affect OT environments in industrial operations?
Cyberattacks on OT systems can cause production downtime, financial losses, equipment damage, and even physical harm to workers.
What are the costs associated with OT security investments?
OT security investments include upfront costs for hardware and software, ongoing maintenance, and compliance expenses. However, these costs are outweighed by the potential financial and operational losses of a cyberattack.
Is OT security investment worth the financial burden?
Yes, the ROI of OT security demonstrates its value. Preventing downtime and damage from cyberattacks saves organizations significant costs, making security investments highly worthwhile.
How can organizations calculate the ROI of OT security measures?
The ROSI formula calculates the financial benefits of security measures by comparing potential losses avoided to the cost of the measures.
What proactive measures can industrial operations take to prioritize OT security?
Industrial operations should conduct risk assessments, secure legacy infrastructure, and adopt strategies like network segmentation between OT and IT. These measures strengthen security and reduce vulnerabilities.
Why is collaboration important for effective OT security?
Collaboration between OT, IT, and security teams ensures aligned strategies and shared ownership of cybersecurity protocols. Approaches such as Cyber-informed Engineering improves communication, fosters cohesive planning, and enhances overall security outcomes.
Want to learn how to engineer OT Security into OT systems? Get your complimentary copy of Andrew Ginter’s new book: Engineering-grade OT Security: A Manager’s Guide
Waterfall team
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