The recent cyberattack at CDK Global, a leading software provider for the automotive industry, was a jarring wake-up call for many business leaders. Analysts from Anderson Economic Group estimated dealer financial losses stemming from the outage at $944 million over the first three weeks following the attack due to business interruptions.
In today’s digital age, where technology serves as the backbone of operations, a single disruption can send shockwaves through your entire organization. CDK’s software, essential for managing tasks from scheduling to records, suffered a significant outage due to the attack, affecting all its customers. Many dealership employees, unaccustomed to working without the aid of technology, had to revert to manual processes, using pen and paper to fulfill vehicle orders for prospective buyers. The cyberattack also significantly impacted car buyers, causing delays in vehicle deliveries, registration processes, and reducing options for customers.
Imagine the frustration of your team and customers, alongside the severe damage to the businesses’ reputation and significant hit to the company’s revenue. This situation serves as a powerful reminder that while technology is a tool for efficiency, its reliability hinges on the infrastructure supporting it and the crisis protocols in place.
The question is not if a crisis will occur, but when. Every business must be prepared for the unexpected. Here are key lessons and strategies that can help your business navigate and survive a crisis like the CDK cyber incident.
A robust Business Continuity Plan is the cornerstone of any crisis management strategy. A BCP ensures that critical business functions continue during and after a disaster. The CDK outage revealed the necessity of having well-documented and comprehensive procedures that cover every aspect of operations, including the ability to complete transactions efficiently. A critical step in creating a BCP is performing a Business Impact Analysis (BIA). During a BIA, businesses must identify essential functions and their dependencies, determine potential risks, and establish protocols to maintain operations.
For CDK’s customers, the cyber incident emphasized the importance of having contingency plans that include reverting to manual processes. The ability to switch to pen-and-paper methods allowed dealerships to continue operating, albeit less efficiently. Regular updates and reviews of the BCP are essential to adapt to new threats and changes in the business environment. Regular updates and reviews of the BCP are essential to adapt to new threats and changes in the business environment.
When a crisis hits, time is of the essence. An Incident Response Plan is a detailed plan that outlines the steps to take immediately after an incident occurs. The CDK ransomware attack highlighted the importance of having a clear, quick, and efficient response plan. Key elements of an IRP include:
An effective IRP minimizes damage, reduces downtime, and helps maintain customer trust. Regular training and drills should be conducted to ensure that all team members are familiar with their roles and can act quickly when an incident occurs.
Preparation is not just about planning; it’s also about practice. Tabletop exercises simulate crisis scenarios to test the effectiveness of BCP and IRP. These exercises provide an opportunity to identify gaps, improve response times, and train staff.
Regular training sessions with employees can be the difference between success and failure when responding to an interruption in business operations. Effective training programs give teams the resources they need during a disruption. For example, clear emergency procedures, designated roles and responsibilities, and backup forms of communication improve response times.
The CDK outage emphasizes that theoretical knowledge must be complemented with practical drills. Regularly conducting tabletop exercises ensures that everyone in your company knows their role and can act swiftly and efficiently during a real crisis. Additionally, these exercises help organizations identify additional vulnerabilities and continuously improve their business continuity plan.
Disaster Recovery focuses on restoring IT systems and data after a crisis. The speed and efficiency of recovery can significantly impact business continuity. This includes regular data backups, redundant systems, and clear recovery procedures. A well-prepared DR plan ensures that businesses can quickly return to normal operations, minimizing financial and reputational damage.
The number of cyberattacks has been increasing, with over 3,200 data breaches reported in 2023—a 78% rise from the previous year—according to a study by data firm SOAX. These breaches impacted more than 65 million individuals last year.
The CDK cyber incident is a stark reminder for businesses to strengthen their cybersecurity protocols and reassess their crisis preparedness. By investing in comprehensive business continuity planning, effective incident response planning, regular tabletop exercises, and solid disaster recovery strategies, companies can better navigate disruptions and safeguard their operations.
Is your business prepared to handle a cybersecurity incident? Contact Hartman Executive Advisors today to protect the business continuity of your organization.