Cybersecurity in construction: How CIOs can better protect their firms

Construction firms face a rising level of cybersecurity risk. But too many firms still don’t have a proper cybersecurity strategy in place, which is likely why Wipfli’s survey of 308 construction executives found that 80% reported experiencing at least one data breach within the past year.

However, there are proven steps and processes you can implement to strengthen your defenses. Done thoughtfully, a cyber strategy will not only protect your business, data and infrastructure but also give you an opportunity to modernize your systems to meet the changing demands of the industry.

Let’s explore further.

Why does cybersecurity matter for construction firms?

For construction firms, investing in modern cybersecurity and IT infrastructure, whether as an internal capacity or through outsourcing, carries clear business benefits. Beyond mitigating the risk of a cyberattack, stronger cybersecurity also creates business opportunities and even makes it easier to recruit top talent.

Key benefits include:

1. Reduced risk of attack: This is obviously a big one. With better defenses and more modern systems in place, you’ll be less likely to experience a major (and majorly expensive) cybersecurity incident or suffer significant ripple effects if an attack does get through.
2. DoD contracts: If you meet CMMC requirements, you’ll be able to bid on DoDand other government contracts.
3. Data center bids: Strong cybersecurity is also often necessary to compete for complex private sector projects like data centers.
4. Competitive advantage: If you get ahead of competitors in upgrading your systems, you’ll be able to move faster, with a lower risk of being slowed by an attack.
5. Recruiting: You’ll have an easier time recruiting talented employees who want to work for innovative companies.

Top cybersecurity challenges faced by construction firms

Every industry is vulnerable to cyberattacks, but construction may be especially so. The construction business tends to be fairly traditional, with an emphasis on following proven processes rather than chasing new ideas — a tendency which has left firms more exposed than their counterparts in other industries.

Here are some of the top reasons that construction firms are vulnerable to cybersecurity incidents:

• Underinvestment: Construction companies have historically underinvested in IT and cybersecurity. Manufacturers, for example, spend 3% to 5% of revenue on IT, while construction typically spends closer to 1% to 2%.
• Large financial transactions: Construction firms buy large amounts of materials and expensive equipment. They also receive large draw payments from their clients. This makes them lucrative targets for cybersecurity attacks due to their historically poor security investments.
• Rising insurance premiums: Insurance providers are now charging construction companies higher cybersecurity insurance premiums because of the higher risk those firms face.
• Cyber requirements in contracts: The Department of Defense and other federal agencies now require construction firms to meet cybersecurity maturity model certification (CMMC) requirements in order to bid for contracts. Private data center contracts will often have similar rules. National Institute of Standards and Technology (NIST) security requirements are also appearing in many contracts.
• Disconnected systems: As many construction firms still rely heavily on older software and technology, they frequently don’t have integrated, cloud-based systems in place. This usually leads to fragmented, siloed data and a larger footprint for an attack.
• Slowed productivity: Companies using outdated tech systems are often less productive than their peers. From a cyber-specific perspective, consider the impact an attack could have on your ability to conduct day-to-day operations.
• Limited IT talent: Construction firms using legacy tech solutions may struggle to hire skilled IT employees, as talented candidates typically prefer to work for businesses that use the latest tech.

All of these elements either increase the risk of a cyberattack, prevent your business from bidding on certain contracts or otherwise limit opportunities. Fortunately, there is a relatively straightforward solution to this problem.

Cybersecurity best practices for construction companies

Implementing a practical, up-to-date cybersecurity strategy will help mitigate your company’s cyber risks and reduce the likelihood of suffering a costly cyberattack.

Think holistically

In many cases, you’re often better off upgrading your cybersecurity and IT infrastructure over one defined upgrade period rather than doing it piecemeal over several years. This holistic approach allows you to modernize your entire tech stack to not only strengthen your cyber defenses but also transition to cloud-based, integrated systems that will help you remain competitive with your peers.

Do a cybersecurity assessment

An effective cybersecurity risk management strategy should be tailored to your specific threats and vulnerabilities. Start by working with a cybersecurity advisor to do an IT health and cybersecurity assessment, which will often be based on the NIST Cybersecurity Framework (NIST CSF) assessment. This will help you identify high-priority weak spots that need to be addressed, as well as which vulnerabilities may be lower-priority.

Create a roadmap

Based on the results of your assessment, create a roadmap for strengthening your cybersecurity and IT capabilities. When developing your roadmap, also consider tech trends within the construction industry, the age of your own systems, and any critical control gaps you’ve identified.

Establish a budget

Once you know what needs to be upgraded, put together a budget based on criticality. A full tech and cybersecurity upgrade might take over a year, although this can vary depending on your organizational needs, so your budget can help you plan out how to make good use of that time by deciding which systems to upgrade first. You can use the priority ranking from your assessment to good effect here.

Leverage outsourcing

If upgrading your cybersecurity and tech stack on your own sounds like a lot to handle, consider outsourcing and managed services support. Outsourcing is especially useful for construction firms because modern cybersecurity typically requires more resources than a single, in-house IT person can bring to bear. An outsourcing relationship can allow you to access top-tier cybersecurity talent without needing to hire your own larger internal team, and can also include strategic leadership like a vCIO or vCISO.

Train your team

An outsourcing partner can’t do everything for you. You’ll still need to train your own team on how to limit cybersecurity risks by avoiding phishing attempts or other common attacks. For maximum effect, this training should be ongoing, not just a one-time event.

What are the key barriers to change that construction CIOs must overcome?

Construction leaders who want to spearhead a cybersecurity and IT upgrade may first need to overcome several barriers to change. These include:

• Lack of clarity around risks: Some leaders may not realize just how vulnerable their business is. To create buy-in around an upgrade, you can ask an advisory firm to conduct penetration testing of your existing systems.
• Cultural resistance: Construction firms that still rely heavily on legacy systems and processes may also be culturally resistant to change.
• Confusion around regulatory requirements: Construction isn’t used to being a regulated industry, so many firms may be unaware or not fully under CMMC or similar requirements.
• Communications: Your internal IT person may struggle to articulate the business case for tech upgrades because they don’t have the knowledge and background.
• Transition or succession complications: An owner who is preparing to exit may see cybersecurity upgrades as something that the next owner can worry about — but should consider that implementing an effective, modern tech stack will actually boost the value of the business in a sale.

Learn how 308 construction leaders are deploying technology to deliver impact

Wipfli interviewed 308 construction executives to find out how firms are deploying technology today. Read the full report, “The state of technology in the construction industry” to gain fresh insights on cybersecurity, AI, data strategies and growth.

Get the original research report

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