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The energy and water sectors are two of the 16 critical infrastructure sectors the U.S. government labels as vital, noting that “their incapacitation or destruction would have a debilitating effect on security, national economic security, national public health or safety.”  Utility infrastructure, particularly informational technology (IT) and operational technology (OT) systems, is a primary target for cybercriminals. Research shows that cyberattacks against energy infrastructure more than doubled from Q2 to Q3 in 2022. As the cybersecurity landscape continues to evolve, organizations must take greater efforts to secure the business-critical applications that connect their systems. 

The impact of cybersecurity attacks is significant, the statistics speak for themselves:

  1. $4.7M = average cost of energy industry breach 

  2. 94% of energy industry breaches impacted personal data 

  3. 25% of energy industry data breaches caused by Ransomware

Financial and data losses are significant but even more impactful is the human cost that utility outages cause, including lack of electricity, heat and potable water. Energy and water utility companies are challenged to protect their business-critical applications from increasing threats while their modernizing systems. Modernization projects enable a shift to  clean energy technologies and improve customer experience but must be done under the watchful eye of increased government oversight. 

Key Challenges for Utility Companies Seeking to Secure SAP Applications

The utility industry is undergoing a shift and business-critical applications such as SAP are at the center of this transformation. The challenge is that while utility companies must provide secure systems with constant uptime, they also must transform their organizations to align with current economic, political, and customer demands. Utilities leaders must navigate these complexities while protecting their organizations from ongoing cyberthreats, some of these challenges are outlined  below:

  • Increasing ERP System Attacks: Cyber attacks targeting ERP systems of utility companies are on the rise, and successful attacks have the potential to disrupt the delivery of electricity and potable water as well as put customer personally identifiable information at risk.

  • Digital Transformation: Cloud migration projects, such as SAP S/4HANA, and the SAP RISE Business Transformation Program, are part of many utility company digital transformation projects. These projects leverage technology to help reduce operational expenses. They can improve service delivery, identify and leverage assets, and improve better human capital management when deploying field technicians. 

  • Cloud Migration and Modernization: Modernization of systems, particularly cloud migrations, are critical in order to improve access to systems that contain customer and partner data. Harnessing the cloud to streamline processes and reduce costs is key to be able to operate more efficiently.

  • Critical Infrastructure Regulations: Utilities, as critical infrastructure, are subject to strict government regulations like the North American Electric Reliability Corporation Critical Infrastructure Protection (NERC CIP) standards. New clean energy legislation also means even more attention must be paid to compliance audits. Failing to comply with audit regulations can result in significant financial impacts to the organization as well as loss of reputation. 

  • Lack of Visibility: The lack of visibility into ERP system landscapes and direct threats has greatly impacted modernization projects. Inadequate tools and resources make it challenging  to ensure uptime, prior to and during, cloud migration projects

  • Understaffed Teams: Workforce shortages in the security industry are further compounded by the significant number of utility workers approaching retirement age. Cost cutting measures mean reduced hiring and training budgets for staff.

  • Security Controls for Compliance: Mandatory compliance audits often result in time consuming manual processes. Aligning security controls to compliance requirements for data and authentication for ERP systems can be a resource intensive process.

Three Best Practices to Combat These Challenges

Gain System Visibility 

Visibility into cloud, on-premise, and hybrid environments allows organizations to begin to properly identify, assess, prioritize, and remediate risk for their business-critical applications. Best practices, including implementing tools for continuous threat monitoring, are critical to gain deep insight. Consideration must also be given to visibility into potential risks for application code in development. Implementing best practices for DevSecOps and incorporating security earlier into the development cycle enables the identification and mitigation of potential vulnerabilities that can be exploited at the code level.

Utilize Actionable Threat Intelligence

Along with government agencies, utility organizations should consider employing solutions that can provide a holistic view of threats across their business systems. Timely, impactful threat intelligence can provide insightful information about current tactics, techniques, and procedures used by threat actors. This strategic intelligence can provide awareness but should also inform strategic decisions and response plans.

Automate & Streamline Processes for Successful Patch Management and Cloud Migrations 

Another critical element for secure ERP applications is to be able to automate tasks to easily manage multiple environments. One time-consuming but essential process is patch management. Patching is an illustration of the phrase “the best defense is a good offense” and is a critical part of mitigating risk for business applications. Utility companies must identify systems that are missing patches, validate that the patches are applied correctly and completely, and prioritize patching based on severity and impact. With the right tools and processes in place, organizations minimize the risk of the exploitation of critical vulnerabilities and protect their most important business assets.

Despite the rise of threats against the utility industry, best practices can and should be put in place to help organizations protect their critical applications and infrastructure as they modernize their SAP landscape. When done effectively, security won’t be a blocker but rather an enabler for digital transformation projects that are implemented more easily and securely from the start, ensuring reliability and resiliency for systems and data.

More Information

To gain more insights on SAP and the Utilities Sector check out the International SAP Conference for Utilities.