The Pipeline Hack: What Are the Lessons for Tech in the Utilities Industry?

Reliance on remote technology saw many companies through the global shutdown during the pandemic. The crisis pushed security teams to quickly find protective measures and limit exposure due to hundreds or thousands of employees accessing company networks remotely.

At the same time, IT resources were making heroic efforts to protect and support their businesses, hackers and other bad actors exploited gaps and stepped up the theft of individual and company information.

Nowhere was this more evident than in the Colonial Pipeline hack. We’ll start with a discussion of what happened and its wider implications for digital transformation in the utilities industry.

What Happened During the Colonial Pipeline Hack?

The Colonial Pipeline, an asset of Colonial Pipeline Co., is the East Coast’s largest oil pipeline. it covers more than 5,000 miles and provides nearly half the fuel in the region. In May 2021, hackers exploited vulnerabilities in the supply chain to shut down the region’s fuel supply for several days.

Let’s take a look at the timeline of events:

• May 8, 2021, Colonial Pipeline Co. reveals the hack.

• Same day, the pipeline shuts down.

• May 9, the U.S. Department of Transportation (USDOT) announces temporary service interruptions.

• May 10, the FBI announces that the criminal organization Darkside orchestrated the hack.

• May 12, Colonial delivers some fuel, but the pipeline remains shut down.

Over the next weeks, the pipeline gradually returns to business as usual.

Lasting Impacts

The Colonial Pipeline hack affected millions of customers and showed the vulnerability of compromised supply chain systems. For the utilities industry, this was an expensive wake-up call. While it’s important to maintain trusting relationships with customers and vendors, large-scale hacks make it necessary to shore up vulnerabilities that hackers can use to reach networks intended for trusted partners.

To conduct the necessary vendor risk assessments, utility companies must make a concerted effort to get the right resources in place to secure their own networks and build a seamless, secure vendor ecosystem.

Building the Right Skills to Cope With New Market Realities

Now is the time for digital transformation in the power and utility (P&U) sector. The Biden Administration has earmarked $2 trillion to modernize the electrical grid and make it 100% carbon-free by 2035. However, if utilities companies cannot secure their networks, incidents like the Colonial Pipeline hack could become commonplace on front pages and news feeds across the country.

Push for Cyber-smart Employees

As P&U companies move towards decentralized systems to support the need for remote connectivity and collaboration, they also need to partner with third-party managed service providers or develop in-house expertise in maintaining cybersecurity.

Finding cyber-savvy employees poses a number of challenges for even the most sophisticated utility companies. There is a gap between supply and demand for candidates who can navigate AI, big data, and machine learning along with closing any security gaps between vendors, customers, and utility companies.

Here are a few tips to keep in mind for recruiting or outsourcing efforts:

• Promote the Opportunity. Utilities should look in-house for capable employees willing to widen their skills set. This can be beneficial for a number of reasons. Employee development promotes retention and satisfaction. In turn, this makes great advertising during the hiring process.

• Change the Culture. Advertise if you have opportunities for remote positions. This allows you to widen your net of potential security experts. You can also partner with firms, such as Valicom, which have tools that can help you automate and secure data transfer with vendors, customers, and employees working remotely.

• Cast a Wider Net. Adding diverse candidates to your talent pool brings new ideas and establishes teamwork. it also helps cultivate original solutions for security and other components of digital transformation.

TEM providers typically have a pool of technology assets and talented consultants that can plug into your existing networks and fit in with your companies culture.

Contact Valicom today to schedule a demo and receive our free quote.

sales@valicomcorp.com

ABOUT THE AUTHOR: NANCY PECKHAM

Nancy Peckham is the Founder and President of Valicom Corporation, a leading telecom expense management and consulting firm in Madison, Wisconsin. Nancy launched the organization as one of the very few women in technology, seeing the gap in services and the opportunity to fulfill the client’s unique needs while leveling the telecom playing field. She has spearheaded Valicom’s evolving services, including a web-based TEM platform that tracks all IT assets and processes multi-level invoice approval for bill payment. To learn more, visit www.valicomcorp.com.