Lately there’s been a series of massive cyberattacks on software that organizations use to run their businesses, causing major disruptions to companies — and sometimes hamstringing their ability to operate.
The most recent example is the Crowdstrike cyber-security software outage that affected some 8.5 million businesses, most notably airlines, which had to cancel thousands of flights globally after their systems went down and they were unable to restart them.
There are a number of software solutions and programs that businesses use in their day-to-day operations and depending on how much they rely on one, a disruption could have costly implications, including the inability to function. There are lessons to be learned from a few massive events in the last year alone:
CrowdStrike outage — CrowdStrike, a cyber-security software vendor, in July sent out a faulty update to its security software that caused widespread problems with Microsoft Windows computers running the software. The huge outage, which disrupted airlines, financial services and many other industries, caused an estimated $5 billion in financial losses.
Within hours, CrowdStrike discovered the error and sent out a fix, but because many affected computers had to be fixed manually, outages continued for weeks for some businesses.
CDK Global cyberattack — CDK Global in June was hit with back-to-back cyberattacks, forcing it to shut down its auto dealership management platform which some 15,000 showrooms around the country use to conduct most of their day-to-day operations.
Dealerships were forced go back to old-fashioned pen and paper and other workarounds as they were unable to access CDK’s services like e-signing, appointment scheduling — and customer records in some cases.
Change Healthcare ransomware attack — In February Change Healthcare, the payment clearinghouse software vendor that handles more than $1.5 trillion worth of transactions between health insurers, pharmacies, hospitals and patients, shut down its system after a major ransomware attack that stole data about patients and encrypted company files.
The downtime cost an estimated $2 billion as patients were unable to pay for their prescriptions at the pharmacy, while payments from insurers to providers and pharmacies were also disrupted.
What businesses can do
All three of the above software vendors have been sued as a result of these events. But legal experts say that it will be difficult for affected businesses to sue CrowdStrike in particular, and win, as the grounds for litigation would be murky. Was it breach of contract? Fraud? Negligence?
And contract terms are not conducive to a large settlement in most software and platform outages. While contracts vary from customer to customer, the general terms and conditions will often limit their liability only to the amount that a customer pays for their service.
After a software outage like the one that affected CrowdStrike in July, businesses can take a number of steps to reduce the risk of future disruptions and maintain customer trust:
Phased updates: Deploy updates to a small percentage of devices first to reduce the risk of disruption if the update is flawed.
Simulation exercises: Run exercises to identify the most likely and disastrous IT crises, and develop a response.
Open communication: Keep customers informed about the situation and expected resolutions.
Customer service: Prepare customer service teams to handle inquiries and concerns.
Compensation: Offer compensation or incentives to affected clients.
Consider alternatives: Explore other cyber-security solutions from established companies that have a long track record of reliability and resilience against attacks.
