Updated on June 24, 2024 by David Korpel
The recent cyberattack on CDK Global is a stark reminder of the vulnerabilities inherent in our increasingly digital business landscape. As a cornerstone of the automotive industry, CDK’s cloud-based system is the lifeblood for thousands of car dealerships, managing everything from sales pipelines and repair tracking to inventory management and payroll. It’s the Swiss Army knife of software solutions, tying together a myriad of processes that keep these businesses humming.
The first I heard of the hack was on Twitter from CarDealershipGuy.
When CDK first fell victim to a hack on Wednesday, they decided to take their systems offline as a precautionary measure. However, what initially seemed like a temporary hiccup quickly spiraled into a prolonged nightmare. Upon attempting to restore their services, CDK was hit again, leaving them no choice but to keep their systems dark. As I write this, 15,000 North American dealerships are still scrambling, forced to conjure up alternative methods for their daily operations, deal tracking, employee payments, and customer relations.
This debacle isn’t just a cautionary tale for the automotive industry; it’s a wake-up call for businesses of all sizes across every sector. It compels us to take a long, hard look at the systems we’ve come to rely on and ask ourselves: What’s our plan B?
Business continuity is one of those concepts that often gets pushed to the back burner. We know it’s important, but it’s easy to procrastinate on planning for worst-case scenarios when day-to-day operations demand our attention. However, as the CDK situation illustrates, being unprepared can lead to catastrophic consequences.
Let’s face it: most small businesses today are deeply enmeshed in the world of outsourced, cloud-based services. Whether it’s customer relationship management (CRM) systems, inventory tracking, or payroll processing, we’ve embraced these solutions for their cost-effectiveness and efficiency. Gone are the days when you’d hire a local payroll provider or IT specialist whose face you knew and whose doorbell you could ring if things went south. The cloud has democratized access to sophisticated business tools, but it’s also introduced new vulnerabilities.
So, what can business owners do to better prepare for potential disruptions? Here are some actionable steps:
- Audit Your Digital Footprint: Take stock of where your critical data lives. Customer information, financial records, operational data – identify all the cloud-based services housing this information.
- Implement Regular Backups: Don’t rely solely on your service providers. Establish a routine for backing up crucial data onto local storage or a separate cloud service. And remember, backups are only as good as their most recent update.
- Develop Offline Alternatives: Create analog systems or downloadable templates that can keep your business running in the event of a digital blackout. Think old-school ledgers or spreadsheets saved on your local hard drive.
- Diversify Your Digital Portfolio: Consider using multiple providers for critical services. While it might seem less efficient, having your eggs in different baskets can be a lifesaver when one system goes down.
- Create a Communication Plan: In a crisis, clear communication is key. Have a plan in place for how you’ll contact employees, customers, and vendors if your primary communication channels are compromised.
- Regular Drills and Updates: Treat your business continuity plan like a fire drill. Test it regularly, identify weaknesses, and update as needed. A plan gathering dust is hardly better than no plan at all.
- Educate Your Team: Ensure every team member understands their role in maintaining business continuity. The more your staff knows about backup procedures and alternative systems, the smoother things will run in a crisis.
- Invest in Cybersecurity: While no system is foolproof, robust cybersecurity measures can significantly reduce your risk of falling victim to attacks like the one CDK experienced.
The CDK hack is a sobering reminder that we’re often only as strong as our weakest link in our interconnected digital world. It underscores the importance of having not just a Plan B but also a Plan C and D. As business owners, we must strike a balance between leveraging the power of cloud-based solutions and maintaining resilience to weather storms when these systems fail.
Remember, it’s not about if a crisis will hit, but when. The businesses that survive and thrive are those that plan ahead, stay flexible, and never take their digital infrastructure for granted. Let’s use this wake-up call to fortify our businesses against future disruptions. After all, in the world of business, the best offense is often a good defense.
