Dana Gardner's BriefingsDirect: Jan 14, 2024

The next BriefingsDirect IT security best practices discussion examines how a leading German home builder has adjusted to a major economic market disruption. Germany’s home building demand has recently reversed, putting pressure on builders to reduce IT costs while remaining secure.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy.

Stay with us to learn how a large, distributed workforce can be best supported by IT -- even as business conditions change and budget requirements lead to broad consolidation.

Here to share how an efficient security team helps the shift from managing surging growth to optimizing around necessary contraction is Johannes Hammen, Information Security Officer at DFH Gruppe in Simmern, Rheinland-Pfalz, Germany. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: DFH Gruppe is a major maker of prefab homes. How has the market contraction in the real estate construction business there changed your business?

Hammen: DFH Gruppe is the largest maker of prefab houses in Germany. In 2021, we created more than 3,200 houses. We have more than 1,300 employees in Germany and the Czech Republic who help us build houses.

Hammen

We had quite a high level of throughput. But as you may have learned from the news, there were changes in the past months that triggered changes inside our company. From our customers’ perspective, to get a mortgage for a house, there’s an increase in the requirements, such as higher equity, higher interest rates, and fewer subsidies by the state. On the other hand, material costs were rising, and the politics were shifting toward multi-family housing.

So, this changed a lot for us. We had to react. We had many years of with very high growth, up to a rate of 3,200 houses per year. But we needed to consolidate and adapt to the new situation. Of course, this also affects IT and security spending.

Gardner: How has your business and IT adjusted to the need for doing more with less?

Take advantage of downturns to adjust

Hammen: During a period of very high growth, there were other priorities than security and structuring processes in such a way that they are very efficient and very stable. You have to keep pace with the throughput in the company and you have to implement systems and fix issues so that new houses can be constructed.

Now, we have an opportunity to do consolidation, to breathe again, and take a step back. We can look at our processes, increase the efficiency, and implement new tools, which we did not have time to do before.

Gardner: Many times, in the past when we’ve had disruptions either from growth or rapid changes or interaction, we try to work smart and use some technology to its best advantage.

How have you been able to do that, given you have a large, distributed workforce in the field. You work with many partners, and you have a large supply chain?

Hammen: As you said, we have quite a distributed workforce. We are focused on the German market, but that doesn’t mean that we are doing everything in-house. You can imagine that to design and construct a house is quite a large process that needs to involve a lot of experts.

For example, we have more than 650 sales contractors spread across Germany, who are working independently. They guide our customers in the process of buying and building a home.

We need to coordinate and manage all of these contract partners across the whole process. Every external partner has different rules, policies, mindsets, and backgrounds. It's really hard to keep everyone on the same page.

We also have many different types of skilled handymen who construct houses. We have more than 260 partners of all sizes, from small companies, with two or three handymen and someone in the back office, to very large companies with 500 to 1,000 employees who support us on different steps in the house-building process -- such as heating, electricity, and so on.

We need to coordinate and manage all of these contract partners across the whole process. Every external partner has different rules, different policies, a different mindset, and a different background. So, it’s really hard to keep everyone on the same page, especially with respect to security.

Gardner: It sounds as though there’s a great diversity, particularly among the types of IT, as well as the workforce style and culture. That means that you’re the hub on a multi-spoked wheel. How can you impose security without alienating or slowing people down? That must be a difficult balance.

Hammen: It is. We try to consider everyone’s needs and requirements in the whole process. Also, we see it more as an opportunity for everyone, not as a slow-down mechanism as some people view it.

Security is a door opener for so much process optimization and so many innovative ideas. If, for example, you try to implement security in part of a process, you have the chance to remodel the process to be more efficient in general -- or to create a new business model out of it.

This is the story that we want to tell everyone. We try to not spend too much time on the complicated things, and to hide those things from our users and our partners. We want to build a platform, a solution that everyone can use.

Why should a sales expert, for example, have to think about IT security topics? We in IT just implement a solution and provide it as a service to our internal customers and to our employees. It’s a good tradeoff between having a high level of security and also not slowing down the business.

Gardner: You are re-engineering processes by taking advantage of technology. What was it about the technology you were using before that made it difficult to achieve your goals?

Hammen: Everyone knows that there have been lot of huge technology advancements in the past months and years regarding artificial intelligence (AI) and all that. But even before that, our focus during our high-growth phase was not on security; not on getting the latest, most innovative technology. We had just enough security and IT infrastructure that was working fine and was fulfilling the needs of the business.

But in the last one to two years, we looked to the IT and security vendors for new concepts. There were a lot of transformations, especially with respect to security, such as getting to zero trust, for example. This is quite a new concept and we needed to rethink a lot of our past decisions.

Gardner: Part of the ability to control security means getting more data about systems, which you can also use to then be more productive. Is your IT organization using security improvements as an accelerator to better productivity overall?

Collecting security data is good business

Hammen: We are currently working on this and on getting transparency for this larger aspect of security. What we have achieved already is that security is a good vehicle to transport the key performance indicator (KPI) approach into other departments and areas of the company.

In security, and also in IT, we try to measure everything. We try to measure up-time, we try to measure incidents, and so on. You can transform or adapt these concepts to more business-related processes.

I think this is a huge advantage that we are currently trying to transport and market to our colleagues. We have seen this in software development, but in IT in general, some concepts such as how to do projects, how to achieve high quality in very complex environments -- these are very good concepts in IT that we can adapt to business.

Gardner: Yes. The productivity isn’t just about technology and IT productivity, but overall business productivity, which is so important when you’re trying to do more with less.

By being more data-driven and KPI-oriented, by measuring, testing, and verifying the results, what do you need to put in place to do that? How do you get the information and also protect it?

Hammen: It’s very important. We are implementing an information security management system (ISMS). The main concept of this system is that everything should be risk-oriented. And to measure for risk accurately, you need the data.

You need the performance indicators so that you can determine whether one risk is higher than another, or to know the trends and direction of risks. Let’s say 1,000 incidents happened, but in the other one, only 20 have happened. This is why we need the data.

We have used a lot of tools that were doing the job, but they came from an earlier age of IT. The KPI-driven approach had not yet been implemented. It was hard to get the data.

We have used a lot of tools that were doing the job quite well, but they came from an earlier age of IT. This performance indicator or KPI-driven approach had not been implemented. So, it was very hard to get any data out of it in an aggregated way.

Currently, for all new solutions and concepts that we are implementing, we are also considering what data can we get out of it and how can we use this data to drive further decisions.

Gardner: To make those prioritizations, you also need to become more predictive and be able to get out in front of these trends.

Have you been able to, in a sense, reduce the amount of time that it takes to react so that you’re not doing a backward-looking analysis, but doing forward-looking implementation of fixes and improvements?

Hammen: Yes. It is part of ISMS to also consolidate and streamline these processes. For example, in the past we were spending a lot of time on day-to-day activities, such as rolling out an endpoint security solution or rolling out an update of an endpoint security solution to a client.

This was using up a lot of our time in IT. After streamlining all of these very basic tasks, it shouldn’t require an investment of more than a few minutes, in my opinion. Streamlining all of these tasks creates a lot of new time in the budget that we can implement in looking for new solutions, looking for optimizations for already-existing products, looking for integrations between products that we already have, and between processes that we already have. Currently, this is our main focus.

Gardner: When you have a limited budget for new hiring -- and skills are hard to come by in the best of times -- you want to look to the technology to take the repetitive tasks away from the people so that they can focus more on the analytics, on the innovation, on the business-level productivity.

Do you see in the use of security technology now that capability to offload some tasks and free up human capital to do what it does best?

Hammen: Yes. Based on AI, there are a lot of tasks that we can shift toward automation or to automate in some way. Another example is if you take an average endpoint security solution from today, every solution has a cloud sandbox or something like it, with automatic execution and analysis of a suspicious file.

In the past, one expert from our company or from a contractor had to invest the time to analyze this suspicious file to be sure that it is not harmful. Now it’s just happening in the background. At some time you get the feedback on how it’s malicious or not and that’s all.

But you save a lot of time and money by automating this stuff now and even more in the future. There are a lot of other topics, such as network detection response and so on, which is just building. It’s only the start of what we can do with security automation. Also, it’s not only that we do not have the personnel anymore, but also, we want to have high quality results at the end.

Gardner: Going back to the fact that you have a large, distributed workforce, they’re out at these sites putting these homes together. They’re organizing with many contractors from many different destinations. If you can make their jobs easier, they’re of course going to be happy to work with you and adopt your approaches. Security can be seen not as, “Oh, we have to go through these arduous tasks in order to be secure,” but that in fact you’re helping them.

Do you find that the user buy-in is shifting? Are you getting a sense that when you do this well, when security becomes an accelerator to productivity, and that you get people’s cooperation and even eagerness to adopt your tools and processes?

Security is much more than passwords

Hammen: Yes. We have one advantage now that we didn’t have, maybe three or five years ago, because a lot of people are used to some security measures, such as multifactor authentication. Everyone knows this from their personal accounts at online shops, at different vendors and so on.

So, there is some base work that has already been done in the consumer market. I think a lot of companies were affected by cyber attacks that caused business disruptions. A lot of people were also feeling the result of not investing in security, not collaborating with security.

A lot of companies were affected by cyber attacks that caused business disruptions. A lot of people were feeling the result of not investing in security, of not collaborating with security.

That’s a good starting point. Also, we have to get this distributed workforce, with very different levels of understanding and backgrounds regarding IT and security, invested in this topic and also have them participate. But on the other hand, my colleagues and I also have to make sure that we take their opinions and their special needs into consideration in all of our decisions.

We cannot consider every requirement, of course. Some people just want to make it easy, easy, so no password, nothing. We still have to try to consider that different people use different mechanics or have different working habits.

Gardner: We’ve been putting this just through the lens of security, but there’s also requirements for compliance, privacy, documentation, auditing, etc. General Data Protection Regulation (GDPR), of course, comes to mind.

We all have to do things that we might think are difficult or put more of a burden on people. Have you able to bring this sense of productivity, automation, and intelligence to your requirements around compliance as well?

Hammen: On the one hand, it’s easier to show others that you are being compliant if you get all the metrics out of the software. If you have transparency in the technical and business processes, then you can easily show everyone who is interested.

We can show what we are doing. With respect to this documentation, every worker understands what we are doing and whether it’s compliant or not. I think in the past, it was more like a black box. So, I think this is a very good thing in the end.

Gardner: It sounds like there’s a multiplier effect. If you do the due diligence for security, then you get the means to adhere to the compliance requirements, which then leads you to be able to further automate and take the load off of the humans, which then leads back to more technology.

Is there an adoption virtuous cycle? Is that something you’re already seeing?

Hammen: Yes, and this is also what we try to enforce. If this positive cycle is started, it’s easy to keep it alive and keep it running. This is what we try to achieve.

Gardner: In order to get that cycle ramped up, you want to have proof points and metrics. So, are there any ways that you measure how you’re improving security and therefore also improving business productivity that will cut costs and improve and optimize the business results? Any measurements or examples that you can provide how this is helping your organization?

The proof is in the productivity

Hammen: We do not have absolute numbers that we can share. But there are a lot of what I call soft metrics, gathered from different conversations with colleagues.

For example, we are doing the total risk management process being part of an ISMS and, in this whole process, there are a lot of results coming out that at least have the possibility to help the business to run more efficiently, the chance to do more with less.

Currently, we are trying to measure it and also build up a KPI framework for measuring all of these things. But it’s very, very complex, especially when you have a distributed company and workforce.

Gardner: Are there any what we would call low-lying fruit indicators, perhaps a number of calls to your help desk, trouble tickets, less time on security administration, anything like that that you can point to and say, “Aha, we are getting payback on our investments, and we are achieving higher productivity while remaining secure”?

Hammen: Yes, there’s two KPIs I can share. One is our endpoint security solution that we switched to at the beginning of last year. With the new solution, we estimated that about 40 percent less time was spent on the security administration tasks such as this roll out, the patch management of this solution and so on.

Two, there’s been around 90 percent fewer security-related trouble inquiries since we have implemented this solution, because now we have one dashboard. It’s very easy for us to react to false positives if there are any and drag them down and do the follow-up steps to clean them up and not trigger them again in the future.

Gardner: Johannes, how in the future do you expect to be able to further this analysis, this positive feedback improvement cycle?

Do you think that having more analytics in the cloud, and using outside suppliers as a security operations center (SOC), is in the works? What do you foresee in the next three to five years regarding how security can continue to be an accelerant to productivity?

Hammen: One thing that we need to consider is it’s still quite hard to get skilled IT and security personnel.

If you are a security expert, you probably want to work for the very large companies with large SOCs, and maybe not for a construction company. There is very high level of competition in the job market.

In the next years, in order to achieve a higher-level of security while also maintaining this current level of security, we need to focus on what we can do with the workforce that we have, with our partner network, and with our internal colleagues. We need to get the best out of what we can do from the inside and also from well-thought-through outsourcing.

Using a managed detection and response (MDR) service or a managed SOC ... This is something a lot of companies still need to adapt to. ... You need to open up to these new concepts.

As you mentioned, for example, using a managed detection and response (MDR) service or a managed SOC. So, everything that you can’t do perfectly in-house because you don’t have the resources, or the workforce, you can outsource, but control it well and have good visibility into it.

This is something a lot of companies still need to adapt to. Yet some of the companies we work with have been very, let’s say, on-premises and very protective. But they have to open up.

A lot of vendors are driving toward cloud and cloud-only, of course. As a company, you need to open up to these new concepts, for new collaboration between your internal workforce or internal experts, and also to the external experts for specific topics, such as the SOC.

Gardner: That changes the nature of your supplier from vendor to services partner, right?

Hammen: Correct, long-term partner.

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