Target Seeks New CIO, Chief Compliance Officer

Sara Peters, Editor in Chief | 3/6/2014 | 27 comments

Sara Peters
Although the highly publicized breach of retail giant Target's customer data may have been largely due to a mistake by the company's HVAC vendor, Target's CIO has resigned -- probably after being pressured to do so by upper management.

What does this mean for CIOs elsewhere? No. 1, there's a great job opening you might want to apply for. No. 2, as we've said on E2 before, you cannot limit your information security efforts to your own infrastructure alone, because your closest partners may be your biggest threats. Overlooking that fact may not only result in a breach, it may result in you losing your job.

At first blush, that might not sound fair. The HVAC vendor, Fazio Mechanical Services, is the one that succumbed to a phishing attack, not Target.

However, Target itself has a responsibility for protecting its infrastructure against attacks -- they owe it to their customers and they assume liability for third-party service providers' security failures as part of the Payment Card Industry's regulations.

Mathew Schwartz at Information Week explained:

    Why might Fazio Mechanical Services have had access to Target's network? The answer is because Target -- like any other organization that manages a relatively modern store, factory, or office building -- likely relies on refrigeration and HVAC systems that can be remotely managed by a third party.

So, simply denying access to Fazio and other third-party partners was probably never a great option. However, Target and all other companies can protect themselves against unauthorized access in several ways. They can protect identity and access credentials, monitor how those credentials are being used (to ensure that the accounts are not exercising privileges they're not authorized to have), isolate the part of the network infrastructure accessible to third parties from the rest of the network, and monitor the data leaving the network as opposed to just monitoring what's coming into the network. The investigation into the breach is ongoing so it's not entirely clear whether or not Target followed all these practices.

But you'd better follow them. The scale of the breach, the 40% loss of revenue, and the departure of the CIO should provide adequate incentive.

The good news is that, in addition to hiring a new CIO, Target has stated that they are bringing on a chief compliance officer, and -- even better, in my opinion -- "elevating the role of the chief information security officer."

What do you think? Is it fair for Target to replace their CIO? What sort of person do they need to hire? What are you doing to protect your organization from the security errors of a third-party service provider? Do you think you need to extend your security awareness program and compliance efforts to include these third parties? Let us know in the comments below.

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singlemud   Target Seeks New CIO, Chief Compliance Officer   3/28/2014 3:01:51 PM
Re: Re : Target Seeks New CIO, Chief Compliance Officer
I can see that CIO job is pretty challenge, if they did a great job, you noticed nothing. if they forgot something, then they are blamed.
Anand   Target Seeks New CIO, Chief Compliance Officer   3/23/2014 1:42:55 PM
Re : Target Seeks New CIO, Chief Compliance Officer
@ Sara Peters, you have prescribed a very useful way to deal with third party security problems. Part of the network that could be accessed by third party providers should be isolated from the main network of the organization. I would put all my money on monitoring what is going out of a network because whatever bad things come into the network are ultimately aimed at taking something out of the network.
SunitaT   Target Seeks New CIO, Chief Compliance Officer   3/21/2014 2:23:14 PM
Re : Target Seeks New CIO, Chief Compliance Officer
There can be no question that Target is responsible for the breach instead of Fazio for the simple reason that customers put their trust in Target, not in any other third party partners. They are answerable to their customers so they can't just pass the buck to some third party service providers. It is their responsibility to conduct standard security checks before hiring any third party and follow up with security awareness programs.
impactnow   Target Seeks New CIO, Chief Compliance Officer   3/17/2014 1:13:53 PM
Ultimately the responsibility needs to reside somewhere in the organization, so while the dismissal of the CIO may seem like a scapegoat decision she was ultimately responsible for the security. Your point about securing access and usage is really at the heart to f the issue at Target. Every company works with many vendors and has employees with varying levels of access. These access levels need to be monitored and carefully dispersed. The CIO at least has valuable new experience to add to the resume—she understands very ultimately how easily a system can be made susceptible to fishing and understands appropriate next steps. Sadly this is probably not the last time we will see this in the news!
shjacks55   Target Seeks New CIO, Chief Compliance Officer   3/16/2014 12:34:03 AM
Re: Target Seeks New CIO,
1.) Fazio has stated that their access was to submit billing, not to manage systems at every store.

2.) Malware was not deployed to every POS device or even every Store server by the perpetrators. The malware piggybacked on the Corporate Data Center remote deployment tools. It would be safe to say that staff would be direct reports to the CIO. Permissions to access those deployment tools were not restricted.

3.) Not sure why CCO was included. Doesn't seem that any of the breach was CCO responsibility. If anything the people in sales responsible for overcollection of customer information should have been axed.

4.) Military rules require restricting physical and binary access to critical systems. Example, sneakernet to install a systemwide patch means walking past a guard and unlocking a door. Not advocating sneakernet (well maybe), but corp IT should have private VLANs for accounting & operations tasks and separate VPNs for payments and operations.

5.) The perpetrators did not go to every store to install the exploit and go to every store to retrieve the data. Direct access to the internet for POS, not even a firewall. Does anyone think that Sears/Kmart giving associates web surfing POS tablets is a good idea?
tekedge   Target Seeks New CIO, Chief Compliance Officer   3/15/2014 3:40:06 PM
Target Seeks New CIO,
Talk of being at the wrong place at the wrong time. Mistakes that were not resolved led to this big breach and of course the current CIO took the fall. Target did not regard the saying A stitch in time saves nine... and they took a huge loss and also compromised their customers security. 

Not addressing issues and taking security measures if and when needed especially when you are dealing with retail in itself is a big no no.

Whomever you hire if they are not able to be on the top of all these issues it is going to be repeated again and again...
jastro   Target Seeks New CIO, Chief Compliance Officer   3/14/2014 7:46:25 AM
Re: Refresh Responsibility
According to the Times today, Target knew earlier about hacker issues. I guess the full story isn't out yet -- time will tell

>> Target acknowledged on Thursday that its computer security system had alerted it to suspicious activity after hackers infiltrated its network last year, but the company ultimately decided to ignore it, allowing what would become one of the largest data breaches ever recorded to proceed without a hitch.
Technocrat   Target Seeks New CIO, Chief Compliance Officer   3/11/2014 1:33:41 AM
Re: Target Seeks New CIO
I do think it is was fair for Target to replace their CIO.   I really don't think she had the technical background to really hold the position.  I know Retail is a world unto itself, but she did not ever have a technical background, having joined Target as an assistant buyer.

And then Director of Guest Operations, which ultimately lead to Sr. VP and CIO.  According to reports

 But of course, that's how I would have chosen my CIO.  What are we in tech to make of of this quizzical path to a Retail based CIO position ?  

I guess this underscores just how misunderstood IT actually is.  And the fact it is often who you know and not what you know that counts - especially in Retail.
Broadway   Target Seeks New CIO, Chief Compliance Officer   3/10/2014 8:52:40 PM
Re: Target Seeks New CIO
@zerox, that is a scary but valid point. It's similar to the analogy of how to outrun a bear. You don't have to be faster than the bear, just the guy next to you. Same here. You don't have to be error-free ... just don't be the person who gets caught at the worst time.
LuFu   Target Seeks New CIO, Chief Compliance Officer   3/10/2014 7:57:44 PM
Re: Refresh Responsibility
@Curtis - Not sure Western society are quite attune to Japanese bushido and are ready to commit seppuku for failing the corporation. In the past, there have been executive managers jumping off Ikebukuro's Sunshine Building to cover for their higher ups and to save face for the company. Not everyone takes the leap - Last year Mizuho's President Sato took the heat for his bank's accepting Yakuza loans.

Sato gave up 6-months salary and stepped down as Chairman of the bank. Of course, he actually worked for the parent company and didn't have to give that up, essentially committing seppuku without the bleeding.
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