Indiana Manufacturing Companies Are Racing to Meet New Federal OT Security Requirements That Could Make or Break Their Future

The manufacturing landscape in Indiana is undergoing a dramatic cybersecurity transformation in 2025, as new federal operational technology (OT) security requirements force industrial companies to fundamentally rethink their approach to protecting critical infrastructure. The Department of Defense’s Cybersecurity Maturity Model Certification (CMMC) program became effective November 10, 2025, creating unprecedented compliance pressures for manufacturers across the Hoosier State.

For Indiana’s robust manufacturing sector, which includes automotive, steel production, pharmaceuticals, and aerospace components, these new regulations represent both a significant challenge and a critical opportunity. Industrial organizations are significantly increasing their cybersecurity investments, with budgets expanding from 6% to 7% of total IT spending in 2025, as the average cost of a data breach in the industrial sector reached $5.56 million in 2024.

The New Federal OT Security Requirements Landscape

The regulatory environment has become increasingly complex for Indiana manufacturers. The CMMC rule establishes new cybersecurity requirements for federal contractors and subcontractors, introduces phased compliance deadlines, and heightens potential False Claims Act risks tied to inaccurate reporting. This affects not only defense contractors but extends to civilian agencies that may incorporate CMMC requirements into their contracts.

The Cybersecurity Maturity Model Certification (CMMC) 2.0 is the cornerstone of federal cybersecurity compliance in 2025, applying mostly to DoD contractors with the goal of protecting sensitive government information within the defense supply chain. The framework operates across three distinct levels, each with escalating requirements and assessment protocols.

Level 1 focuses on basic safeguarding of Federal Contract Information (FCI), while Level 2 addresses Controlled Unclassified Information (CUI) with more stringent NIST SP 800-171 compliance requirements. Level 3, still being finalized, is meant for contractors working with highly sensitive data and will rely on NIST SP 800-172 with government-run audits.

Indiana-Specific Cybersecurity Compliance Challenges

Indiana manufacturers face unique challenges beyond federal requirements. Governor Mike Braun signed Senate Enrolled Act 472 (SEA 472) in May 2025, requiring public entities to adopt specific policies regarding technology resource use and cybersecurity and meet certain compliance requirements. While this primarily affects public entities, it signals the state’s commitment to comprehensive cybersecurity governance.

The convergence of IT and OT systems in Indiana’s manufacturing facilities creates additional complexity. U.S. manufacturers are using AI for predictive maintenance, quality control, and supply chain optimization, but operational technology (OT) environments require specialized security approaches as the convergence of IT and OT systems creates new attack vectors that traditional cybersecurity approaches may not address.

Manufacturing companies in cities like Indianapolis, Fort Wayne, and Evansville are discovering that with an average downtime cost of $88,000 per hour, manufacturing facilities must prioritize controls that maintain production uptime while enhancing their security posture. This creates a delicate balance between operational continuity and security compliance.

Implementation Strategies for Indiana Manufacturers

Successful compliance requires a strategic, phased approach. Manufacturing cybersecurity leaders must balance framework requirements against operational demands, with industrial organizations beginning by conducting a comprehensive assessment of their OT security infrastructure, documenting current segmentation capabilities, and identifying compliance gaps across their manufacturing networks.

Key implementation priorities include network segmentation, which has become critical for OT environments. The IEC 62443 standard, specifically designed for industrial automation and control systems, emphasizes zone and conduit segmentation for OT environments, addressing the unique challenges of manufacturing networks while requiring organizations to create secure zones and maintain operational efficiency through modern microsegmentation that enables software-defined security zones without disrupting production processes.

Indiana manufacturers are also investing heavily in identity-based security solutions. Nearly 48% of manufacturing organizations align their industrial control systems with the NIST Cybersecurity Framework, with identity-based microsegmentation supporting NIST’s core functions by enabling granular OT access controls and continuous monitoring of industrial network traffic patterns.

The Role of Local Cybersecurity Partners

Many Indiana manufacturers are turning to specialized cybersecurity Indiana providers to navigate these complex requirements. Local expertise becomes crucial when dealing with the intersection of federal compliance, state regulations, and industry-specific operational needs.

Companies like CTS Computers, which has been serving Indiana businesses since 1991, understand the unique challenges facing local manufacturers. Their approach focuses on practical cybersecurity solutions that protect against common threats without overwhelming complexity, implementing protection appropriate for company size and industry while keeping systems usable for daily operations.

Budget Allocation and ROI Considerations

The convergence of IT and OT environments is driving new budget allocation patterns across manufacturing organizations, with network security infrastructure typically consuming 35-40% of the budget covering modern microsegmentation solutions, industrial-grade firewalls, and OT-specific network controls, while personnel and training account for 25-30%, and compliance and risk management consume 20-25% of cybersecurity budgets.

Indiana manufacturers must view these investments strategically. Staying compliant with security and privacy standards opens doors to new opportunities, gives manufacturing businesses extra credibility, and helps earn the trust of government agencies, defense contractors, and healthcare organizations, providing access to many high-value contracts.

Looking Ahead: 2025 and Beyond

The regulatory landscape will continue evolving. As cyber threats targeting industrial environments grow, 2025 marks a pivotal year for OT security regulations, with governments and regulatory bodies enforcing stricter cybersecurity mandates to protect critical infrastructure, energy grids, and manufacturing systems from cyberattacks.

Indiana manufacturers who proactively address these requirements position themselves for long-term success. Organizations implementing modern, identity-based microsegmentation solutions position themselves to address emerging security challenges while maintaining operational efficiency and framework compliance.

The path forward requires careful planning, strategic investment in modern OT security solutions, and a clear understanding of industrial framework requirements. For Indiana’s manufacturing sector, meeting these new federal OT security requirements isn’t just about compliance—it’s about securing their competitive future in an increasingly connected industrial landscape.