These days, IT risk management is quickly becoming a part of running any business. Regardless of the industry, understanding IT risks helps management increase security, reduce costs and achieve greater accomplishments. Failure to properly identify and mitigate IT risks will set any business up for serious data breaches and financial losses.
IT Risk Basics
An IT risk is defined as any potential threat to data, business processes, critical systems and information technology. Management is responsible to identify vulnerable areas, implement effective controls and continually improve processes. Employees are expected to follow policies, report problems and contribute to problem solving efforts. The collective goal is to reduce the wait times between control testing, bureaucratic processes and solution implementation. Because there will always be labor, resource and financial constraints, certain risks must be managed instead of mitigated. By holistically evaluating and sharing the impacts of security risks, management will reduce problems and increase organizational effectiveness.
The first step of IT-based risk management is to perform a comprehensive risk assessment. Companies use these assessments to determine the severity of the potential threat. The tangible deliverable of this process is a formal risk assessment report, which is a living document that identifies potential vulnerabilities and the current controls for minimizing or eliminating the associated risks.
In order to determine the probability of a future incident, IT system threats must be analyzed from both operational and technical perspectives. A numerical ranking system is often used to specify the threat’s level of impact, which in turn produces a measurable value for the affected IT assets and resources. Risk assessments involve the universal steps of system characterization, threat identification, control analysis, probability determination, impact analysis, control recommendations and follow-up evaluation.
Risk Management for New Systems
Some risk assessments are conducted before companies invest in major products, such as new ERP software, hardware upgrades or even whole IT systems. During the planning phase, the scope and purpose of the IT system are compared to the security requirements. As the IT system is designed and developed, security controls are integrated into the IT architecture and programming. Before employees can access the new software or system, IT professionals will test, verify and configure the system’s security features and functions. Once the new IT system is officially accessible, risk management activities shift to monitoring activities, security maintenance and adjustments to changing policies and processes. The final phase involves properly moving, archiving and disposing data and files in secure and systematic ways.
Effective risk management requires full-time managerial participation and support from IT professionals. Senior management is ultimately accountable for providing the resources to maintain security and develop the capabilities to accomplish IT goals. They incorporate IT risk assessment activities into their strategic planning processes. Chief information officers are responsible for the company’s IT budgeting and performance activities. Department managers are responsible to implement and enforce proper controls that maintain data integrity and confidentiality. These managers are expected to approve any major IT system changes, such as software or hardware enhancement. Supervisors that deal with business operations must ensure that their employees follow IT policies and protocols. Lower level supervisors have the power to improve risk management through holding training and holding employees accountable.
You might also like: 100 Great Websites for Computer Scientists and Programmers