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5 Steps to Improve Your Company’s IT Risk Management

by

May 5, 2021

Young Female Government Employee Wearing Glasses Uses Tablet in System Control Center. In the Background Her Coworkers are at Their Workspaces with many Displays Showing Valuable Data.

Cybersecurity is a complicated issue, which can’t be solved quickly. But as intruders come knocking at your network door, your need for IT risk management and an effective cybersecurity strategy is more important now than ever before.

Risk management, in general, is about identifying, assessing, and prioritizing risks combined with an economic application of resources to minimize, monitor, and control their impact on your organization. IT risk management deals more specifically with the multitude of potential threats that come through the digital sphere.

Here are five steps to help your business improve its approach to IT risk management.

1. RECOGNIZE THE NEED FOR IT RISK MANAGEMENT

Recently, I read an article about a 21-year-old aspiring personal trainer who was in top shape but died from the flu. The young man was aware he was sick but didn’t realize the danger he was in and that he needed urgent medical attention to properly manage the risks associated with the illness he was battling.

That same scenario is true for IT risk management. Recognizing the need for risk management is the first step for any company to improve its vulnerabilities to IT risk. By acknowledging that risks exist, companies can take proactive steps to assess them and develop strategies to avoid, transfer, or mitigate the impact of the risk if it ever occurs.

2. ASSET IDENTIFICATION AND CLASSIFICATION

If you don’t know what data assets are sensitive and require protection, you won’t know how to go about properly protecting them. Enumerating the amount and types of sensitive data sets that you have, and the potential cost to the organization should they be compromised or stolen, is an important step to estimating how persistent the adversary will be in their attempt to gain access to it. Which of your data sets is critically important to your organization and must be protected? What data is necessary to keep the company going from day to day? In this step, you will map out all of the data sets that are vital to your organization and consider where attacks may come from.

Assets, however, include more than just your data. Assets are classified as either tangible and intangible assets:

  • Tangible assets are assets such as computer systems, data centers, and machinery.
  • Intangible assets are items such as data, processes, contracts, patents, licensing agreements, domain names and staff (consider the value of their skills to your organization).

3. DETERMINE RISK VECTORS

Risk vectors are the weakness or methods through which threat actors will infiltrate their target that puts company assets at risk. Each asset type has a different risk vector, which can be technical or non-technical means, such as social engineering/masquerading, weak credentials, unpatched systems, brute-force attacks, viruses and malware, DNS attacks, natural disasters, and inadequate physical security, to name just a few.

Determine risk vectors for your company’s critical assets by creating a chart for each asset and listing the possible means of attack by which it could be compromised. This step in the IT risk management process is an essential input to the next phase, which is to determine a risk rating for your critical assets. A common method to help guide you in this step is the STRIDE threat modeling technique.

4. QUALITATIVE VS QUANTITATIVE ANALYSIS

In IT risk management:

  • a qualitative analysis is determining the likelihood a vulnerability will be exploited, and
  • a quantitative analysis is the numerical risk rating value or monetary value of loss associated with a compromise.

The analysis of the risk using a quantitative measure helps to guide a company in its determination of how important it is to eliminate the risk. If the likelihood of a risk being exploited is very low and the resultant impact to the business is also very low, purchasing decisions based on the estimated cost of impact to the business are easy to make.

High impact/high probability risks should result in project funding to eliminate risk or possibly transfer risk using insurance, while low impact/low probability risks may be accepted with no further cost to the company. Performing this step in the IT risk management process demonstrates the requisite due care that the C-Suite, boards and, shareholders expect.

5. PREVENT AND REPEAT

In summary, IT risk management is an important business process that an IT professional must be able to explain and manage at a corporate level. If a risk exceeds the company’s tolerance level and must be eliminated, it is necessary to develop a process that can be incorporated into the company business model. At the same time, stronger IT security measures should not hinder business operations.

Measures to mitigate risk could include:

  • having backup IT sites and a business continuity plan that is periodically tested,
  • formal training and security awareness for all levels of the company,
  • a robust and audited firewall implementation,
  • network segmentation,
  • formal IT security policy and standards, and
  • regular auditing, compliance activities, and appropriate security controls.

Make sure your IT risk management process is centrally managed, is clearly defined, and can be consistently repeated. Track your successes (and failures), and always ask for feedback.

What is Risk Management?

Risk management is the process of identifying, assessing, and responding to risks. It is an ongoing process that should be integrated into all aspects of an organization’s operations. The goal of risk management is to minimize the impact of negative events and maximize the opportunity for positive events.

There are three key elements to risk management: enterprise risk management, risk management framework, and risk management plan.

Enterprise risk management is a holistic approach to managing risk that takes into account the interrelatedness of risks across all aspects of an organization. It is a proactive approach that seeks to identify and mitigate risks before they materialize.

A risk management framework is a set of policies, procedures, and processes that provide a structure for managing risk. It should be tailored to the specific needs of an organization and be regularly reviewed and updated as needed.

A risk management plan is a document that outlines how an organization will identify, assess, and respond to risks. It should be designed to meet the specific needs of the organization and be reviewed and updated on a regular basis.

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