For securing the continuity and effectiveness of the IT system, a well-planned IT risk management process is highly important. With the development of information management systems, specialists have figured out the substantial growth of risk factors in IT system management. Organizations rushing into an IT project or some sort of new product development without any sort of risk identification and assessment often find these efforts end up in failure.
But how can we implement an integrated IT risk management process to prevent such failures in IT systems, even in day-to-day operations? Today, we are answering this question with a step-by-step guide to a successful IT management process. Stay tuned till the end for a complete and precise concept of the IT risk management process.
What Is IT Risk Management?
IT risk management (IRM) refers to eliminating the probability of unexpected outcomes of an IT system. Malicious exploitation of an information system’s vulnerability is the key to such outcomes. IRM may include audits for identifying IT risks, addressing IT risks, and taking essential steps to manage the risks. Such management features the information security risk management of an organization’s confidential data. Also, the goal is to,
- Manage risks associated with cyber criminals, amiable insiders, or outsiders.
- Reduce the susceptibility that impacts the availability, confidentiality, and trustworthiness of data.
- Effectively manage the potential consequences of an adverse cyber event with a risk register.
Theoretically, IT Risk = Threat x Vulnerability x Consequence
This equation helps to manage, control, and minimize IT risk. A sturdy IRM strategy and process are essential for securing the confidential data of an organization.
Why Is IT Risk Management Important?
The average cost of IT downtime can range from $5,600 per minute to $9,000 per minute. That’s an expensive experience for any business. Robust IT management can prevent such unwanted scenarios in a business. Organizations can prepare to take initials to reduce the impact of a cyber-attack through proper IRM.
So much of a company’s profitability and sustenance depend upon its IT infrastructure. That’s why IT risk management has become vital to secure business continuity.
Step-by-Step IT Risk Management Process
IT risk management enables critical steps in an organization's IRM program. From identifying the storage of information to continuous monitoring, we have described 5 steps of IT risk management. These steps also include the key takeaways of these important steps,
1. Identify Risks
The first step of the IRM process is to identify the vulnerable points in a data storage system. Organizations generally adopt two data storage options. One is on-premises servers, and the other one is cloud data storage systems. Cloud-based data collection, channeling, and storage pose a higher risk of data theft. That’s because organizations often have limited visibility into the usefulness of their controls.
Thus, server hardware in an on-premises location imposes a lower risk than a cloud-based server. The information risk assessment identifies the potential risks in such locations. Additionally, the risk identification process evaluates the vulnerability of users of IT systems. With a clear forecast, organizations can take preventive measures to react in critical situations. Consequently, it minimizes the effects and saves time and money.
2. Analyze and Assess the Data and Their Risks
Analyzing the risk is the second step to creating a sustainable information technology system. The main target of risk analysis is to review the risk and its potential impacts on the business. With the awareness of where your data resides, it is also important to know the characteristics of the data you collect. All types of data are not created with the same purpose.
For example, personally identifiable information (PII) includes data. Cybercriminals often target personal information with the aim of selling it on the Dark Web. As a result, personally identifiable information (PII) is a high-risk asset. Meanwhile, low-risk information, such as marketing copy, is also stored in your system. If any cyber intruder obtains a copy of an SMM advertisement, for instance, they can’t vend the copy online. All these are in a shell that works as a shield for cyber security for an organization.
3. Prioritize Risks
Now that you are aware of all types of data assets and the risks associated with them, you need to prioritize the risks. Each type of data asset resides in a particular storage location. You need to evaluate how the characteristics of your information impact or even provoke a malicious actor to attack to some extent. There is an easy equation for calculating risk level,
Risk Level = Likelihood of a data breach X Financial impact of a data breach
For example, a low-risk data asset may be stored in a high-risk location, such as a file-sharing tool. However, the financial impact of a cyber attack on this information is minimal for your business. As the appropriation of these low-risk data assets has a lower or no impact on your financial statement, these can be categorized as low-risk.
In contrast, cyber attacks on a high-risk data asset. For instance, your customers' personally identifiable information (PII). These are typically stored in a high or moderate-risk location, such as a private cloud. Breaching of these data can have a deleterious impact on your organization. As the impacts can be devastating, such possibilities should be categorized as high-risk. We strongly believe that mitigating risks with equal care can not be an exception. However, prioritizing the risks enhances the effectiveness of a risk mitigation plan.
4. Plan and Implement Risk Response
Setting your risk tolerance is also crucial for an effective IT risk management process. As we discussed, not every risk is equally alarming or has equal financial impacts on your business. The risk manager should have the absolute freedom to decide whether a risk should be accepted, transferred, mitigated, or overlooked. For example, you may purchase IT risk management insurance to respond to a potential risk that is already evaluated as a higher one.
Reduced controls, such as firewalls or encryption, act as shields against malicious actors. There is no doubt that risk is a core part of any system or business. You can not uproot the risks of malfunctions, but you can respond to them to minimize the negative impacts on your business.
5. Monitor and Review Risk Response
Cybercriminals are always developing new gambits to trick your IT system. For example, as companies have adopted preventive measures for new ransomware strains, malicious actors have responded by focusing more on cryptocurrency and phishing. You need to monitor the effectiveness of the initials you have taken and the outcomes of your response to the IT crisis. It will help you to grow a more functional and upgraded system. Additionally, it will help your risk management team and stakeholders face new risks with best practices and risk management strategies.
Conclusion
Information security management processes are undergoing a hyper-transformation. An effective IT risk management system urges continuous upgrades for optimal safety from cyber attacks.
