Risk management is critical to IT governance, helping organizations avoid business disruptions and reputational loss. It also enables businesses to respond more quickly and efficiently.
Several frameworks help organizations evaluate risks and implement mitigation strategies. These include the NIST Cybersecurity Framework and ISO standards.
Risk Assessment
Risk assessment is a process of analyzing potential threats and vulnerabilities to IT systems. Its purpose is to help organizations achieve optimal security at a reasonable cost.
The most common risk assessment methods involve quantitative and qualitative analysis. Quantitative analysis provides financial results that indicate the likelihood of losses, while qualitative research involves applying people in the business to better understand risks and gain expert insight.
Once the risks are identified, the risk management team breaks them into actionable steps. These actions become part of the risk management plan and will be documented.
Technology Risk Management assessment must be conducted by companies before implementing new software or systems to prevent unnecessary costs associated with technological issues. Maintaining a technology risk assessment schedule will also give managers time to correct and remediate any problems before they escalate.
Monitoring
There are many different types of risks that companies face. These can range from systems failures and outrages to a business being hacked or data falling into the wrong hands.
Monitoring and tracking those risks is the most crucial thing a business can do to protect itself. They can do this using a risk register or a hazard and risk identification app.
This is essential to ensure that any potential problems are dealt with promptly. It’s also necessary to measure the impact these risks have on your business so you can decide whether or not to mitigate them accordingly.
Mitigation
Mitigation is the process of minimizing the adverse effects that can come from threats or disasters. These can be anything from natural hazards such as hurricanes, tornadoes and earthquakes to cyberattacks, business interruption (BC) and other forms of damage.
In addition to identifying risk, technology-risk managers must monitor the effectiveness of controls. They also should sit on architectural-review committees and establish a consistent software-development life cycle across the enterprise to deliver IT changes efficiently and sustainably.
Moreover, the IT risk team should be engaged in a dialogue with business stakeholders to identify the most valuable information assets and systems. Proprietary trading algorithms stored on laptops, employee-health data shared with third parties and credit transaction data all qualify as crown jewels that must be protected with the most robust security controls possible.
When risks are identified, the risk-management team must determine whether they should be accepted, mitigated or eliminated. Depending on the severity of the risk and how it affects performance, cost and schedule, more than one treatment strategy may be employed for each chance.
Reporting
Reporting is the process of compiling and distributing essential information within an organization. It can be a written document, spreadsheet, or dashboard designed to provide quantitative data.
It’s a crucial part of any company. It reduces the risk of losing information and allows employees to transfer knowledge across departments.
In large companies with a high volume of data, it makes sense to integrate reporting into enterprise resource planning (ERP) systems. These systems have the information bases necessary to create reports, and they can automate this process if desired.
A risk report should be based on accurate data and comprehensively include exposure information about all critical risks. It should also have limits and risk appetite and propose actions to deal with those risks.
