Enterprise risk management (ERM) should be a core component of every company’s overall business strategy. To maintain operations, you need to be prepared for any potential threats that may occur.
Moreover, ERM should extend to all areas of your company, including IT. Cybersecurity risks are potentially devastating, yet also challenging to track and predict; which makes IT risk management efforts crucial to continued progress.
What is IT Risk Management?
IT risk management is the process of identifying and preventing risks specific to your IT providers and processes. This applies to software services, cloud storage providers, applications, and any other area where your company uses technology. Technology advances and changes rapidly, and so new IT risks emerge just as quickly. It’s important that your IT risk management is not only well-established, but also monitored carefully so you can make adjustments as necessary.
As one might expect, every IT risk management program will look different depending on your company’s individual needs. You’ll need to account for third-party vendors and suppliers, as well as any government regulatory obligations that apply to your industry. Designing an appropriate IT risk management program will help keep your company running smoothly and your customers’ data safe.
What is an IT Risk Management Policy?
A risk management policy is an established, codified, declaration of your IT risk management efforts, broken down by your identified risks. Many companies include their policies on their website to encourage transparency. Your policy should include your identified risks and the contingency plans for each, as well as changes you’ve made in response to past incidents.
Part of this process is performing a risk assessment and determining your company’s individual risk appetite. Before cementing your policy you’ll need to know what risks you’re facing and how much risk you’re willing to take on. Once your risk analysis is complete, you can move on to delineating how the lifecycle of each risk should be addressed and what plans should be set in motion should those risks occur.
IT Risk Management Examples
There are a number of techniques a company can implement to manage its IT risk. You will likely use a combination of these strategies depending on each individual risk and your company’s overall risk tolerance. Consider each one and allow your needs to help with your decision-making process.
Risk avoidance involves making strategic choices that minimize your company’s exposure to identified risks. Avoidance is one of the more conservative risk control options and can often be very effective. The downside to this approach is that you may miss out on opportunities by being overly cautious.
This approach understands that some degree of risk is unavoidable, and that if your company wants to grow it will need to take the chance and prepare for possible consequences. An example in IT might include implementing an outside cloud server for your data storage; the convenience and ease of use might outweigh any increased security concerns.
Risk reduction is a compromise between avoidance and acceptance. Rather than avoid the risks altogether, this strategy seeks to move forward with the smallest amount of risk possible. Reducing your exposure to risk can help you prevent and mitigate any harm.
Risk transference is technically a risk reduction effort, although it is often categorized on its own. Transference is the process of shifting your risk responsibility to an outside party, usually by purchasing insurance. While risk transference can be costly upfront it can frequently save you money in the long run, especially if your company becomes a victim of a cybercrime.
What are the Types of IT Risks?
It would be impossible to create a fully comprehensive list of IT risks; cybersecurity is always changing and the potential risks change with it. Broadly speaking, most of the risks you’ll face will fall into these categories:
One of the greatest threats to your information security comes from within your organization itself. Carelessness, poor security hygiene, and lack of appropriate training on the part of your staff can all lead to data breaches, loss of information, and other dangerous risks. The easiest way to combat this form of risk is to make sure your staff is well trained and educated on proper security measures and the importance of risk management.
This is probably the category that first comes to mind when considering information risk. It’s a valid concern; cybersecurity evolves quickly, but it isn’t always able to keep up with new tactics developed by malicious actors. Hackers, malware, viruses, and even internal sabotage can all be damaging to your processes and your reputation. Developing appropriate controls such as firewalls and continuity plans for cyberattacks will keep your company one step ahead of these threats.
Hardware and software failures and data corruption can be just as damaging to your IT security as a hacker or a weak password. You should also consider the possibility of technical issues like power outages and internet disruptions caused by natural disasters. Backup generators, alternate servers, and regular inventory of your data storage will help prevent these issues from interrupting your day-to-day processes.
Why is IT Risk Management Important?
Appropriately managing your company’s information technology risk will vastly improve your security initiatives and help you prevent data loss and damage in the future. Security also makes it easier to remain in compliance with any government regulatory requirements for your industry. Your company must prioritize the protection of your and your clients’ sensitive data, and the risk management process will provide a strong foundation for your security efforts.
It’s important that your company is known as one that takes IT security seriously. Breaches can be devastating for your customers, and a reputation for strong cybersecurity can help you retain your current customers and acquire new ones over time. Your reputation for IT risk management will also help you maintain the confidence of your board and aid in gaining new stakeholders as your company grows and expands.
Most IT threats have the potential to create devastating business operations that can bring your company’s supply chain and other processes to a halt. Understanding your risks and developing contingency plans for when they occur will assure that your company remains operational no matter what happens. Risk mitigation can also streamline your processes and save you time and money in the future, allowing you to focus on your business objectives.
Manage Risk with ZenGRC
Managing risk throughout your company can be overwhelming without the right management tools at your disposal. If your organization is still using spreadsheets to track and combat your IT security risk, it may be time to look towards a new solution.
ZenGRC is a compliance and risk management platform that gives you a clear and comprehensive view of your entire company’s risk landscape. This innovative software provides your company with a single source of truth: one centralized location where all of your risks, controls, and assignments can be organized and shared with ease. Schedule a demo today to learn how ZenGRC can help you create a successful IT risk management program at your company.