Murphy has two laws, and both apply to IT risk management. “Anything that can go wrong will go wrong” is Murphy’s first law, which is considered accurate because, given enough time, there is a high probability that something will go wrong.
You must be prepared for anything! Murphy’s second law states that “nothing is as easy as it seems, ” which is also true when managing business risk.
These are why companies turn to a Managed Service Provider (MSP) to help them identify, assess, prioritize, and remediate risks.
If you’re an MSP, read on to find out how you can help your customers mitigate risk and ensure their systems and data are protected.
What is an IT risk?
IT risk is the potential for loss or damage when a threat exploits a vulnerability in an organization’s information resources, including IT infrastructure, applications, and data.
It is a broad term that covers any risk, be it a cybersecurity risk, power outage, disaster, human error, software/hardware failure, etc., anything that can disrupt a business and depends on Information Technology (IT) in some way.
What is IT risk management?
IT risk management analyses a threat to a company’s IT infrastructure by assessing the level of risk that a company is willing to accept.
The industry refers to this as a “risk appetite.” If the company cannot take a specific risk, it must determine if and how the risk can be reduced.
Here are some examples of risk scenarios and the risk appetite a company is willing to take:
- A company’s email communication will be down for 24 hours in a natural disaster. The company accepts this level of risk because the impact on the business is minimal, and tragedies occur infrequently.
- In the event of an asteroid impact, the company’s offices and buildings will be destroyed. The company accepts this level of risk because the probability of an asteroid impact is unlikely, even if the results are catastrophic.
- If a business experiences a ransomware attack, it can bring down IT operations for an indefinite period. This type of event is common and can devastate a company, and the company does not accept this level of risk.
Risk management only sometimes reduces risk to zero but minimizes risk when the impact is significant.
Why is IT risk management important?
A business must understand and assess its risks to understand its weaknesses, determine if it is overexposed, prioritize gaps, and mitigate risk.
If overexposed, a company must act based on available resources and risk priorities, which are determined using the risk calculation discussed below.
The process of identifying an IT risk management
The IT risk management process is a task that a company can perform internally using the four-step process discussed below or an external risk assessment, such as ISO 27005.
This international standard describes how to perform an IT risk management process. Information security risk assessment by the requirements of ISO 27001.
These are the four steps that a company must follow to identify IT risk management.
- Identify vulnerabilities. The IT department must define all possible weaknesses and risks in the IT infrastructure.
- Label and classify organization data. This is a critical step because a business can only protect data if it knows what data to protect. This step allows the company to identify personal and sensitive data, the most crucial data to secure and protect.
- Prioritize vulnerabilities. This task should be done in a joint meeting with the Line of Business (LOB), which can identify critical systems that need to be up and running, and the IT department, which can determine if essential services are up and running. Protected. During this step, IT and LOB will also:
- Risk analysis determines the frequency with which an event will occur, the probability of its occurrence, and the consequences.
- Risks evaluation. The “formula” to calculate risk is Risk = threat x vulnerability x consequence. This is not a mathematical formula but should be used as a guide.
Here are some examples of how to assess risk using the “formula”.
Suppose a company does not back up its systems. In that case, the probability that human error, a natural or artificial disaster, or a malicious attack will cause its plans to go down is high, and the consequences of data loss are significant. This vulnerability would be high risk and would require immediate remediation.
The company recognizes that spam email advertisements can be a nuisance to users. While this is common, the impact is insignificant and would be considered a second priority for remediation.
On the other hand, the company acknowledges that phishing attacks can steal a user’s password. This is a common occurrence, and the impact can be significant,
- Address the risks. Now that the business knows the risks, it must address them based on prioritization, risk appetite, and tolerance. 5. Continuously monitor risks. Identifying an IT risk is an ongoing process, as the security landscape is constantly changing due to external and internal forces.
Best practices for managing IT risks
It is critical for a business to continually monitor its infrastructure, including its supply chain and cloud-based applications, for new risks. For example, there was a low risk of data leaks and breaches for remote workers before the pandemic.
However, data security is precarious with the massive migration to remote work in 2020, as most employees work from home.
This means a greater chance of laptops being lost, unattended laptops in the home being accessed by someone else (increasing the risk of malware), etc.
The pandemic has also created more risk as cybercriminals exploit the fear of COVID-19 to spread malware.
The company must monitor the risks associated with suppliers, partners, any individual (for example, contractors), or any other company with which it works.
For example, the SolarWinds breach occurred because criminals hacked into the Orion software system and added malicious code.
That malware (early launch anti malware) spread to SolarWinds’ 18,000 customers when the company shipped system updates. It was a catastrophic event that put many organizations at high risk.
Any business subject to regulatory requirements, such as the EU General Data Protection Regulation (GDPR), California Consumer Privacy Act (CCPA), Security Standard Payment Card Industry Data Protection (PCI DSS), the Health Insurance Portability and Accountability Act (HIPAA), or ISO 27001, you must also continuously monitor compliance with the regulations and company compliance.