Today, enterprise management is demanding its IT organization to provide improved strategic value, execute sustainable initiatives and make use of leading edge technologies, in order for IT to become a core component contributing to the efficiency and profitability of the organization. However IT organizations are being challenged to find time, resources, and budget to achieve these goals, while bearing the responsibility of day to day operation of existing legacy infrastructure and applications, and maintaining service level to its user base. In addition, many IT organizations lack the resources, expertise and budget needed to embrace newer technologies and solutions.
POWERNET's consultants carry tremendous amount of experience and expertise in IT Risk Management practices. We gained our experience working with a wide range of client-base in varying industries. We are subject matter experts in Risk Management Framework (RMF) and approach to IT Management & Operations. Our consulting team can provide strategic risk management consulting to your Executive Team to audit, asses, and revamp your IT operations leveraging today’s tools, methodologies and best practices.
Do you know your organization's level of risk? If not, your institution could be at increased risk for cyber attacks and scrutiny from examiners. Cyber security risk has become one of the top threats for companies of all sizes. And if you aren’t proactively managing your risk, you’re leaving the door open to hackers, which could result in regulatory enforcement actions and fines, as well as damage to your organization’s reputation.
WHAT IS RISK MANAGEMENT?
"Risk management is the process of identifying, assessing and controlling threats to an organization's infrastructure, individuals, capital and earnings." These threats, or risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents and natural disasters. IT security threats and data-related risks, and the risk management strategies to alleviate them, have become a top priority for digitized companies. As a result, a risk management plan increasingly includes companies' processes for identifying and controlling threats to its digital assets, including proprietary corporate data, a customer's personally identifiable information and intellectual property.
In laymen terms, risk management is about anticipating what bad things might happen to your assets, then mitigating the impact of those bad things, or reducing the likelihood that those bad things will happen. In the information security context, we are primarily concerned with assuring the confidentiality, integrity, and availability of sensitive, personal and business data. We’ll further address the process of doing this later.
Risk management standards have been developed by several organizations, including the National Institute of Standards and Technology and the ISO. These standards are designed to help organizations identify specific threats, assess unique vulnerabilities to determine their risk, identify ways to reduce these risks and then implement risk reduction efforts according to organizational strategy.
RISK MANAGEMENT STRATEGIES & PROCESSES
All risk management plans follow the same steps that combine to make up the overall risk management process:
- Risk identification.The company identifies and defines potential risks that may negatively influence a specific company process or project.
- Risk analysis.Once specific types of risk are identified, the company then determines the odds of it occurring, as well as its consequences. The goal of the analysis is to further understand each specific instance of risk, and how it could influence the company's projects and objectives.
- Risk assessment and evaluation.The risk is then further evaluated after determining the risk's overall likelihood of occurrence combined with its overall consequence.The company can then make decisions on whether the risk is acceptable and whether the company is willing to take it on based on its risk appetite.
- Risk mitigation. During this step, companies assess their highest-ranked risks and develop a plan to alleviate them using specific risk controls. These plans include risk mitigation processes, risk prevention tactics and contingency plans in the event the risk comes to fruition.
- Risk monitoring. Part of the mitigation plan includes following up on both the risks and the overall plan to continuously monitor and track new and existing risks. The overall risk management process should also be reviewed and updated accordingly.
RISK MANAGEMENT APPROACHES
After the company's specific risks are identified and the risk management process has been implemented, there are several different strategies companies can take in regard to different types of risk:
- Risk avoidance. While the complete elimination of all risk is rarely possible, a risk avoidance strategy is designed to deflect as many threats as possible in order to avoid the costly and disruptive consequences of a damaging event.
- Risk reduction. Companies are sometimes able to reduce the amount of effect certain risks can have on company processes. This is achieved by adjusting certain aspects of an overall project plan or company process, or by reducing its scope.
- Risk sharing. Sometimes, the consequences of a risk is shared, or distributed among several of the project's participants or business departments. The risk could also be shared with a third party, such as a vendor or business partner.
- Risk retaining. Sometimes, companies decide a risk is worth it from a business standpoint, and decide to retain the risk and deal with any potential fallout. Companies will often retain a certain level of risk a project's anticipated profit is greater than the costs of its potential risk.
CHIEF RISK OFFICER(CRO)
POWERNET can be your Chief Risk Officer (CRO), where we act in the position as the corporate executive tasked with assessing and mitigating significant competitive, regulatory and technological threats to an enterprise's capital and earnings. In addition to issues of compliance, CROs are typically concerned with issues such as insurance, IT security, financial auditing, internal auditing, global business variables, fraud prevention and other internal corporate investigations.
You will often hear the term risk assessment used interchangeably with risk management. However, risk assessment should be thought of as a “piece” of risk management, albeit a very important one. Risk assessment is the analysis that takes place in order to make risk management decisions. More specifically, it is the process in which an organization identifies its information and technology assets and determines the negative impact that threats have to specific assets, what’s currently being done (current controls) to mitigate the impact or likelihood of an occurrence, and what else could be done to further effectively mitigate the impact or likelihood of an occurrence.
Risk management also includes the prioritization and application of prescribed controls, monitoring the effectiveness of these controls, and ensuring that additional risk assessment is performed as the assets and the threat landscape change. It’s important to note that there are numerous standards and models for risk management and assessment. Some of the more common standards or models include the National Institute of Standards and Technology (NIST) Risk Management Framework (RMF) supporting the Federal Information Security Management Act (FISMA), and the International Standards Organization (ISO) 31000 series, addressing risk management standards.