Risk Management Strategies for IT Systems
January 26, 2015 Leave a comment
Risk management has been around for a long time. Financial managers run risk assessments for nearly all business models, and the idea of risk carries nearly as many definitions as the Internet. However, for IT managers and IT professionals, risk management still frequently takes a far lower priority that other operations and support activities.
For IT managers a good, simple definition for RISK may be from the Open FAIR model which states:
“Risk is defined as the probable frequency and magnitude of future loss” (Open FAIR)
Risk management should follow a structured process acknowledging many aspects of the IT operations process, with special considerations for security and systems availability.
Frameworks, such as Open FAIR, distill risk into a structure of probabilities, frequencies, and values. Each critical system or process is considered independently, with a probability of disruption or loss event paired with a probable value.
It would not be uncommon for an organization to perform numerous risk assessments based on critical systems, identifying and correcting shortfalls as needed to mitigate the probability or magnitude of a potential event or loss. Much like other frameworks used in the enterprise architecture process / framework, service delivery (such as ITIL), or governance, the objective is to produce a structured risk assessment and analysis approach, without becoming overwhelming.
IT risk management has been neglected in many organizations, possibly due to the rapid evolution of IT systems, including cloud computing and implementation of broadband networks. When service disruptions occur, or security events occur, those organizations find themselves either unprepared for dealing with the loss magnitude of the disruptions, and a lack of preparation or mitigation for disasters may result in the organization never fully recovering from the event.
Fortunately processes and frameworks guiding a risk management process are becoming far more mature, and attainable by nearly all organizations. The Open Group’s Open FAIR standard and taxonomy provide a very robust framework, as does ISACA’s Cobit 5 Risk guidance.
In addition, the US Government’s National Institute of Standards and Technology (NIST) provides open risk assessment and management guidance for both government and non-government users within the NIST Special Publication Series, including SP 800-30 (Risk Assessment), SP 800-37 (System Risk Management Framework), and SP 800-39 (Enterprise-Wide Risk Management).
ENISA also publishes a risk management process which is compliant with the ISO 13335 standard, and builds on ISO 27005..
What is the objective of going through the risk assessment and analysis process? Of course it is to build mitigation controls, or build resistance to potential disruptions, threats, and events that would result in a loss to the company, or other direct and secondary stakeholders.
However, many organizations, particularly small to medium enterprises, either do not believe they have the resources to go through risk assessments, have no formal governance process, no formal security management process, or simply believe spending the time on activities which do not directly support rapid growth and development of the company continue to be at risk.
As managers, leaders, investors, and customers we have an obligation to ensure our own internal risk is assessed and understood, as well as from the viewpoint of customers or consumers that our suppliers and vendors are following formal risk management processes. In a fast, agile, global, and unforgiving market, the alternative is not pretty.