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What is IT Risk Management?

M. Lupica
M. Lupica

Just about every business in the digital era relies on information technology (IT) systems to run essential elements of their operation, which makes IT risk management an important part of their everyday procedures. IT risk management is a component of the company’s overall IT security that helps the company identify the various problems that might arise regarding security of the information digitally stored within their systems. It is a process that involves identifying, assessing, and taking steps to reduce risk to a reasonable level.

Very industry employs IT risk management. It is an appropriate and useful process for any business that stores sensitive information electronically. Whether it is something as simple as a client list or something more important such as information regarding a trade secret or patent information, there is a material risk of security breach or damage to the information in a way that can severely harm the company. IT risk management is designed to efficiently mitigate that risk. It usually follows three main steps.

Man holding computer
Man holding computer

In the first step, an evaluation of the system that is currently in place is conducted. By making a comprehensive evaluation, the person making the assessment will be better equipped to identify possible threats and the most efficient ways to protect from those threats. This is arguably the most important step in the process as every other step stems from the knowledge gained from this evaluation.

The second step is to identify any possible threats. In order to properly identify each threat, the potential source, method, as well as its motivation must be noted. They could be natural threats such as floods and earthquakes; human threats, including both malicious and unintentional acts that could threaten the integrity of the data; and environmental threats such as long term power failure. By noting both the potential sources and motivations, the data may be protected from all angles.

From here, the company can assess the current security systems in place and determine where the inadequacies lie. This can be done through testing — simulating the potential threats and observing how the system reacts, for example. After a few rounds of comprehensive testing, a report should be drawn up detailing the weaknesses in the IT system that need to be addressed, including both the urgency and costs to fix the weakness. At this point it is a matter of the members of the company with the powers of the purse to assess the risk in the report developed by the IT risk management team and decide which improvements they want to implement. Once they conduct this cost-benefit analysis and come up with a plan, the IT risk management team can finish their job by implementing the requested changes.

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