This article provides an overview of IT Risk Management.
Risk is inherent in all organisational activities as there are elements of uncertainty in every process and activity executed. Risk can have a positive or a negative impact on an organisation – from a cost and benefit perspective. For organisations to grow and prosper they have to take risks to capitalise on new opportunities, thus, risk can represent organisation value. It is important for organisations to effectively manage risks to minimise their impact and help drive growth and opportunities. Risk management is an important process, which allows management to create a balance between the operational and protective measures in order to achieve the set goals and objectives of the organisation.
The IT function has many types of risks, which range from operational risks to external and internal threats that exploit system and asset vulnerabilities. As modern organisations pursue greater digital strategies, the threats and risks from cybersecurity increase significantly. In order for IT risk management to be effective and efficient it needs to be aligned with the organisational goals and objectives and ensure there are processes in place to help discover, assess, control and/or mitigate the risks. IT risk management does not only focus on the negative aspects of organisational risks, it also focuses on the benefits of enabling calculated risks associated with opportunities. Risks in most organisations are defined as a product of threats, vulnerabilities and the value of assets in the organisation. Therefore, it is incumbent on IT risk managers to ensure that they create a comprehensive framework to manage risks to reduce their chances of becoming issues. IT risk management is a complex phenomenon, which requires co-ordination and management of an array of activities to solve the prevailing risks and threats.
Most organisations have comprehensive enterprise risk management (ERM) frameworks deployed to ensure know risks are managed effectively and efficiently. Given the pervasive role of IT in most organisations it is crucial that IT risk management is part of the wider organisational ERM framework, which has two major components of risk appetite and risk sensitivity. Risk appetite in ERM focuses on the amount and type of risk that an organisation is willing to take in order to meet its strategic goals and objectives. Risk sensitivity is the ability to identify and mitigate risks as soon as they exhibit themselves.
There are a plethora of tools and software solutions that are implemented by organisations to assess and manage IT risks. These include vulnerability management tools, use of system and network penetration tests and frequent IT audits as a way of identifying and addressing IT risks and vulnerabilities. It is important for organisations to commit sufficient resources and capabilities to effectively detect and respond to IT risks in a timely and accurate manner. Implementing and managing an effective IT risk management program can be a complex and costly task as it encompasses the entire organisation and requires constant inputs from internal and external stakeholders.
The individual articles provide further drill down on the individual elements.
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