IT Risk Management

IT risk management is a vital part of running any type of enterprise in the modern world. Understanding all aspects of IT risk helps businesses to reduce costs, achieve improved compliance, and to increase network security. Managing risks associated with the adoption of IT within a business involves several steps, including identifying, analyzing, planning actions, tracking, controlling, and communicating IT risks. Each step is invaluable in preparing for potential risks and efficiently dealing with present risks. With a detailed plan in place, businesses can clearly identify vulnerabilities to its information resources and determine what countermeasures need to be taken to reduce the likelihood of risks to an acceptable level.
What is an IT Risk?

IT risk is a broad category that is defined as any threat to or vulnerability in a company's information technology, critical systems, data, and business processes. Identifying these threats and vulnerabilities, and responding to them as proficiently as possible is one of the most essential roles that business managers must carry out. It is essential for risk managers to reduce the time cycle necessary between identifying potential risks and creating an effective response plan for IT risks. Budget constraints do not allow managers to identify and respond to all risks. This is why it is so important to quantify all known risks in order to create the most cost-effective IT risk management plan while leaving room for some amount of residual risk.

Essential Steps: Identify, Analyze, Plan, Track, Control, Communicate

Identify

It is imperative to surface IT risks before they cause problems. Therefore, identifying risks is the first step in IT risk management. Project managers and personnel can use a systematic process to identify risks to assets (i.e. software, hardware, etc.). It is also important to identify existing security measures, future security measures, potential threats, consequences of not addressing vulnerabilities, and any other related business processes.

Analyze

After IT risks are identified, the next step is to analyze risk data and convert this data into information that can be used to address the most critical risks. For example, qualitative and quantitative methods can be used to assess risks in information security. Quantitative risk assessments involve mathematical calculations that are based on the security metrics of an application, system, or other asset. Various risk factors for a single type of asset are considered so that a single loss expectancy (SLE) can be calculated. Next, the probability of this risk becoming a reality within a certain time frame (usually a year) is calculated.

Plan

Next, a plan must be created for converting information about the most critical risks into concrete decisions and actions. The planning process begins with creating an action plan that addresses each individual risk. This is followed by prioritizing these actions and then creating a comprehensive risk management plan. By creating a plan, the business is able to carefully mitigate risks by prioritizing, implementing, and maintaining controls.

Track

Tracking is the next important step. Tracking involves monitoring the status of each risk. In addition, the actions to mitigate risks, when necessary, are also tracked. This step is important in ensuring that solutions for managing IT risks are being performed and the status of how well risks are mitigated is recorded.

Control

If there are deviations from the planned risk actions, then risk controls become necessary to correct these deviations. For this step, project management processes must work to be in command of risk action plans, correct deviations from the plan, and improve risk management solutions in the process.

Communicate

Effective communication is necessary throughout the IT risk management procedure. It is the cornerstone of risk management success. All organizational levels must be included in clear communication about relevant aspects of risk management. Risk communication between the developer, user (customer), and all levels within the development project organization is vital to every single risk management activity. Communication should be considered the key that ties all risk management activities together into one cohesive and stronger process for the benefit of everyone involved.