Risk Management in a Wired World

Cyberattacks are increasing at an alarming rate, with billions of people worldwide affected by them. Numerous studies indicate that the direct operational disruptions and financial damages of these attacks could reach $10.5 trillion by the end of 2025. This monumental number underscores the importance of taking the necessary steps to implement effective risk management controls, thereby protecting operations and the financial bottom line. 

Risk management in any business is crucial to maintaining safe, reliable, and uninterrupted operations for both employees and customers. Because each business is unique in its operations and workforce structure, it is vital to invest in high-quality enterprise risk management software specifically tailored to meet and maintain your company’s needs. 

What is Technology Risk Management?

Technology Risk Management (TRM) is a process that companies worldwide use to identify, assess, mitigate, and monitor various IT-related risks, including system failures, data breaches, cybersecurity threats, and compliance violations. 

TRM is designed to prevent or reduce the harmful effects these risks can have on business operations, business reputation, and financial performance. 

Types of Risk

Modern businesses rely on cloud computing for its scalability and cost-efficiency. However,  a common issue that many companies encounter includes data loss and misconfiguration. One of the most prominent examples of this risk is Microsoft Azure, which caused widespread disruptions for its customers using its cloud service due to a Distributed Denial-of-Service (DDoS) attack.

Companies often struggle to identify and contain security incidents in real-time. This typically results in a late data breach response, which can cause sensitive information to become unprotected and exposed, leading to long-term reputational damage, expensive compensation claims, and legal action. 

For businesses that rely on third-party suppliers and service providers, additional risks beyond their control must be considered and assessed. In 2020, software provider SolarWinds was targeted by hackers, resulting in severe disruptions to its clients, including numerous government agencies around the world. This serious breach crippled supply chains, making it difficult for many to recover properly. 

Thanks to the global COVID-19 pandemic, many full-time employees transitioned to remote and hybrid work arrangements to ensure operational continuity during periods of strict shutdown policies. During this period, many global companies reported a noticeable increase in phishing attacks targeting their employees, attacks that were often exploiting home networks that lacked the same level of security as those in the corporate office. 

Finally, companies are vulnerable to natural disasters, unexpected system failures, and power outages that can disrupt their operations for an extended period. With weather events on the rise and today’s always-on world, these failures can bring essential e-commerce platforms and operations to a grinding halt. 

Managing Risk

Companies across the world are facing increasing challenges due to the speed at which the digital landscape is changing and evolving. However, following a structured and well-maintained framework for managing technology-related risks allows businesses to protect their operations, assets, and reputation. 

Identify

It is vital to stay proactive when addressing any potential risks within your business operations to prevent them from materializing or developing into something more serious. This is made easier to achieve by correctly understanding and recognizing the risks present in the company’s tech systems, processes, and applications. 

This can be achieved by regularly updating the online inventory to include all tech assets, maintaining frequent communication with IT and security personnel about any vulnerabilities or warnings they may identify, and inspecting IT systems, applications, and networks using a comprehensive digital checklist. 

Assess & Prioritize

Once risks have been identified, it is crucial to properly evaluate the likelihood and potential impact of each individual risk to prioritize your approach strategies more effectively and allocate the necessary resources. 

Leverage the environment in which the risk exists and additional data analytics against each other to qualify and quantify each issue more fairly. 

Develop Strategies

Mitigate the risk of vulnerabilities being exploited by developing proactive action plans to minimize or eliminate risks. Alongside creating possible solutions and detailing the necessary resources required to implement them, it is crucial to employ three additional strategies. 

Firstly, regular and specialized cybersecurity training must be provided to employees to ensure they can recognize suspicious activities and follow the proper security protocols as needed. A step-by-step guide for reporting and addressing any incident that arises must be created. This guide should specify the personnel responsible for specific tasks so the entire workforce is aware of who to communicate and collaborate with. 

Finally, ensure your software solutions are regularly updated, any vulnerabilities are immediately patched, and legacy systems are replaced. This process can be a costly investment, so if your budget doesn’t allow for a comprehensive digital upgrade all at once, identify the most critical upgrades first. 

Implement Controls

Once you have developed your strategies, it is time to deploy measures to protect vulnerable systems, deter threats, and respond to any issues effectively and efficiently. A zero-trust approach should be implemented, shifting your operations to continuous verification instead of assuming that devices, users, and network connections are trustworthy. 

This can be achieved by installing antivirus software, setting up the necessary firewalls, encrypting sensitive data, and limiting access to this information. Additionally, utilizing Multi-Factor Authentication (MFA) and Role-Based Permissions (RBP) can enhance security. Furthermore, monitoring operations with intrusion detection systems is crucial for maintaining security.