The Ins and Outs of IT

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IT risk assessment involves identifying, analyzing, and evaluating IT risks so they can be managed and monitored. This process is crucial for organizations that depend on technology and information systems. By conducting comprehensive IT risk assessments, organizations can pinpoint vulnerabilities, threats, and potential impacts to their systems and data. This empowers them to put in place controls and safeguards to minimize risks to an acceptable level.

Effective IT risk assessment provides many benefits, including:

  • Protecting critical systems, infrastructure, and information assets
  • Reducing the likelihood of security breaches and cyber attacks
  • Minimizing business disruption and financial losses from IT failures
  • Demonstrating due diligence and compliance with regulations
  • Enabling better informed IT investment and strategy decisions

This article gives an overview of IT risk assessment. It covers the types of IT risks, the risk assessment process, quantitative versus qualitative techniques, risk analysis methods, evaluating risk, risk treatment, and continuous risk monitoring. It also looks at commonly used IT risk assessment tools and frameworks. With a good understanding of IT risk assessment best practices, organizations can create a proactive and consistent method for identifying and managing IT-related risks.

Types of IT Risks

Information technology systems face many different risks that can affect the confidentiality, integrity, and availability of data and systems. Some important types of IT risks include:

  • Data breaches: Unauthorized access and theft of sensitive data is a major risk. Breaches can occur due to hacking, malware, unsecured systems, or improper access controls. Preventing breaches requires strong cybersecurity defenses, access controls, encryption, and security protocols.
  • System downtime: IT systems going offline can severely disrupt operations and productivity. Downtime can be caused by cyber attacks, power outages, software failures, or other technical problems. High availability and redundancy of systems is key to minimizing downtime.
  • Compliance failures: Not meeting regulatory compliance exposes the organization to fines, lawsuits, and reputation damage. IT must implement controls to comply with regulations like HIPAA, PCI DSS, and GDPR. Regular audits help identify and address gaps.
  • Insider threats: Employees, contractors, or partners abusing access privileges to steal data or sabotage systems. Monitoring systems for suspicious activity and limiting access helps mitigate insider threats. Proper processes must be in place for onboarding and offboarding users.

Risk Assessment Process

An IT risk assessment process involves finding the important things the organization has and what could go wrong with them, looking at potential dangers and how they could affect the business, and deciding what to do about it based on how much risk the organization can handle. The main steps include:

Identification of Assets – Create a complete list of IT systems, data, hardware, software, facilities, people, and other assets. Record who owns them, what they’re used for, how they’re connected, and their importance to the business.

Analysis of Threats – Investigate potential threats such as attacks, accidental data leaks, system failures, and disasters. Consider where the threats might come from, what they’re capable of, why they might occur, and how often they might happen.

Assessment of Vulnerabilities – Evaluate the assets and controls to find out how likely they are to be affected by the identified threats. This means looking at things like design flaws, bugs, configuration problems, and access controls. It’s important to check for vulnerabilities both inside and outside the organization.

Analysis of Potential Impact – Estimate the possible effects on the business if the threats take advantage of the vulnerabilities. This includes things like how long systems might be down, the possible loss of data, the cost of recovery, damage to the company’s reputation, and fines for not following regulations. Try to measure these impacts in terms of money, day-to-day business, and reputation.

Understanding the organization’s assets, threats, vulnerabilities, and potential impacts through risk assessment helps make well-informed decisions about how to prioritize and apply protective measures to handle IT risks. The assessment gives you the information you need to compare different ways of dealing with risks, considering the costs and benefits. Doing regular assessments also helps keep track of any changes in the IT risk situation over time.

Quantitative vs Qualitative

Risk assessments can take a quantitative or qualitative approach.

Quantitative risk assessments use numbers and metrics to evaluate risks. The goal is to measure potential losses from threats. Numeric values are assigned to the probability and impact of risks to calculate an overall risk score. This helps prioritize and compare different risks in a data-driven way. Techniques used in quantitative assessments include:

  • Annualized Loss Expectancy (ALE) – Calculates the estimated loss from a risk over a one-year period.
  • Annualized Rate of Occurrence (ARO) – Estimates how often a risk event occurs per year.
  • Exposure Factor (EF) – Estimates percentage of assets exposed to the risk.
  • Single Loss Expectancy (SLE) – Potential loss from a single occurrence of the risk.

Quantitative methods help prioritize risks based on calculated risk scores, but they depend on having strong data to measure probabilities and impacts.

Qualitative risk assessments use descriptions to evaluate how likely and how much of an impact risks might have. Instead of using numbers, qualitative assessments describe risks in different situations to understand how likely they are and what the impact might be. These assessments often use scales like low/medium/high or 1-5. Experts use their judgment to evaluate each risk using these descriptions. Qualitative assessments don’t give specific risk scores, but rather describe the risks. Techniques used in qualitative assessments include:

  • Risk Probability and Impact Assessment – Experts estimate probability and impact levels for identified risks.
  • Risk Urgency Assessment – Experts evaluate urgency of addressing each risk.
  • Risk Mapping – Position risks on a map plotting probability vs. impact.

The flexibility of qualitative methods allows analyzing risks without using numbers for threat events. But the results can be influenced by the opinions of experts.

Risk Analysis Techniques

There are several techniques that can be used to analyze IT risks:

Brainstorming

Brainstorming is when a group of experts work together to come up with ideas about possible threats, vulnerabilities, and impacts. The goal is to create a comprehensive list of risks that can be further examined. Brainstorming helps people think creatively and tap into the group’s collective knowledge.

Questionnaires

Questionnaires with pre-defined questions can be given to different groups of people. This helps find risks based on what individuals in the organization know and have experienced. Good questionnaires can find risks that might have been missed.

Loss event data analysis

This technique involves looking at real data from past events, both within the organization and from outside sources. Understanding the causes, failures, frequencies, and impacts of past events allows us to predict potential future risks. This data-driven analysis reveals patterns and trends.

By using a combination of these techniques, organizations can identify IT risks in a structured and thorough way from different perspectives. The results of the risk analysis include a list of risks with ratings for how likely they are and estimates of their impact. This helps with evaluating risks and deciding which ones to deal with first.

Risk Evaluation

Once we know what the risks are, we need to evaluate them to see which ones need to be dealt with first. This means comparing the level of risk we found with the standards we set. We check if the risk is acceptable or if it’s too high. The amount of risk an organization is okay with is called risk appetite. Risk tolerance gives more detailed guidance on the acceptable level of risk.

We usually prioritize the risks from highest to lowest to see which ones need attention first. The aim is to find the risks that pose the biggest threat so we can treat them and make the risk acceptable. We consider how likely the risk is and what impact it could have to rate the risk. We can use simple ratings like high, medium, and low, or use numbers to calculate the ratings.

By evaluating risks in relation to the organization’s risk appetite and prioritizing them, we can focus on the most serious risks. This way, we allocate our resources in the best way to manage the risks.

Risk Treatment

Once you know what the risks are, the next thing to do is figure out how to deal with them. There are four main ways to handle risks.

Risk Avoidance

Risk avoidance means getting rid of the risk completely by stopping the activity that caused it. For instance, a company might avoid a security risk by not using an outdated system anymore. Although risk avoidance ensures that the risk won’t happen, it also means giving up any potential benefits of the risky activity.

Risk Mitigation

With risk mitigation, the organization takes action to reduce the chance or impact of the risk. For IT risks, common ways to mitigate include patches, encryption, access controls, training, and backups. Mitigation lowers risk exposure but doesn’t remove the risk.

Risk Acceptance

If the chance of risk and its effects are quite low, the organization can agree to the risk. They don’t need to do anything besides keeping an eye on it. Agreeing to the risk might be the best choice if it’s not possible or affordable to reduce it.

Risk Transference

Risk transference means passing the risk to someone else, like through insurance or outsourcing. For instance, cyber insurance moves some financial risk. Although transference can lower the impact, the original risk still exists.

Managing risk properly weighs the costs and benefits of these choices. The aim is to reduce risk to an acceptable level based on the organization’s risk tolerance.

Continuous Monitoring

Risk assessment should be done regularly, not just once. The IT environment and threats are always changing, so it’s important to keep assessing risks. Organizations should plan to do risk assessments on a set schedule, like every year or every few months. They can change how they do the assessments and what they look at based on past results, IT changes, and new threats.

It’s also important to keep an eye out for new risks between scheduled assessments. You can do this by keeping up with threat intelligence, watching IT activities, making sure you’re following rules, and using information from audits and incident responses. You can set up key risk indicators to keep an eye on ongoing risk levels. If these indicators show that there’s a big risk, it might be time to update or redo the risk assessment.

The idea of continuous monitoring is to make sure risk assessments stay current. By doing assessments regularly and adapting to changes, organizations can handle their changing IT risks well over time.

Risk Assessment Tools

There are many tools to help with IT risk assessment. They can be divided into two main categories.

Open Source Tools

  • OpenVAS – OpenVAS is an open source vulnerability scanner that is maintained by Greenbone Networks. It can scan systems for known vulnerabilities and provide reports on potential risks. OpenVAS is regularly updated and has an active community supporting it.
  • Dradis – Dradis is an open source framework for collaboration on IT security assessments. It provides a centralized repository for info sec teams to store and track findings from pentests, audits, and vulnerability scans. Dradis helps to consolidate risk data across tools.
  • MITRE ATT&CK Framework – The MITRE ATT&CK framework is an open knowledge base of adversary tactics and techniques based on real-world observations. IT risk analysts can leverage this framework to better understand threats and plan assessments accordingly. The framework covers 12 tactic categories including initial access, execution, persistence, privilege escalation, and more.

Commercial Tools

  • Risk Management Solutions (RMS) – RMS provides integrated risk assessment software for organizations. It includes modules for identifying assets, threats, and vulnerabilities. RMS quantifies risks and enables customized reports. It also provides third-party data on emerging threats.
  • ServiceNow Risk Management – Part of the ServiceNow platform, this tool automates the risk management process. Key features include risk register management, assessment surveys, risk analysis based on impact and likelihood, risk treatment tracking, and reporting. It integrates with other ServiceNow modules.
  • Galvanize – Galvanize offers an integrated risk management software suite covering IT risk assessments along with audit management, policy management, and more. Key features include automated control testing, risk scoring, workflow management, and analytics. It provides pre-built tests mapped to common risk standards.

Conclusion

IT risk assessment is really important. It helps to find, study, and deal with risks that could harm an organization’s IT infrastructure and systems. There are different types of IT risks, like security threats and natural disasters. Doing risk assessments regularly helps organizations see how much risk they have and decide how to handle it.

Some key points to remember about IT risk assessment:

  • IT risks are constantly evolving, so assessments should be performed periodically to detect new threats. Annual assessments are common but high-risk environments may require more frequent reviews.
  • Both quantitative and qualitative techniques are useful for risk analysis. Quantitative methods analyze measurable data like frequencies and potential losses. Qualitative techniques evaluate risk based on subjective factors like complexity and organizational priorities.
  • Effective risk assessment involves identification, estimation, evaluation and treatment. Identifying risks is the first step, then estimating likelihood and potential impact. Risks are then evaluated against criteria to determine severity. Finally, appropriate treatment options are selected to mitigate unacceptable risks.
  • There are many risk assessment tools and methodologies available to suit different environments. It is important to choose tools aligned with organizational needs and capabilities.
  • Risk assessment results should feed into an IT risk register and be integrated into wider business continuity and disaster recovery planning.

Regular IT risk assessments help organizations identify and address threats before they cause problems. Assessing risk exposure helps with decision making and resource allocation. Overall, managing risk is crucial for information security and stability. Conducting regular risk assessments provides ongoing awareness and assurance for organizations that depend on IT systems and infrastructure.