Risks in IT are described as a form of threat in context with data security, network transfer, system scheduled processes, critical applications, and business procedures. IT risk management is broadly defined as the process of managing IT risks, and must be executed on a regular basis. It is neither a product nor a purchase, but a policy of an organization implements to protect its business systems. Managing IT risk plays a vital role in administering any business in today's world. Irrespective of the business, deep knowledge of IT risk leads to increased data security, reduced business cost, and greater compliance. This chapter deals with methodologies to improve risk management in an IT organization, their impact, and some examples.
TopNtroduction
The basic concept of an information system is to support the objectives and mission of the organization. All organizations are exhibited to risks, many of which affect the organization in an obstructive manner. Risks are nothing but uncertainties about what will happen in the future. The more number of uncertainty leads to a higher number of risks. To support the organization, IT professionals should help management to perceive and manage these risks.
Managing risks is not an easy task. Completely mitigating all risk is impossible, due to threats, vulnerabilities, and limited resources, threats and vulnerabilities. Therefore, IT professionals should have a methodological approach to support them in allocating resources and articulating, together with technical and business managers, the possible outcomes of various IT-related threats to their objectives.
This methodological approach must be cost effective, accurate, and repeatable, and minimize risks to a justifiable and reasonable level. Risk management is not new. There are many approaches and techniques available for managing IT risks.
This chapter explores risk management with respect to information technology systems, and answers the following questions:
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What is risk in information technology systems?
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What is the importance of understanding risk?
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Why is monitoring risk processes crucial?
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What is risk management?
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How is risk managed efficiently?
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What are the risk management methodologies for improving IT risk management systems?
TopBackground
Risk
Risk refers to a prospective warning about a given situation that will incur losses, disrupt service, and lead to system failures such as defects, thereby provoke maltreat to the organization. Its future outcomes and consequences are uncertain by nature, and can be expressed in the form of its possibility of occurrence and the likelihood of consequences.
The impact of the risk is its ability to affect the goals of an organization. Risk cannot be avoided in every situation. It is available in human lives, organizations, and institutions, irrespective of their environments. Risks are acceptable to certain extents, depending upon those impacts and outcomes. Some are adverse by default, and some are neutral. Hence, in simple terms, risk is described as uncertainty of consequences.
Importance of Understanding Risk
Being aware of risk, and in particular of the specific uncertainties related to a system, would empower the system owner to safeguard assets such as information systems in proportion to their organizational value. All organizations have a restricted number of resources, so risk cannot be diminished to zero. Hence, understanding risk, especially the measure of risk, enables organizations to give most important consideration to the resources they lack.
Risk Process Monitor
Today, companies face different types of risks, based on operations, policies, safety, and technical issues. The biggest challenge for most companies is to establish a repeated process to identify, plan, analyze, and solve risk associated with business activities. It is highly challenging to run a business successfully in this competitive world. Added challenges arise in dealing with different cultures, people, and diverse regulatory frameworks. Organizations whose people think that managing IT risks is completely the job of the IT staff are in even more challenging situations.
Planning tasks to do when things go wrong is equally important to prevent it. Hence, it is important for the organization to understand the risk involved in processes, strategies, and business environments, to arrive at proactive actions that need to be done before any disaster occurs. This actually paves the way for the organization to turn crisis into opportunity. Failure to develop an IT risk management plan sets up the organization up for security breaches, disasters-in-the-making, and financial losses for management. Therefore, it is crucial for any organization to repeatedly monitor the risk process, to provide security in its business environment.