IT risk management roles such as IT service management and IT asset management are two of the top tech jobs that budding developers and computing experts are all flocking towards. Risk management is one of the most important and necessary processes in IT companies, without which their data and services are all exposed to multiple variants of risk that can cause reputational damage, operational failure, and massive data loss. There is an average number of 130 cyber-security breaches every year, and organizations are pouring more money every year into risk management.
Companies do not need to simply protect their own data, but also the data of their clients, customers, and affiliates too. This is a very sensitive subject where any data leak or information breach can immediately cost a well-established IT company millions alongside losing the trust of the end-users and their customers. Even a minor service disruption can incur massive losses and customers (or users) leaving the services or product. Risk management is one of the most valuable and important complementary processes that are assigned to IT processes, tech-development processes, and data-backed projects.
What is risk management in IT?
Risk management can be defined as identifying and evaluating risks in order to monitor and minimize risks. IT companies too have the same requirement to protect their data, projects, and processes. IT risk management can be referred to as a crucial management procedure that allows IT companies to protect their information and also deal with the consequences of a breach or system/technical failure. Not just that, risk management also ensures that the data is backed up and can be restored in case of data losses or crashes. Risk management also allows IT companies to prioritize risks by categorizing them by the nature of their effects on services, data or processes. The risk management departments help IT corporations in controlling the impact of misfortunate events or in the case of abnormalities. It is best to discover vulnerabilities and areas where security might be compromised before an attack, therefore removing the need to spend millions to resolve the consequences of a potential attack.
The average ransom payment for cyber-crime during the second quarter of 2020 had reached an enormous amount of $178,254. This is a huge amount when we calculate the number of companies that are affected every year and also the huge number of small IT firms who incur these losses as well. For instance, the average cost incurred to companies due to a malware attack is $2.4 million, and it takes about 50 days for resolving an internal breach. This expenditure of time, resources, and money is something every company wishes to avoid, no matter how big or small. This is exactly why risk management is crucial for IT companies.
Risk management personnel specialize in applying a company’s current resources to reduce the detrimental effects as much as possible or even completely avoid them. Aberrations, cyber-attacks, technical fluctuations, data loss, server crash, system failures, operational failure, and many other technical or external factors can cause massive losses to IT companies, so it is in their best interest commission risk management specialists to keep multiple factors in check while providing solutions or strategies to help control the scale of damage. An advanced IT Infrastructure Library (ITIL) course or an ITIL Foundation course is highly recommended for individuals who wish to become an IT risk management or IT asset management specialist.
Risk management strategies
Let us look at some effective risk management strategies that companies, both large and small, utilize in order to avoid system degradation, data breaches, and successful cyber-attacks.
● Avoiding the risks
This strategy focuses on avoiding the risks at all costs using the resources at hand. This strategy follows the idea that if the risk can be avoided, then the IT process or data is safe. There are multiple downsides to this as it also avoids discovering the actual culprits behind this or the actual damage that will be done if in case the risk ever occurs in the future again.
● Transferring the risks
This strategy involves transferring the risk over to other dummy entities, company members or insurance policies. IT companies can also outsource the risk, thus evading the need to be completely responsible for the damage that is incurred.
● Reducing the risks
This strategy is applied to assist in reducing the impact of the risks as much as possible. There are multiple frameworks in this strategy that mitigates the total damage or loss so that the IT companies need to bear the least amount of expenses. This is a strategy that involves multiple factors in its methodologies to curb the adverse effects as much as possible and from every possible angle.
● Accepting the risk
This strategy concentrates on simply discovering risks and accepting that they exist. By accepting the risk completely, companies can then focus on how to control the damages and how to deal with the risk itself. This strategy is generally used when the risk is unavoidable but can be controlled during the worst-case scenarios. This strategy is more determined to identify when the risks will occur and how to immediately deal with them.
Other than these risk management strategies that IT companies can use, there are a few measures that companies can take to ensure the safety of their data and processes.
- Discovering or identifying risks
- Analyzing risks and assessing the determinants
- Evaluating the risks and prioritizing them
- Responding to the risks in the most effective and efficient ways
- Monitoring the risks and reviewing them conscientiously
IT risk management is very important and major IT companies put a lot of importance on this sector. Loss of data or being vulnerable to attacks places companies in a bad position, where they are required to justify their security measures and they lose their goodwill. These events can even affect the stock price or market value of an IT firm. Thus, risk management is crucial for IT processes and data integrity.