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To effectively evaluate and address risks, companies should follow the best strategies and practices such that the same risks never occur again.
Fremont, CA: As businesses rely on information technology (IT) systems, such as computers and networks for key business activities, they are increasingly exposed to different types of risks. IT touches upon every facet of the businesses and is subjected to risk. The general threats to IT systems and data include hardware and software failures, malware, viruses, spams, scams and phishing, and human threats. Diving deep into the dangers, there arise targeted criminal threats, including hackers, fraud, password theft, denial-of-service, and security breaches. There emerges a problem of finding the right people who follow the right strategy to address IT risk management. Because it deals with risk management methods, the CIOs and the IT project managers should adopt best practices and policies to manage the risks effectively.
The four critical components of IT risk management include
Risk identification – Evaluate the unique vulnerabilities and threats of the organization as prepare for risk demands, figuring out the root cause for the risk.
Risk measurement – After the identification of threat, analyze if the impact is big, small, or minimal.
Risk evaluation and ranking – During this process, evaluate the severity of risk based on their impact and make those risks a top priority.
Risk mitigation – At this stage, set out a plan to modify the risk to achieve tolerable risk levels.
Risk Monitoring and reviewing – Finally, track and monitor the risk regularly to avoid future threats.
IT Risk Management Strategies
Having a risk management strategy provides a structured approach to identifying, assessing, and managing risk while regularly updating and monitoring the assessment based on new developments or changes made.
Risk avoidance – It involves elimination strategy while preventing organizations from getting involved. Companies can apply safeguards to avoid risk outcomes and focus on resources.
Risk reduction – It is an optimization strategy as it implements small changes involving some processes, plan manipulation, and other possible methods to reduce the risk. This, in turn, will secure the company credentials from a severe loss.
Risk Sharing – It is an outsourcing strategy as it involves transferring the risk to multi parties that may be an outsourced entity or an insurance policy, thereby redistributing the burden of loss or gain.
Risk acceptance - It involves accepting the risk, whether it is loss or gain, to deal with the same whenever it occurs. The option is best for small risks, where the losses can be easily made up.
IT Risk Management Practices
Empower risk management – Risk identification should be the foremost thing to be preached and practiced in a project.
Maintain the risks in a single unit – The best practice is maintaining all the risks in one single register to handle them easily.
Treat threats and opportunities equally – Reduce the impact of threats to increase the chances of occurrence of opportunities.
Analyze and prioritize risks – Based on the information collected from the team or other stakeholders, identify its impact and thereby prioritize the risks.
Act appropriately to risks – Plan by having a brainstorming session to identify the best approach that suits the business requirements from the strategies above.
Involve stakeholders – Try to communicate the risks in a defined frequency to all stakeholders as they have a unique perspective and can provide insights into areas from where the risks might arise. At every stage of risk management, it is essential to get people to sign-off on the strategy involving stakeholders.
Thus a company should handle the risks by utilizing the strategies and practices mentioned above to achieve its primary objectives while keeping all other risks under control to avoid future risks.