Risk Management in Five Easy Steps

IT risk management includes all of the activities that an organization carries out to manage information technology related risks. IT risk management is a formalized process and includes:

1. Risk Assessment
2. Risk Analysis
3. Risk Treatment
4. Risk Mitigation
5. Risk Review and Evaluation

1. Risk Assessment (Identify Risks)

Risk Assessments identify possible sources of risk. They identify threats or events that could have a meaningful impact on the organization.

2. Risk Analysis (Impact)

Risk Analysis considers the probability and magnitude of each event. Risk evaluation compares the estimated risk with a set of risk criteria to determine the significance of the risk.

3. Risk Treatment (Risk Response Action Plan)

Risk Treatment identifies how each risk is to be addressed with preventive, detective, and corrective controls. Residual risk is the risk left over after implementing risk treatment steps that avoid the risk, transfer the risk, reduce the risk, or accept the risk.

4. Risk Mitigation (Risk Control)

Risk mitigation plans propose applicable and effective security controls that manage the risks. The plan should contain a schedule outling the tasks to be performed, individuals responsible for the actions, estimated dates, etc.

5. Risk Review and Evaluation (Risk Effectiveness)

Risk management plans change over time as the business evolves, as new threats emerge, as losses are incurred, and as management changes. Review the effectiveness of your approach and revise as necessary.

Risk assessments help organizations identify, manage, and reduce risks to acceptable levels. Formal and documented policies ensure a top down approach to managing security risks.