it risk management

@ITCAMPRO #ITCAMP15Community Conference for IT Professionals

IT Risk Management

IT Solutions Specialist

CEH, Hyper-V MVP

tudy.tel

Tudor Damian


Many thanks to our sponsors & partners!

GOLD

SILVER

PARTNERS

PLATINUM


• IT risk overview

• COBIT & Risk IT framework

–Risk Governance

• Risk Appetite and Risk Tolerance

–Risk Evaluation

–Risk Response

• IT risk management as a continuous process

• Sources:

Agenda


IT RISK OVERVIEW

Business risk related to the use of IT

Image source: coolrisk.com / Artist: Michael Mittag


• We create information

• We use and store information

• We destroy information

• Technology creates opportunities

–Business, education, government, sales of real and electronic goods, e-health, etc.

• IT plays an essential role in these activities

–Part of its duty is to protect these information assets

Information as a key resource


• Email passwords may be disclosed

• Facebook accounts may be used by someone else

• Credit card information may be disclosed

• Customer information may be stolen

• IT service delivery to customers may be poor

• IT systems may be obsolete

• IT projects may be late or fail

• IT systems do not provide any business benefit

• Risk of non-compliance with the regulator

• Own people may harm the systems

IT risk is business risk


• Opportunity and Risk - two sides of the same coin

–Those who manage risk, succeed

–Those who do not, fail

• Risk is inherent to every enterprise

• You don’t really have a choice: every decision taken,

every strategy chosen, carries a certain risk

Opportunity vs. Risk


• No organization is unaffected

• Businesses are disrupted

• Privacy is violated

• Organizations suffer direct financial loss

• Reputation is damaged

The impact of IT risk


High Risk

Low Cost

Low Risk

High Cost

Risk vs. Investment – an easy decision (?)


• 87% of small business and 93% of larger organizations

experienced a security breach in the last year alone

• 85% of breaches took weeks to discover

• 96% of breaches were not highly difficult

• 97% of breaches were avoidable through simple or

intermediate controls

• 57% of EU incidents were caused by administrative error,

missing hardware, exposed online, or stolen by insiders

Some statistics

Sources: Center for Media, Data and Society (CMDS) / Verizon / UK Government, Department for Business, Innovation and Skills (BIS)


Timeline of discovery for cyber attacks (2013)

Hours, 9%

Days, 8%

Weeks, 16%

Months, 62%

Years, 5%

Hours Days Weeks Months Years

Source: Verizon


Cyber crime attacks experienced by US companies (June 2014)

V I RUSES, W ORM S, TROJAN S

M AL W ARE

BOTN ETS

W EB -BASED ATTACK S

M AL I C I OUS CODE

PHI SHI N G AN D SOCI AL EN G I N EERI N G

M AL I CI OUS I N SI DERS

STOL EN SERV I CES

DEN I AL OF SERV I CE

100%

97%

76%

61%

46%

44%

41%

37%

34%

Sources: Ponemon Institute; Hewlett-Packard (HP Enterprise Security)


Some more statistics

Ponemon Institute 2011 Cost of Data Breach Study: United StatesVerizon 2012 Data Breach Investigations ReportReuters, http://reut.rs/zzrcecSymantec Internal Threat Report 17WIRED, http://www.wired.com/threatlevel/2012/05/flame/all/1

European Commission-Justice, Data ProtectionPonemon Institute Second Annual Benchmark Study on PatientPrivacy and Data SecurityISACA 2011 Top Business/Technology Issues SurveySymantec 2012 SMB Disaster Preparedness Survey

Ponemon Institute True Cost of Compliance ReportThomson Reuters State of Regulatory Reform 2012eWeek, http://www.eweek.com/c/a/IT-Infrastructure/Unplanned-IT-Downtime-Can-Cost-5K-Per-Minute-Report-549007/

Sources:


Even more statistics

Ponemon Institute 2011 Cost of Data Breach Study: United StatesVerizon 2012 Data Breach Investigations ReportReuters, http://reut.rs/zzrcecSymantec Internal Threat Report 17WIRED, http://www.wired.com/threatlevel/2012/05/flame/all/1

European Commission-Justice, Data ProtectionPonemon Institute Second Annual Benchmark Study on PatientPrivacy and Data SecurityISACA 2011 Top Business/Technology Issues SurveySymantec 2012 SMB Disaster Preparedness Survey

Ponemon Institute True Cost of Compliance ReportThomson Reuters State of Regulatory Reform 2012eWeek, http://www.eweek.com/c/a/IT-Infrastructure/Unplanned-IT-Downtime-Can-Cost-5K-Per-Minute-Report-549007/

Sources:


Statistics overload


How is IT Risk ideally handled?


COBIT® AND RISK IT FRAMEWORKS

www.isaca.org/cobit



• Better accountability and responsibility (ownership)– You get out of the blame game

• Better management

• Better benefits from IT investments

• Better compliance

• Better monitoring

• Easily compare yourself with others

• Everybody’s doing it anyway– ITIL, ISO 27001/2, COSO ERM, PRINCE2, PMBOK, Six Sigma, TOGAF, etc.

Why use best practices / frameworks?


IT risk in the enterprise risk hierarchy


Overview – COBIT®, Risk IT and Val IT


• A comprehensive IT governance and management framework

• Addresses every aspect of IT

• Ensures clear ownership and responsibilities

• A common language for all

• Improves IT efficiency and effectiveness

• Better management of IT investments

• Ensures compliance

• A complementary copy is available:

– www.isaca.org/cobit

COBIT®

http://www.isaca.org/cobit


•Manage 3rd-party Services

•Ensure Continuous Service

•Ensure Systems Security

•Manage Incidents

•Manage Data & Operations

•Monitor and Evaluate IT Performance

•Monitor and Evaluate Internal Control

•Ensure Compliance

•Provide IT Governance

•Acquire & Maintain Application Software

•Acquire and Maintain Technology Infrastructure

•Manage Changes

• Strategic IT Plan

• Manage IT Investment

• Manage IT Human Resources

• Manage IT Risks

• Manage Projects

PLAN & ORGANIZE

ACQUIRE & IMPLEMENT

DELIVERY & SUPPORT

MONITOR& EVALUATE

COBIT® coverage


• Framework for effective management of IT risk

• Complements COBIT®– COBIT® provides a set of controls to mitigate IT risk

– Risk IT provides a framework for enterprises to identify, govern and manage IT risk

• Enterprises who have adopted COBIT® can use Risk IT to enhance risk management

• Integrates the management of IT risk into the overall enterprise risk management (ERM) of the organization

• Helps management make well-informed decisions about the extent of the risk, the risk appetite and the risk tolerance of the enterprise

• Helps management understand how to respond to risk

• Available for ISACA members:– http://isaca.org/RiskIT

Risk IT

http://isaca.org/RiskIT


• Always connects to business objectives

• Aligns the management of IT-related business risk with

overall enterprise risk management (ERM) - if applicable

• Balances the costs and benefits of managing IT risk

• Promotes fair and open communication of IT risk

• Establishes the right tone from the top while defining and

enforcing personal accountability for operating within

acceptable and well-defined tolerance levels

• Is a continuous process and part of daily activities

Risk IT principles


• To prioritize and manage IT risk, management needs a clear understanding of the IT function and IT risk

– Key stakeholders often do not have a full understanding

• IT risk is not just a technical issue

– IT experts help to understand and manage aspects of IT risk

– Business management is still the most important stakeholder

• Business managers determine what IT needs to do to support their business

– They set the targets for IT

– They are accountable for managing the associated risks

Managing and understanding IT risk


1. Define a risk universe and scoping risk management

2. Risk appetite and risk tolerance

3. Risk awareness, communication and reporting: includes key risk indicators, risk profiles, risk aggregation and risk culture

4. Express and describe risk: guidance on business context, frequency, impact, COBIT business goals, risk maps, risk registers

5. Risk scenarios: includes capability risk factors and environmental risk factors

6. Risk response and prioritization

7. A risk analysis workflow: “swim lane” flow chart, including role context

8. IT risk mitigation using COBIT and Val IT

Risk IT process model


• Risk IT Framework– A set of governance practices for risk management

– An end-to-end process framework for successful IT risk management

– A generic list of common, potentially adverse, IT-related risk scenarios

– Tools and techniques to understand concrete risks to business operations

• Risk IT Practitioner Guide– Support document for the Risk IT framework

– Provides examples of possible techniques to address IT-related risk issues

– Building scenarios, based on a set of generic IT risk scenarios

– Building risk maps, techniques to describe scenario impact and frequency

– Building impact criteria with business relevance

– Defining KRIs (Key Risk Indicators)

Risk IT publications


Risk management frameworks and standards compared


Key activities / Roles

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Define IT risk analysis scope I R C I C A R C C

Estimate IT risk I R C C I A/R R R C

Identify risk response options C C C R A R R I

Perform a peer review of IT analysis A/R I I I

Perform enterprise IT risk assessment I A R R C I R C R C C

Propose IT risk tolerance thresholds I I C R C I A C C C

Approve IT risk tolerance A C C C C R C C C C C

Assign IT risk policy C A R R R C R R R R C

Promote IT risk-aware culture A R R R R R R R R R R

Encourage effective communication of IT risk R R R R R R A R R R R

RACI charts – IT risk example

A RACI chart identifies who is Responsible, Accountable, Consulted and/or Informed


RISK GOVERNANCE



• Risk Governance– Establish and Maintain a Common Risk View

– Integrate with Enterprise Risk Management (ERM)

– Make Risk-aware Business Decisions

• Risk Evaluation– Collect Data

– Analyze Risk

– Maintain Risk Profile

• Risk Response– Articulate Risk

– Manage Risk

– React to Events

Risk governance, evaluation and response


IT Risk Management Responsibilities and Accountability


RISK APPETITE AND RISK TOLERANCE



• Risk Appetite: the amount of risk an entity is prepared to accept when trying to achieve its objectives– Defining factors:

• The enterprise’s objective capacity to absorb loss (e.g., financial loss, reputation damage)

• The (management) culture or predisposition towards risk taking -cautious or aggressive (i.e. what is the amount of loss the enterprise wants to accept to pursue a return?)

• Risk Tolerance: the tolerable deviation from the level set by the risk appetite and business objectives – e.g., standards require projects to be completed within estimated

budgets and time, but overruns of 10 percent of budget or 20 percent of time are tolerated

Risk Appetite and Risk Tolerance


Risk map


Sample risk scenarios and risk appetite


Elements of risk culture


RISK EVALUATION



Expressing IT risk in business terms


IT scenario development


IT risk scenario components


RISK RESPONSE



• Identify Key Risk Indicators based on:

– Impact

– Effort to implement, measure and report

– Reliability

– Sensitivity

• Decide on best response to risk

– Avoidance

– Reduction/Mitigation

– Sharing/Transfer

– Acceptance

Risk response overview


IT RISK AS A CONTINUOUS PROCESS



Risk IT maturity model


Business Goals

IT GoalsProcess Goals

Activity Goal

Defining goals and metrics - example

Maintain reputation

IT can resist to an attack

Reduce unauthorized

access

Understand vulnerabilities

and threats

Number of incidents with public embarrassment

Number of incidents with business impact

Number of incidents caused by unauthorized access

Frequency of review


SUMMARY



• Use best practices (such as COBIT®) to minimize IT Risks

• Start with basic processes

• Form a high level IT Strategy Committee

• Formulate and implement IT Strategic Plan and IT policies

• Allocate resources (budget, people, infrastructure)

• Assign roles and responsibilities, authority and accountability (using RACI chart)

• Make IT a regular item on the board agenda

• Regularly assess, review and monitor IT Risks

Summary


Q & A



Thank you!

IT Solutions Specialist

CEH, Hyper-V MVP

tudy.tel

Tudor Damian