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IT risk management involves the identification, organization, management, and control of IT risks. It is usually done in a way that balances both the costs and the benefits of using security solutions to protect an organization. Risk management, in simpler terms, allows an organization to focus more on the most serious or more urgent risks and less on the minor risks.
Organizations must be aware of the risks they face. An organization will always face a cyber security threat at any time. It is important that the organization manages all risks to its IT infrastructure. Because risks can come from many sources, IT risk management must be broad. These risks can be caused by human error, natural calamities and cyber attackers. The organization’s risk management process is often described as a 5-step one.
This is the first step of the risk management cycle. This is the first step in the risk management cycle. Organizations will now focus on identifying and gathering detailed information about their risks. Risks can come from many things so the responsible people need to be open-minded about looking for them. Risks include financial uncertainties, changes in regulations, management issues, disasters, and accidents. Risks are constantly changing so risk management should be practiced often. These strategies can be used to ensure that the most serious risks are identified.
Once the risks are identified, it is necessary to determine the likelihood of their occurrence and the impact. As mentioned earlier, risk management allows organizations to spend more on the most serious risks and less on those that are unlikely to occur. Risk analysis is crucial in determining the nature and consequences of a risk to the organization.
This step is crucial to the entire process and could determine the success of the risk management exercise. Qualitative and quantitative risk analysis are used to analyze risk. Either way, a risk can be analyzed in terms its impact on the organization using several metrics, such as budget, schedule, and resources.
This step is an in-depth assessment of a risk. This step examines the likelihood of the risk occurring and its potential consequences. This allows the organization to determine whether the risk is acceptable. This filtration of risks shows that acceptable risks are only given low priority because the organization is willing to accept them since they can do no damage. They are likely to have low impact and low likelihood of happening.
The unacceptable risks are managed in this step. These risks are addressed by the organization to prevent them from happening and to minimize their impact on the organization. Risk mitigation will include both contingency plans and prevention strategies. The best way to prevent the risk from happening is through prevention tactics. The contingency plans will take care of the rest if the risk occurs.
Risk mitigation is not the only aspect of risk management. Risks can change in priority depending on their severity or likelihood of occurrence. They should be monitored regularly. Risk monitoring involves periodic review and updating the risks. New risks are also discovered.
There are four ways that an organization can manage risks. These are:
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You can also visit the IDC website for more information