Information technology or IT risk is basically any threat to your business data, critical systems and business processes. It is the risk associated with the use, ownership, operation, involvement, influence and adoption of IT within an organisation.
IT risks have the potential to damage business value and often come from poor management of processes and events.
Categories of IT risks
IT risk spans a range of business-critical areas, such as:
. security – eg compromised business data due to unauthorised access or use.
. availability – eg inability to access your IT systems needed for business operations.
. performance – eg reduced productivity due to slow or delayed access to IT systems.
. compliance – eg failure to follow laws and regulations (eg data protection).
IT risks vary in range and nature. It’s important to be aware of all the different types of IT risk potentially affecting your business.
Different types of IT risk
Your IT systems and the information that you hold on them face a wide range of risks. If your business relies on technology for key operations and activities, you need to be aware of the range and nature of those threats.
Types of risks in IT systems
Threats to your IT systems can be external, internal, deliberate and unintentional. Most IT risks affect one or more of the following:
. business or project goals
. service continuity
. bottom line results
. business reputation
Examples of IT risks
Looking at the nature of risks, it is possible to differentiate between:
. Physical threats – resulting from physical access or damage to IT resources such as the servers. These could include theft, damage from fire or flood, or unauthorised access to confidential data by an employee or outsider.
. Electronic threats – aiming to compromise your business information – eg a hacker could get access to your website, your IT system could become infected by a computer virus, or you could fall victim to a fraudulent email or website. These are commonly of a criminal nature.
. Technical failures – such as software bugs, a computer crash or the complete failure of a computer component. A technical failure can be catastrophic if, for example, you cannot retrieve data on a failed hard drive and no backup copy is available.
. Infrastructure failures – such as the loss of your internet connection can interrupt your business – eg you could miss an important purchase order.
. Human error – is a major threat – eg someone might accidentally delete important data, or fail to follow security procedures properly.
How to manage IT risks?
Managing various types of IT risks begins with identifying exactly:
. the type of threats affecting your business
. the assets that may be at risks
. the ways of securing your IT systems
Potential impact of IT failure in business
For businesses that rely on technology, events or incidents that compromise IT can cause many problems. For example, a security breach can lead to:
. identity fraud and theft
. financial fraud or theft
. damage to reputation
. damage to brand
. damage to your business physical assets
Failure of IT systems due to downtime or outages can result in other damaging and diverse consequences, such as:
. lost sales and customers
. reduced staff or business productivity
. reduced customer loyalty and satisfaction
. damaged relationship with partners and suppliers
If IT failure affects your ability to comply with laws and regulations, then it could also lead to:
. breach of legal duties
. breach of client confidentiality
. penalties, fines and litigation
. reputational damage
If technology is enabling your connection to customers, suppliers, partners and business information, managing IT risks in your business should always be a core concern.
Understand why IT risk management matters?
Risk management exists to help us to create plans for the future in a deliberate, responsible and ethical manner. This requires risk managers to explore what could go right or wrong in an organisation, a project or a service, and recognising that we can never fully know the future as we try to improve our prospects.
Risk management is often perceived as a technocratic and dull profession; this isn’t how the NCSC see risk management at all. Risk management is about analysing our options and their future consequences, and presenting that information in an understandable, usable form to improve decision making.