Today, organizations are always striving to be on the growth curve in every aspect of business. And in order to achieve this, they are constantly experimenting with newer technologies, expansion strategies, mergers & acquisitions, so on and so forth. Organizations today cannot maintain within any set of boundaries and yet expect to grow. This behavioural trend is exposing them to an environment ridden with risks – both internally & externally for their customers, partners and shareholders.
This includes a myriad of unexpected events that could threaten financial accountability, reputation and business relationships. Therefore, security, privacy and IT asset management processes need to be governed by complex compliance requirements. The repercussions of an incident can be far reaching and also heavy on the costs.. Therefore, it is critical for an organization to develop effective and efficient ways of managing risk and maintaining compliance.
Effective protection requires an enterprise-wide security approach that handles risks and incidents in a rational and consistent manner – across all facilities, workforce and infrastructure. Having assessed relevant risks, management determines how it should respond, reviewing likelihood and impact, evaluating costs and benefits, and selecting options that bring residual (remaining risk) within the entity’s risk tolerances. Based on the decision, one of the below risk mitigation strategies are adapted.
- Avoidance: not participating in events that give rise to risk
- Reduction: specific actions taken to reduce likelihood or impact or both
- Sharing: reducing likelihood or impact by sharing portion of the risk (insurance)
- Acceptance: no action taken, “learns to live with the risk,” and monitor it
Each of these options requires developing a plan that is implemented and monitored for effectiveness. It is all about understanding the risk and its impact on your organization. A good optimization strategy can control risks better and make breach occurrences less frequent when the policies and best practices are communicated thoroughly within the organization.
The entire risk mitigation process should be monitored and measured by appropriate controls and approved by the right level of management. In all cases, management responsibility has to be assigned to every predictable risk in order to ensure that it is managed. Some factors are to be considered while deciding which risk mitigation activity would work best for the organization, such as:
- Cost-benefit analysis of improvement cost Vs the predictable loss
- Timeline to put into action
- Availability of resources
Monitoring of risks is not a one-time activity and needs to be a continuous process that helps reduce the frequency of risks by solving them as soon as they are detected. Knowing the potential benefits of risk reduction is equally important as knowing the probable risks. Risk reduction can help an organization in many ways:
- Being better prepared for any new regulation in the current world of increasing regulatory regimes for global institutions
- Increased regulatory oversight and uncertainty surrounding future regulatory landscape
- Provide protection and support for the most important and valuable assets
- Safeguarding the reputation of the organization
- Assure the confidence of customers and partners
- Increase organizational good-will by being known to have conducted due-diligence in reducing risk
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Subhash is a former Happiest Mind and this content was created and published during his tenure.
