The most common misunderstood term seen in the security industry is Risk Management. If you Google the term “Risk Management”, you will find yourself buried in a pile of information ranging from financial risk management to business risk management. And if you happen to fall upon the actual security risk management concept, you may come across a blog post, or online article describing risk management incorrectly. Even when speaking with some corporate decision makers (and some IT professionals), the security term risk is often used interchangeably with other terms such as vulnerability and threat. I have seen vendors marketing tools that were for “Risk Management” but in reality, they were vulnerability management tools. I can truly understand why education must be made a priority when talking to decision makers prior to discussing a risk management assessment.
The terms risk, vulnerability and threat are three separate terms that work together:
1. Vulnerabilities – are holes and weaknesses in an organization, which are typically the easiest to find and remediate, usually through penetration and vulnerability tests.
2. Threat – is the possibility that something or someone will find out about the vulnerability and exploit it.
3. Risk – is the probability that a threat can become real, resulting in some form of impact on the business, should that vulnerability become exploited – the unanswered question is how badly will it hurt the organization. This is usually the hardest to calculate.
Some companies think they have a risk management program already in place, but due to the misunderstanding of terminology, will actually have a vulnerability program in place. I have had some companies actually refer to their traditional Enterprise Risk Management (ERM) program when asked if they had a risk management program in place – which is completely different from any security program. ERM includes credit, liquidity, regulatory compliance, and market risk, as well as risk transfer strategies, capital management, and strategy development. However, a solid IT Security Risk Management Program should be an integral part of a holistic ERM – which will cover the organizations risks more efficiently and effectively. After a brief explanation between the differences of the terms, it is quickly understood that their misunderstanding may have caused them to fall short in implementing a solid risk management program. Additionally, if the risk management program does not include and address all of the layers of the organization that can contain threats – such as administrative, technical, physical, operations, tactical, and strategic – it is not a risk management program.
Risk Management can be both complex and time consuming. The need to understand business, capital, and human resource issues, as well as management levels are critical during assessment – rather than looking at it solely through a technical perspective. An organization must attempt to read the future, determine what can happen, and how much it can cost.
Risk management should not solely rest on the shoulders of the CSO. It should be a collective effort by including decision makers and department heads throughout the entire organization that are knowledgeable and able to contribute to the process. Not only are they able to fully understand their department and the risks that take place – which are not just technical risks – they are also effectively positioned to enforce the plan, as well as assist in making changes to the culture of the organization starting within their department.
During the assessment, a tremendous amount data will be gathered and the current security component, as well as the business issues than can be affected by the current security in place, will be reviewed. Vulnerability and penetration tests will reveal what needs to be protected and how, and interviews with staff will provide information on gaps in policies and procedures. This process will allow organizations to learn their acceptable risk levels – which will tell them how much security they actually need. An organization’s policies should reflect acceptable risk levels in order to implement the right amount of security.
You can’t address all of your risks, and in many situations, it would not be necessary to do so. Once you associate the vulnerability with the threat, and how that threat can affect the business, this will clarify how to manage your risk. The vulnerability that has the highest threat and will cost the company the most if exploitation occurs will be the order in which risk should be managed.
Understanding what risk management truly is continues to be the best strategy in properly assessing your organization the first time around, which will save you money in the long-term. When this concept is not fully understood, organizations find themselves either spending too much money on security, or not enough money – yet still lacking the right countermeasures implemented for tangible and intangible assets or controls that actually need risk management.