Guide to an Effective IT Risk Assessment

If you’re a managed service provider (MSP), you should already know the importance of accurate IT risk assessment. If you don’t, then not only are you behind the curve, but your business is at risk. The heart of IT risk assessment is identifying, comprehending, controlling, and reducing overall risks to your organization’s most important assets.

Here at Liongard, we can help you manage your IT system with the utmost confidence so that you can identify and mitigate any risks before they become an expensive reality.

Our innovative automation platform provides a complete picture of your critical operations and assets, making it easy for you to standardize, secure, and scale your IT managed services. We can identify possible threats, contain them, and proactively secure your IT infrastructure.

What Is a Security Risk Assessment?

Information security risk assessments involve identifying internal and external threats to your sensitive data along with assets that could be at risk from a cyberattack. It’s about recognizing any risks and vulnerabilities to evaluate what type of impact they could have on your organization.

This information security risk assessment will help you develop a risk mitigation plan to secure operations and proactively address the most likely threats before they happen.

Why Are Regular IT Security Risk Assessments So Important?

Performing regular risk analysis assessments is essential. It lays the groundwork for successful business practices, reduces security incidents, and provides many other benefits so that your organization can:

  • Highlight areas in your IT operations with the highest risk level and value
  • Mitigate risks while protecting information assets
  • Prevent costly security incidents, like data breaches
  • Improve security posture
  • Correctly identify critical data assets
  • Provide data-driven results to develop risk intelligence
  • Maintain complete compliance with all regulations (i.e., HIPAA, GDPR) and software licensing
  • Pinpoint and eliminate security risks
  • Create risk treatment plans to address existing and emerging risk

What Is a Cyber Risk?

Cyber risk is the potential of losing money or having an operational dysfunction to your IT system and processes resulting from an accidental or malicious security event from the inside or by a third party. The CSRC also has a great definition of cyber risk if you want to learn more.

A cyber risk could be unauthorized access, a data security breach of sensitive information, a network disruption, spyware and viruses, hardware failure, or any event that damages your organization.

IT Risk Assessment Components and Equation

If you perform them successfully, IT risk assessments involve four critical components: threat, vulnerability, impact, and likelihood.

Four Critical Components

1. Threat

A threat is any incident (accidental or intentional) that could damage a business or cost it money and assets.

2. Vulnerability

A vulnerability includes any weak links, either in the IT department or in business operations. Identifying weaknesses involves a vulnerability assessment, which you can do manually (using third parties) or with automated vulnerability scanning tools.

3. Impact

Impact measures the amount of damage an organization would sustain if potential threats were to take advantage of its vulnerabilities and weak spots.

4. Probability

This component measures the probability that a security risk or threat will actually occur.

The Risk Equation

The risk equation for assessing risks is simple: Risk = Threat x Vulnerability x Asset. It may sound mathematical, but it’s more about logic than math. It involves accurately weighing and evaluating risks.

It would help if you had a fundamental understanding of the components that will help you evaluate and prioritize risks, including the following.

1. Threat Frequency

Threat frequency determines the probability of a risk emerging and being likely to occur.

2. Vulnerability

The vulnerability component refers to the possibility that a threat will take advantage of a specific vulnerability and weak point.

3. Cost

The cost component is the total cost a realized threat would bring to an organization. It could be the loss of critical data assets, expensive system downtime, hardware damage, even legal fines from a security breach.

Who Should Perform the Risk Assessment Process?

An IT security risk assessment should encompass your entire organization, so it requires complete in-house coordination. Therefore, every department should be represented, including senior management. Our information security experts at Liongard can help you develop and maintain complete transparency to help you create an effective risk assessment policy and implement better information security practices.

What Are the Nine Steps of This Process?

The IT risk assessment process consists of nine different steps.

1. Pinpoint and Prioritize Assets

Identify your organization’s assets and evaluate which should be given priority by creating a company-approved standard for measuring their value and importance to business processes. One method is using a simple rating system for threats: minor, moderate, and critical.

2. Identify Threats

Take stock of any threat that could potentially damage your organization. That could be anything, such as hardware damage, hackers, malware, malicious interference, or even natural disasters that could cause physical damage to your servers.

3. Identify Vulnerabilities

You already know that a vulnerability is any weak spot that a threat could potentially exploit. For example, the vulnerability could be in your software or even be the location of your servers.

4. Analyze Security Policies and Controls

Evaluate your existing security and control policies to reduce or eliminate the possibility that a vulnerability might turn into a threat. Usually, this consists of technical and non-technical controls.

5. Determine the Probability of an Incident

Assess the potential for vulnerabilities to turn into actual threats or residual risks by looking at the situation from all angles. This step should also have a low/moderate/high rating system.

6. Analyze Potential Impact From Threats

If your organization’s most critical assets were lost or damaged, how much of an impact would each one have? Calculate this information by creating an impact analysis report so that you can fully understand each threat’s potential effect.

7. Prioritize Information Security Risks

For every vulnerability and threat that you identify, you should also determine its priority level. You can assess priority by looking at the probability that a threat will occur, calculating its projected impact and cost, and implementing risk management policies to help alleviate cost and damages.

8. Implement Security Controls

You can develop and implement security controls using the priority and threat/vulnerability lists and reports you made in steps six and seven. Then, use that information to create a risk management procedure to assess what actions you need to take to reduce and eliminate risk.

9. Create a Risk Assessment Report

Now, use all the critical information you’ve gathered in the last eight steps and document your results to create an accurate risk evaluation report. It will help you make the best and most effective decisions regarding your operations and business processes.

Frequently Asked Questions

What is an IT cybersecurity risk assessment?

An IT cybersecurity risk assessment aims to identify and evaluate potential threats to your IT infrastructure. It also helps mitigate damage and proactively address issues before they can cause financial losses or disrupt your operations.

What are the five principles of risk assessment?

The five principles of risk assessment are:

  • Identification
  • Assessment
  • Evaluation
  • Taking Action
  • Monitoring

What does an IT assessment include?

An IT risk assessment involves a detailed report on any potential threats or risks to your organization’s IT infrastructure. It should include a data-driven analysis on the efficiency of your operations, any potential security gaps, and how to proactively address potential threats and reduce damage when a risk emerges.

What is an information risk assessment?

An information security risk assessment is the process of determining and evaluating potential risks to prevent them from occurring. Essentially, it’s risk management that should keep your IT infrastructure and organization’s assets safe from threats.

Call our Liongard Experts Today

You can call us toll-free at (800) 332-0460 today to learn more about how an IT risk assessment by our professionals at Liongard can help your business or organization lay the groundwork for success.

Liongard, Cybersecurity

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