Applying Risk Management Essay Example for Free

Applying Risk Management Essay Risk management is an important element in managing information systems. Applying risk management principals to business procedures is essential because it helps organizations design and maintain a safe systems environment to ensure the confidentiality, integrity, and availability of company data. Kudler Fine Foods has expressed an interest in developing an Enterprise Resource Planning (ERP) system. The primary objective is to improve business administration by integrating stores and business systems. Kudler Fine Foods has three stores in California and integrating business functions across all stores would be extremely beneficial. This paper will outline the major factors and benefits by applying risk management principles to ensure a secure and effective system. Risk Management Principles According to Whitman and Mattord (2010), risk management is a collaborative effort involving Information security, information technology, management, and users. It is important to involve all of these areas to devise a comprehensive and effective risk management strategy. The major principles include identifying risks, quantifying risks, plan for risks, and monitor and manage risks. The first stage is risk identification. This is when the organizations managers identifies all of its assets and classifies them into meaningful categories in addition to prioritizing them by importance. Assets include various components such as people, processes, data, and all elements of information technology. Gathering information on assets such as the people aspect processes, and data could be challenging because they are not always documented and readily available. The information gathered for people may include position titles, the title of his or her supervisor, security levels, and skills. Information collected  for processes may include procedure description, purpose, IT connections, document storage location for reference and updates. After listing out the assets, the next step is to classify them into categories such as people, data, software, and hardware and then classify each asset into sub-categories such as confidential, internal, and public. Applying value or impact to each asset is next by determining its criticality to the business. Questions that may help to assigning a value may include; Which assets generates the highest profitability?, or Which asset would impede business functions if it were compromised? Quantifying risks provides the framework for executives to make informed decisions in relation to cost and resources surrounding security. All of the steps outlined above is essential in the risk identification stage (Whitm an and Mattord, 2010). After completing the risk identification process where all assets are identified and classified, the next phase is to determine the potential threat source and potential vulnerability. Some common threat sources include natural threats, human threats, and environmental threats. According to the National Institute of Standards and Technology (2002), a threat is an exploitation of a vulnerability caused by a threat source. The NIST publication suggests the following: identifying a threat source, indicating the motivation of source, and outlining the threat actions. This practice will help determine the likelihood of a threat taking advantage of a system vulnerability. Next in the process is identifying vulnerabilities. Vulnerability is a weakness or flaw in procedures or controls applied to a system. Identifying potential vulnerabilities will help an organization put controls in place to mitigate risks associated with vulnerabilities. Risk mitigation involves a systematic approach in reducing the exposure to a risk and the likelihood of it occurring. Mitigating defined risks is the gateway for the development of processes and controls to reduce the likelihood of a threat. Having prevention mechanisms that include policies and controls is best practice in regard to securing assets therefore it is critical that Kudler Fine Foods determines the best risk management process that fits their business requirements and needs. Because technology is consistently growing and changing, preventative measures must include flexibility to allow for change and growth. Without these considerations, a business could jeopardize themselves by restricting the ability to expand or even update the systems  with necessary security patches. Preventative measures should include future growth. As technology grows, risks increase. Protection mechanisms will change as new threats are introduced to business as well as new legislations. Many security standards are based on data protection regulations and as laws change or new laws are introduced, information technology is the most costly element in ensuring compliance. There could be costly ramifications with poor planning. Risk avoidance can be costly and inconvenient but it would be more costly and inconvenient when a security issue occurs. A risk assessment would be the first step to take when determining whether to chance a certain risk or not. Determining what the assets are and understanding the impact on the business if a security incident occurs is important. It is also important for businesses to understand regulations and what is necessary to comply with certain laws and requirements. Kudler Fine Foods must conduct risk analysis and ask themselves â€Å"What is the risk of not applying preventative measures?† and â€Å"What would it cost to recover from a certain attack?† Legal ramifications could result if a security breach occurs. This could include steep financial penalties as well as jeopardizing company reputation. The table below outlines examples of risk, vulnerability, and mitigation strategy. Risk Vulnerability Mitigation Strategy Hardware failure Hardware could fail and impede business. Systems could be unavailable for an undetermined amount of time. Create security policy to ensure all hardware is kept up to date with current patches and upgrades. User training Insufficient training of end-users leads to improper use of application which could compromise data or systems. Create detailed training documentation and implement a user training program. Ensure all users participate in training. Deliberate network attacks Potential Malware and Denial of Service attacks. Could lead to exposure of sensitive information. Implement policy to ensure adequate firewall  protection, anti-malware software, and install Intrusion Detection System. Conclusion It is important for businesses such as Kudler Fine Foods to employ a risk management strategy to protect its assets and reputation. Without an effective risk management process the company will be vulnerable to various threats. It is Kudler Fine Foods responsibility to determine what mechanisms should be applied and how it will maintain a secure environment for its own business objectives as well as meeting required regulations. The risk management process is the primary method in facilitating security objectives. References Whitman,M.E., Mattord, H. J. (2010). Management of information security(3rded.). Boston, MA: Course Technology/Cengage Learning National Institute of Standards and Technology. (2002). Retrieved from http://csrc.nist.gov/publications/nistpubs/800-30/sp800-30.pd