The IT risk management is the application of risk management to Information technology context in order to manage IT risk, i.e.:
The business risk associated with the use, ownership, operation, involvement, influence and adoption of IT within an enterprise
IT risk management can be considered a component of a wider Enterprise risk management system.
The establishment, maintenance and continuous update of an Information Security Management System (ISMS) provide a strong indication that a company is using a systematic approach for the identification, assessment and management of information security risks.
Different methodologies have been proposed to manage IT risks, each of them divided in processes and steps.
According to Risk IT,it encompasses not just only the negative impact of operations and service delivery which can bring destruction or reduction of the value of the organization, but also the benefit\value enabling risk associated to missing opportunities to use technology to enable or enhance business or the IT project management for aspects like overspending or late delivery with adverse business impact.
Because risk is strictly tied to uncertainty, decision theory should be applied to manage risk as a science, i.e. rationally making choices under uncertainty.
Generally speaking, risk is the product of likelihood times impact (Risk = Likelihood * Impact).
The measure of a IT risk can be determined as a product of threat, vulnerability and asset values:
Risk = Threat * Vulnerability * Asset
IT risk is a part of business risk—specifically, the business risk associated with the use, ownership, operation, involvement, influence and adoption of IT within an enterprise. It consists of IT-related events that could potentially impact the business. It can occur with both uncertain frequency and magnitude, and it creates challenges in meeting strategic goals and objectives.
Management of business risk is an essential component of the responsible administration of any organization. Due to IT’s importance to the overall business, IT risk should be treated like other key business risks.
The Risk IT frameworkexplains IT risk and enables users to:
Integrate the management of IT risk with the overall ERM
Compare assessed IT risk with risk appetite and risk tolerance of the organization
Understand how to manage the risk
IT risk is to be managed by all the key business leaders inside the organization: it is not just a technical issue of IT department.
IT risk can be categorized in different ways:
IT Benefit/Value enabler
Risks related to missed opportunity to increase business value by IT enabled or improved processes.
IT Program/Project delivery
Risks related to the management of IT related projects intended to enable or improve business: i.e. the risk of over budget or late delivery (or not delivery at all) of these projects.
IT Operation and Service Delivery
Risks associated to the day by day operations and service delivery of IT that can bring issues, inefficiency to the business operations of an organization.
The Risk IT framework is based on the principles of enterprise risk management standards/frameworks such as COSO ERM and ISO 31000. In this way IT risk could be understood by upper management.