Business in the digital era is faced by a growing number of IT risks, in addition to traditional operational and strategic risks. But just as there is no such thing as 100% cybersecurity, there is no such thing as 100% risk elimination. It is therefore essential that businesses manage their risks to ensure the preservation of the business, while at the same time enabling the business to take calculated risks to achieve its objectives.
In other words, it is important for businesses to define the amount of risk they are willing to accept to realize their objectives, and then manage their risks so they understand which risks are worth taking because of the value that will be delivered to the business.
Risk management is becoming increasingly important because the risks that businesses are facing are proliferating and have become more complex due to the reliance of businesses on digital technology, especially in the post Covid era, in which more people are working from home and companies are increasing their reliance on cloud-based services. There is now a continually growing number of risks that need to be managed. These include risks relating to cyber-attacks, software supply chain compromises, and compliance risks.
IT risk, compliance risk, and vendor risk are among the biggest threats to business continuity, and addressing these risks, will not only add value to the business, but will also enable better security. It is worth noting that regulatory compliance increasingly requires effective risk management, with IT risk now being considered as a real business risk.
Leading businesses understand that IT risk and business or operational risk are very closely linked, and that traditional risk management methods are inadequate when it comes to managing the risks facing digital organizations. Therefore, they are adopting an integrated approach to risk management to enable executives to coordinate and unify risk management activities throughout the enterprise, with regulatory compliance increasingly becoming a driver towards integrated risk management.
To support new approaches to risk management in the digital era, organizations are turning to Integrated Risk Management (IRM) platforms that are designed to provide a better understanding of risks, and to support risk-based decision making by simplifying, automating, and integrating risk management processes across organizations.
However, using such platforms means that organizations first need to have a common view on and understanding of risks, and the organizational structure and processes to support an integrated approach to dealing with IT and business risk. If this foundation is lacking, it is a good place to start.
Integrated risk management promises to deliver business value, not only by enabling organizations to avoid cyber-attacks, data breaches, business interruptions, and regulatory fines, but also by preparing the organization for future growth or change, based on a solid risk position, third-party ecosystem, and IT architecture. Integrated risk management should be on the agenda of every business in the digital era.
A dedicated IRM software platform is only viable if it makes risk management in the organization more efficient than legacy methods of conducting integrated risk management programs (whether digital or analog) and delivers higher visibility of static and dynamic risk measurements on the lateral and vertical movement of data.
— Paul Fisher, Lead Analyst, KuppingerCole Analysts
Because we understand the importance of risk management, and because we are committed to helping your business succeed, KuppingerCole has a great deal of content available in a variety of formats.
Organizations looking to update and improve their risk management capabilities need to understand what technology solutions are available. An excellent place to start is the recently published Market Compass on Integrated Risk Management Platforms, which looks at the essential capabilities required of IRM solutions, considers the main use cases, and provides an assessment of nine solutions as well as identifying nine more vendors in this market to consider.
As mentioned above, the workplace is becoming increasingly digital, and this trend has been accelerated by the increase in the number of people working remotely or from home. For an in-depth view of the digital workplace and the associated risks, have a look at this Market Compass on Digital Workplace Delivery Platforms, and at this Leadership Brief on Mitigating Availability & Security Risks in Centralized Digital Workplace Delivery.
Reducing the risk of non-compliance to the growing number of IT-related regulations is an important part of risk management. To find out more about the tools that can help keep on top of an increasingly complex and changing regulatory environment, have a look at this Market Compass on IT-GRC Tools. And to find out more about the tools for reducing risks associated with unauthorized access to electronic data and systems, have a look at this Buyer’s Compass on Identity Governance & Administration.
For further considerations of compliance risk, and perspectives on how managing these risks deliver value to the business, have a look at these Leadership Brief on Six Key Actions to Prepare for GDPR and Working for the Business, not the Auditors.
Reducing IT risk can come through better alignment of the business and IT, predictable IT performance and cost, improved change management, efficient IT processes, and improved governance, which are all benefits of IT Service Management (ITSM). To read more on this topic and associated technology solutions, have a look at this Leadership Compass on IT Service Management.
Better risk management is one of the benefits of Governance, Risk, and Compliance (GRC). For a perspective on risk management in the context of GRC, have a look at this Advisory Note on GRC Reference Architecture.
Find out more about risk in the context of the EU’s General Data Protection Regulation (GDRP) and find out how to get an accurate understanding of your organization’s risk posture by having a look at this Advisory Note on the Maturity Level Matrix for GDPR Readiness.
Privileged Access Management (PAM) is one of the most important areas of risk management. To get a better understanding of access-related risks and how to manage them, have a look at this Advisory Note on Trends in Privileged Access Management for the Digital Enterprise.
If you would prefer to listen to our analysts talk about topics related to risk management, listen to this Analyst Chat entitled: From IT GRC to Integrated Risk Management Platforms that looks at the topic of Integrated Risk Management Platforms.
For a perspective on what Enterprise Risk Management is all about, and why large and small companies should be focusing on it, listen to this Analyst Chat entitled: An Enterprise Risk Management Primer.
As recent attacks have shown, the risk of purchasing hardware and software with deliberately built-in weaknesses is much higher than previously thought. This means that managing software supply chain risks are extremely important. Find out more about this topic in this video presentation on the Necessary Components of an Effective Cyber Supply Chain Risk Management (C-SCRM).
The rapid growth, combined with the inherent complexity of cloud computing, appears to be straining the capabilities of existing governance and risk management frameworks. Have a look at this video presentation for A CSA’s Perspective on Cloud Risk Management.
For a perspective on conducting cyber risk management and the associated benefits, have a look at this video of a presentation entitled:Different (Development) Stages of Cyber Risk Management.
For a variety of views on risk management related topics, choose from the following video recordings of panel discussions at past KuppingerCole events:
- How to Position Your Governance & Risk Management Programme
- Managing Cyber Supply Chain Risks and Achieving Digital Business Resilience
- A First-Person Account of Third-Party Identity Risk Management
- Access Risk Management: Continuously Identifiying and Tracking Access Risks
Our analysts have written several blogs relating to risk management. Have a look at the list below and choose the titles that are most interesting to you or relevant to your organization:
- The need for an integrated risk management
- Does Risk Management really fail in IT Security?
- Governance, Risk Management, Compliance
- 3 Steps to Improve Your Cybersecurity with Enterprise Risk Management
- The economic turmoil - and its relationship to IT Risk Management
- Identity Risk Management - a cool thing
- The Next Level of Zero Trust: Software Security and Cyber Supply Chain Risk Management
There are several webinars that cover topics relating to risk management. Have a look at the following list and choose the most relevant for your organization:
- Managing Risk in Ever-Changing As-a-Service Environments
- Access Risk Management for SAP and Beyond
- Prepare for PSD2 with Strong Customer Authentication, Fraud Risk Management and Open Banking APIs
- Holistic Approach to Cyber Risk Governance in the GDPR Era
Organizations investing in technologies to support risk management can have a look at some of the related technology solutions that we have evaluated: