What Is An IT Risk Assessment? (Components And Benefits)

Updated 29 September 2022

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Maintaining security is one of the primary responsibilities of an organisation's IT department. Performing risk assessments can assist an IT department in identifying its weaknesses and meeting cyber security requirements. Learning about risk assessment can help you discover what the IT department does to maintain security.

In this article, we define IT risk assessment, discuss its components, explain its benefits and share steps to perform such an assessment.

What Is An IT Risk Assessment?

An IT risk assessment involves detecting and evaluating security threats. It helps the IT team identify internal and external risks that may cause vulnerabilities. The team assesses the effects that software, personnel and external services have on the availability, confidentiality and integrity of data. With the data an IT team gains from the risk assessment, it can design additional data protection policies to counter the risks.

Such an assessment aims to mitigate risk to prevent security incidents and compliance problems. As it may not be possible to eradicate all security threats, IT professionals utilise security risk assessment to focus on and mitigate as much risk as possible. Preparing for potential dangers can assist a team in reducing their overall susceptibility if they regularly conduct risk assessments.

Components Of Risk Assessment For IT

Following are the key components of a risk assessment for IT professionals:

Threats

Threat frequency measures how often IT teams anticipate unfavourable events to happen. A system data breach that makes private information public or releases private employee files to the public may pose threats. Threats are not definite events, but they do have a chance of occurring in the system's current state.

Vulnerabilities

A vulnerability is a system's weakness that external or internal factors can exploit. Compared to threats, vulnerabilities require the intervention of other malicious forces to turn into a threat. IT departments assess vulnerabilities by analysing the organisation's security environment and the speed with which they can mitigate a threat in the event of a data breach or information leak. Vulnerabilities also account for internal threats, such as an employee using their information to pose a threat to security control.

Impacts

The impact is the total amount of harm that may accrue to the organisation if hackers exploit the vulnerabilities to turn them into threats. A data breach, for instance, may reduce productivity within the affected department and expose personal information to hackers. During risk assessments, IT departments measure potential impacts to determine the importance of assessing certain threats and the efficacy of threat prevention.

Likelihood measurements

Measurements of likelihood are the probabilities that certain vulnerabilities can develop into active threats. For instance, if an IT department creates an extremely stable web application that has never experienced a data breach in its five-year history, the likelihood measurement of the website's vulnerability becoming a threat is low. Likelihood measurements, impacts, vulnerabilities and threats range on a custom, logic-based scale.

Assets

Assets represent the monetary effects that security incidents can have on a system. This measurement includes hard and soft costs, such as lost business and reputation loss due to a cyber-attack. In addition to lost assets, data loss, system downtime and legal consequences can incur additional expenses.

Risk assessment formula

The IT teams evaluate multiple components of the risk assessment formula to estimate risk. They utilise the risk assessment formula, which is a conceptual construct rather than a quantitative formula, to examine the state of their systems. Here is the risk evaluation formula:

Risk = Threat x Vulnerability x Asset

IT departments utilise such methods to assess the department's existing risk logically. For instance, the vulnerability and threat levels may be high if a website lacks a firewall or antivirus. If the website's assets are crucial to the operation of a department or organisation, the website's risk level may also be high.

Benefits Of Such Risk Assessments

Here are some of the key benefits of performing a risk assessment:

Understanding risk profiles

Identifying threats and grading the risk associated with each factor generates a comprehensive risk profile. Understanding risk profiles can assist the IT team in allocating resources and personnel to solving problems and maintaining security. Risk profiles also provide the IT department with specific details about potentials threats, such as:

Likelihood of the threat materialising
Source of the threat and whether it is internal or external
Impact analysis for each threat
Reason for the risk

Identifying vulnerabilities

In a well-established environment, assessing risk can lead to identifying and correcting vulnerabilities. Some external influences, such as hackers, may exploit and assault a system. Periodic system audits can help in identifying and resolving uncovered issues.

Inventorying data assets

It is difficult for a team to make strategic measures to safeguard a system if they do not know what assets they are trying to protect. Understanding the relative importance of various assets can help a team decide which security elements to upgrade immediately and which can wait. Some assets may not require any security changes, which can save time.

Saving costs

Periodically assessing IT risk can help a business eliminate inefficient spending. For instance, if the team employs an outdated antivirus product and a newly installed, comprehensive firewall, the antivirus programme may no longer be necessary with a more effective security solution. Eliminating risks can assist a team in achieving a balance between benefits and expenses and identifying the biggest risks and eliminating them.

Complying with legal requirements

Many firms adhere to privacy and data security regulations. For instance, health care businesses comply with legal regulations, which regulate how companies use sensitive personal data. Many regulatory obligations also mandate that firms do frequent security risk assessments to evaluate the efficacy of all current protections.

How To Perform An IT Risk Assessment

Consider the following steps to perform the risk assessment of your IT department:

1. Identify and prioritise assets

Start the assessment by listing all IT department assets, such as servers, customer information, contract documents and databases. As perceived values may vary between the IT team and management, work with business leaders to decide which assets have the highest priority and deserve the most security. If possible, try to collect the following information for each asset:

Hardware and software components
Involved interfaces
Functional requirements
Security policies
Security architecture
Network topology
Information storage protection
Environmental security protocols
Technical security controls

As many businesses have a limited budget for risk assessment, choose which assets to evaluate. Define a system for ranking your current assets, including monetary value, legal priority and organisational significance. After your team and management have evaluated the asset security prioritisation, divide each asset into urgent and non-urgent categories.

2. Understand threats

When the team has defined each asset, explore the threats that may cause issues to IT systems. The typical threat categories are natural disasters, software or hardware failure and internal or external interference. Understanding the threats associated with a specific asset can help determine the potential vulnerabilities and required protection.

3. Locate possible vulnerabilities

Start searching for potential vulnerabilities within the assessed systems. The IT team may efficiently identify many vulnerabilities with audit reports, management analysis, vendor data, penetration testing and automated scanning tools. Identifying physical and human vulnerabilities outside the domain of software and data may require further on-site study. For instance, if the server is in the basement, it may be more susceptible to floods.

4. Analyse current control plans

Analyse your team's existing control plans if a vulnerability becomes a threat. Plans for technical control may include data encryption, authentication systems or automated scripts for intrusion detection. Controls against physical threats may include a server relocation, personnel training, security regulations or administrative actions. Preventive controls attempt to predict and prevent attacks, whereas detective controls identify dangers and depend on internal teams to eliminate or prevent them.

5. Determine current threat likelihoods and impacts

As your team finds the control plans linked with assets, quantify current risk using the risk assessment formula. As the formula is logical rather than mathematical, you may plan team meetings to analyse the assets and their potential weaknesses. Determining threat probabilities and consequences can assist your team in choosing which threats have the highest priority and which have lower priority. The team can also quantify estimated impacts as high, medium or low using business impact analysis reports.

6. Prioritise and implement new controls

Once your team has prioritised risks, create new control mechanisms for each risk element, from the highest to the lowest. Like the risk assessment formula, rank each controlling priority logically as high, medium or low. Some basic guidelines for each control level are as follows:

High: The new control strategies for these actions require immediate development plans.
Medium: Although significant, the implementation durations for corrective strategies for these assets can last for a few weeks or months.
Low: These control plan priorities are not urgent and the team is free to choose whether to take corrective action.