Risk management: What is it and does it matter?

Risk management is the art of identifying risks to your organization and reducing the likelihood of them becoming a problem. Those risks could come from anywhere. But when your business relies on IT systems to any degree, your network security should become a key point of concern. 

It isn’t just important to understand what risk management is. You need to know why it matters too. By building your knowledge, you can protect your business in a world of ever-growing threats.

Protecting your business against adverse IT events

Your business’s IT systems are under constant threat from adverse IT events. This sometimes comes in the form of others trying to cause harm. Even if someone hasn’t managed to gain access to your IT systems illegally yet, that doesn’t mean they’re not trying. It’s also worth knowing that adverse IT events are becoming more common. For example, in the first half of 2019, there was a 77% increase in ransomware attacks.

Risk management professionals can identify potential flaws in your IT systems. They’ll then introduce ways to reduce the risks that they pose, without disrupting the flow of your usual business activities.

Helping your employees become less risky

Although you may appoint someone to oversee your risk management activities as a whole, it’s actually everyone’s business. One of the biggest threats to your network’s security is your employees. In fact, 90% of data breaches arise because of human error.

Risk management involves identifying areas where your employees may fall short. The right person will spot patterns in your employees’ behavior and work toward addressing them so they’re no longer an issue. Additionally, your risk management team will help to educate your employees on potential risks so they can do some of the work for themselves.

Reducing unexpected events

When you’re not managing risks in your company, you’re leaving yourself open to unexpected events. The analysis part of any risk management plan can be quite revealing. It identifies areas where you may be letting your guard down too much, without realizing it. 

A great example of this is a significant data loss that comes from adverse weather events. If an adverse event such as a storm or a fire burns through most of your IT systems and you didn’t think to set up an offsite backup beforehand, you’ll find yourself dealing with an unexpected massive loss. By using risk management to identify potential problems, you can significantly reduce the risk of an unexpected event happening. 

Guarding your reputation

The chances are, an adverse IT event won’t just affect you. It’ll affect those who place their trust in your business. For example, if you have customers who make purchases via your online store, you need to protect their financial information. Or if clients entrust you with information about their project, you need to keep it top secret.

Suffering from a data breach that compromises someone else’s information can harm your reputation beyond repair. This is especially the case when an investigation finds that no risk management took place. By managing risks, you can guard your reputation and keep your clients’ trust.

Risk management gives you your best chance of guarding your organization against potential IT threats. In addition to creating a plan now, you need to remain mindful of the fact that those threats could change in the future. By treating your plan as a fluid document, you can prevent unwanted surprises.