The fact that ICT risks have become an increasingly critical part of an organization's risk management has not gone unnoticed. However, many companies still suffer from siloed thinking in risk management, where each risk is treated as an isolated event rather than part of a whole. By creating a unified perspective, you achieve more effective management of the risks in your organization. Here is how you should think to succeed.
ICT risks span a broad spectrum; from cybersecurity threats to data loss and business interruptions. When an organization is affected, it impacts not only the technical infrastructure but also the company's reputation, legal compliance, and especially financial resources—areas that have a significant long-term effect on the business.
ICT risks compared to other risks
Relative to other risks that traditionally characterize an organization, ICT risks can still be treated as less important or likely for the company in question. Financial risks (such as liquidity risks or market risks) or operational risks (e.g., related to production, suppliers, or labor) tend to be valued higher, especially in certain sectors.
These types of risks have immediate consequences for profits and profitability and have historically been given high priority due to their visibly concrete impact on the business. Business leaders may feel they have greater control over these economic and operational risks through established risk management methods and insurances.
ICT risks, on the other hand, may be perceived as more complex and harder to predict and control, especially considering the rapid development in technology and cyber threats. It may take time for companies to adjust their risk management culture and processes accordingly.
The domino effect of ICT risks on society
A clear example of how ICT risks are directly linked to the rest of the business's profitability and reputation is the attack on a cash register system provider in the summer of 2021 in Sweden, which resulted in approximately 800 affected grocery stores being unable to open for several days. This demonstrates how cyberattacks directly cause both business disruptions and extensive financial losses, while also limiting the availability of essential goods and services in people's everyday lives. A clear proof of how an ICT risk not only affects the targeted organization in question but also the broader economy.
The importance of the big picture
For ICT risks to be accorded the same dignity and priority as other risks, an attitude and strategy that encompass the entire organization are required. To succeed, it is essential to break down silos between departments and allocate responsibility where each person plays a significant role in the collective effort.
The organization's leadership must also establish common goals, identify and assess risks in a holistic manner.
The organization's leadership must also establish common goals, identify and assess risks in a holistic manner, and develop risk management strategies that are linked to the company's overall business objectives. Technology also plays a crucial role in this, enabling everything from efficient data collection to trend analysis and real-time monitoring of threats. Common systems and tools for this purpose can effectively support communication and collaboration across departmental boundaries.
How to allocate roles and responsibilities
To effectively integrate ICT risks into the overall risk management, various departments and roles need to be involved. This includes everyone from IT to risk managers, lawyers, and finance- and business-focused roles. A key factor is ensuring that the leadership is fully engaged and supports each department and operation in their work. This promotes a culture where risk awareness is part of every employee's responsibility.
How a unified risk management system contributes to success
A dedicated risk management system is also necessary to improve the organization’s collective work by streamlining the process of risk identification and management. The system facilitates, among other things:
Consolidated Risk Information:
The system collects and stores data about risks from the entire organization in a central database. This provides management with a comprehensive view of all identified risks, their prioritization, and the measures and responsibilities assigned to each risk.
Standardized Processes:
With common procedures for categorizing, assessing, prioritizing, and analyzing risks, you can more easily compare all the organization's risks and make more informed decisions about how they should be handled.
Automated Reporting:
A risk management system often contains advanced tools for reporting and analysis, allowing you to automatically generate reports on risk exposure, trends, and the effectiveness of your actions. This saves both time and resources, while providing valuable insights for the entire organization.
Decision Support:
By providing a clear and current view of your entire risk landscape, the system also facilitates decision-making. It becomes easier for management to prioritize different initiatives, allocate resources effectively, and make strategic choices that reduce risks and capitalize on opportunities.
Do you want to know more about what a risk management system can do for your organization? Read more about Stratsys' products for GRC management here.
