Developers are often encouraged to fully understand the risk management process before initiating any new development project. However, most developers don’t clearly understand what makes up this process or where to begin. As technology risk management (TRM) is a relatively new field and few clear best practices, it may be challenging to find good guidance for implementing and defining an effective program. Five key factors need to be considered when establishing a technology risk management program:
1) Establish a risk management policy
A formal risk management policy is essential for effective TRM. The policy should spell out the TRM approach taken by the organization. It should also identify staff members responsible for implementing and monitoring TRM within the organization, define the types of risk that fall within the scope of TRM, and indicate how risks will be identified and assessed. The policy should also include a commitment to maintaining confidentiality regarding risk information not to put individuals at risk from criminals or terrorists.
- A formal statement of what is acceptable in terms of risk in an organization
- Staff responsibilities concerning risk management
- The types of risks that need to be managed
- How risks will be identified, assessed and monitored
2) Identify and assess risks
Once a risk management policy is in place, the next step is to identify and assess the risks that need to be managed. You can do that by conducting a risk assessment or using a risk assessment tool. A risk assessment involves identifying all potential risks and assessing their likelihood and impact. The assessment should include both internal and external risks, as well as those that are specific to information and communication technologies. It is critical to remember that you cannot eliminate all risks, so it is necessary to prioritize them and focus on those that pose the greatest threat.
3) Develop and implement risk treatment plans
Once you have identified and assessed the risks, it is necessary to develop and implement risk treatment plans. That involves taking action to reduce the likelihood and impact of risks. However, there is no single treatment for all risks. Each risk would require a different response based on the nature of the threat it presents and its potential consequences if it were to occur. For instance, through the MAS TRM service, you can reduce risks such as information theft by implementing appropriate security measures such as encryption and firewalls. In contrast, you can address other risks such as natural hazards by taking out an insurance policy or building extra strength into new buildings against earthquakes and floods. However, there are other risks, such as terrorist attacks, which you cannot effectively control since they are unpredictable, and their target could potentially change from one day to the next. Therefore, the best course of action is to develop focused risk treatment plans so that effort is not wasted on measures that do not apply to a particular risk.
4) Monitor and review risks and risk treatments
Once the risk treatment plans have been developed, it is important to monitor and review them constantly to ensure effectiveness. That involves tracking the occurrence of risks and how well the treatment plans reduce their likelihood and impact. It is also necessary to revise the plans as new information becomes available about specific risks or changes within the organization that may affect the risk profile.
5) Train staff in risk management procedures
All the organizational employees need to receive training on identifying and assessing risks and how to implement and monitor TRM procedures. That assists in ensuring that everyone works on the same page and that best practices are followed. It also enhances staff members’ knowledge and skills, making it easier to adapt to changing circumstances.
Organizations should ensure their staff understand how to identify risks and the types of risks they might encounter during their work. Internal auditors can play an important role in this respect by assessing security readiness and providing advice on what could be done to improve it further.