“You can never protect yourself 100 per cent. What you do is protect yourself as much as possible and mitigate risk to an acceptable degree. You can never remove all risk.” So said Kevin Mitnick, arguably the world’s most famous hacker.

Indeed, the ever-presence of risk makes performing IT risk assessments critical for every business. An IT risk assessment is the process by which a company identifies its valuable data assets, establishes the business impact of having these data assets compromised, determines the threats that can likely cause a compromise, and analyses the vulnerabilities that an attack vector can exploit. Here’s a step-by-step outline of how to perform an effective IT risk assessment.

1. Identify all valuable data assets. Companies need to identify which data assets are valuable by first understanding the nature of their business. Many companies would consider things such as client contact information, product design files, trade secrets and roadmap documents their most important assets. Regardless of the type of data companies identify as critical, however, it’s necessary for them to understand how all of this critical data flows in their networks and identify which computers and servers are used to store this data. For smaller companies, this information is usually available with the top executives. For larger companies, this information may be available with each department’s head.
2. Estimate business impact due to loss. Risk and impact assessments have to go hand in hand. For each data asset, the corresponding negative financial impact of a compromise has to be estimated. Apart from direct costs, the negative impact can also include intangible costs such as reputational damage and legal ramifications.
3. Determine threats to the business. A threat is anything that has the potential to cause harm to the valuable data assets of a business. The threats companies face include natural disasters, power failure, system failure, accidental insider actions, malicious insider actions and malicious outsider actions.
4. Analyse vulnerabilities. A vulnerability is a weakness or gap in a company’s network, systems, applications, or even processes which can be exploited. Vulnerabilities can be physical in nature, they can involve weak system configurations, or they can result from awareness issues (such as untrained staff). There are several scanning tools available for performing a thorough systems analysis. Penetration testing or ethical hacking techniques could also be used to delve deeper and find vulnerabilities that regular scanning might miss.
5. Establish a risk management framework. Risk is a business construct, but it can be represented by the following formula: Risk = Threat x Vulnerability x Business impact. To reduce risk, company IT teams need to minimise the threats they’re exposed to, the vulnerabilities that exist in their environments, or a combination of both. From the business side of things, management may also decide to evaluate the business impact of each data asset and take measures to reduce it. A value of the high, medium or low should be assigned for each of the variables in the formula above to calculate the risk. Using this process, a company can prioritise which data asset risks it needs to address. After this is done, a company should come up with solutions or redressal for each identified risk, and the associated cost for each solution.
6. Develop a risk appetite. Companies should now gauge themselves on what level of risk they’re comfortable taking. Do they want to address all the risks or do they only want to address risks identified as high? The answer to this question will vary from company to company.
7. Start mitigating risks. Finally, companies should invest in the right solutions and start mitigating the risks of data loss.

Making a good risk assessment better

It’s hard to identify what exactly has been stolen after a data breach. The affected company has to go through various data logs and reports to find out who accessed what, when, where and why. To put together a complete picture, the company needs to look at a host of reports from an effective security solution, and put its powers of deduction to use.