Guidelines for Effective Risk Management in the Digital Era

Guidelines for Effective Risk Management in the Digital Era
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by Sanjeev Kapoor 12 Mar 2020

The main concept of risk management dates back hundreds of years before, since the time businesses realized the importance of reducing uncertainty through proper planning of their activities. Over the years, risk management has been associated with specific activities that impact corporate planning and organization, while implementing controls over both human and financial capital. Specifically, risk management activities evaluate and analyze individual actions, towards identifying the risks that arise when each of the actions is taken.

During the last couple of decades, the risk management process has been standardized as part of risk management frameworks. Risk management frameworks provide structured ways for identifying risks and assessing their probabilities of occurrence. In the area of IT infrastructures and services, risk management frameworks have been standardized by the International Organization for Standardization (ISO) and its 27000 family of standards, which specify processes for identifying, assessing and mitigating security risks. In principle, risk management processes involve a series of steps, including:

Conventional risk management approaches have been effective for many years. However, in recent years they fall short when it comes to addressing new risks that are associated with contemporary IT infrastructures and enterprise environments.

 

Changing Dynamics and Modern Challenges of Risk Management

In recent years, enterprises must operate in more dynamic and challenging environments, which are characterized by the following properties:

 

Solutions Recommendations

Here are some guidelines about revising risk assessment frameworks and methodologies, in a direction that can effectively address the above-listed challenges:

 

Overall, risk management remains an important process for the business continuity and well-being of modern enterprises. Nevertheless, conventional risk assessment frameworks fall short when it comes to addressing risks in the scope of the modern, complex, dynamic and globalized business environments. Hence, there is a need for considering revisions and enhancement to existing frameworks and tools in order to address contemporary challenges and risks. In this context, our solution recommendations and guidelines can provide a starting point for improving your risk management processes.

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