In today's digital environment, IT risks are a persistent challenge for organisations across industries. Cyber threats, system failures, data breaches, and compliance violations can disrupt operations, damage reputations, and lead to regulatory penalties.
IT risk management is the approach organisations take to identify, assess, and mitigate these risks. With the rapid advancement of technology and growing regulatory scrutiny, businesses must adopt a proactive IT risk strategy to protect their digital assets and maintain operational resilience.
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Defining IT risk and IT risk management
A commonly used definition of risk is ‘the effect of uncertainty on objectives,’ as defined in the ISO 31000 Risk Management Guidelines[1]. From this, IT risk can be understood in two ways:
- The effect of uncertainty arising from information technology on objectives.
- The effect of uncertainty on information technology objectives.
The first definition focuses on IT as causes of risk, whereas the second emphasises the impact on IT-related objectives when risks materialise. While both perspectives are relevant, IT risk management primarily focuses on the former: managing uncertainty arising from information technology on broader business objectives.
Is there a difference between IT risk and cyber risk? We think so.
IT risk is a broad category that encompasses all risks related to information technology. This includes risks related to technology failures, inadequate IT investments, inefficiencies in IT operations and compliance gaps in IT governance. In contrast, cyber risk is about specific threats against the data stored in IT systems, such as breaches, hacking, malware, and unauthorised access.
Your organisation should be clear about the definitions used around IT and cyber to ensure comprehensive governance over both IT and cyber-related risks.
Identifying and prioritising IT risks
A fundamental concept in IT risk management is the risk equation:
Threat x Vulnerability x Asset = Risk
- A threat is any event that could cause harm (e.g., cyberattacks, system failures)
- A vulnerability is a weakness that could be exploited (e.g. outdated software, misconfigured security settings)
- An asset is anything valuable to the organisation (e.g. customer data, financial records, IT systems)
This is the basis for a structured IT risk assessment that helps organisations determine which risks pose the greatest threats. Key steps include:
- Identify IT assets: Catalogue all critical data, applications, and systems
- Analyse threats & vulnerabilities: Assess potential threats and weaknesses in existing security controls
- Evaluate risk impact & likelihood: Use qualitative or quantitative risk analysis to prioritise risks
- Map risks to compliance requirements: Ensure alignment with industry frameworks (e.g. NIST, ISO 27001)
- Develop a risk treatment plan: Determine appropriate mitigation, transfer, acceptance, or avoidance strategies
IT risk controls and best practices
Risk controls in IT risk management are categorised based on their function within the risk lifecycle. These include preventive, detective, and reactive controls. Their effectiveness is determined by how they modify the likelihood and/or impact of risks.
Preventive controls
Preventive controls apply at the beginning of a risk’s life. Their primary function is to reduce the likelihood of risks occurring. Examples include:
- Access control policies: Restricting access to sensitive data and systems based on the principle of least privilege
- Data encryption: Protecting sensitive information in transit and at rest to prevent unauthorised access
- Regular patching and updates: Ensuring all software and hardware components are up to date to mitigate vulnerabilities
- Network segmentation: Isolating critical systems to prevent lateral movement of cyber threats
- Security awareness training: Educating employees on cybersecurity threats such as phishing and social engineering
Detective controls
Detective controls operate during the risk’s lifecycle, identifying risks before they escalate. They rely on data analysis to recognise risks in motion. Examples include:
- Continuous monitoring and logging: Using security information and event management (SIEM) tools to analyse real-time security events
- Anomaly detection systems: Identifying unusual network or system behaviours that could indicate a breach
- Threat intelligence integration: Leveraging external threat intelligence sources to proactively identify risks
- Regular penetration testing and audits: Evaluating security posture through ethical hacking and compliance audits
Reactive controls
Reactive controls, also known as corrective or responsive controls, come into play toward the end of a risk’s lifecycle. Their focus is on minimising impact. Examples include:
- Incident response plans: Defining structured processes for identifying, containing, and mitigating security breaches
- Disaster recovery and business continuity management: Ensuring rapid system restoration in case of cyberattacks or it failures
- Automated patch management: quickly addressing vulnerabilities to prevent exploitation
- Backup and recovery strategies: implementing reliable data backups to prevent loss and ensure system resilience
By integrating these controls into IT risk management strategies, organisations can enhance their ability to prevent, detect, respond to, and manage IT risks effectively.
IT risk management frameworks and compliance
Organisations can align their IT risk programs with globally recognised frameworks to strengthen governance and compliance. Some frameworks focus specifically on IT risk, some address cyber risk, and some cover both domains.
- NIST Cybersecurity Framework (CSF)
The NIST CSF provides structured guidelines for managing cybersecurity risks through five key functions: Identify, Protect, Detect, Respond, and Recover[2]. While primarily focused on cybersecurity, it also overlaps with IT risk management.
- ISO 27001
ISO 27001 is an international standard for information security management systems (ISMS), offering a systematic approach to managing IT-related risks (source). It ensures organisations implement strong information security controls, covering both IT risk and cyber risk.
- COBIT (Control Objectives for Information and Related Technologies)
COBIT is a governance framework that helps organisations optimise IT risk management, aligning IT processes with business objectives[3]. It focuses on IT governance and controls but also includes methodologies that apply to cybersecurity.
- CIS Controls
The Center for Internet Security (CIS) Controls are a set of best practices designed to enhance cybersecurity resilience[4]. These controls help organisations mitigate common cyber threats by establishing security benchmarks across IT environments. They focus primarily on cyber risk.
- NIST 800-30
NIST Special Publication 800-30 is a dedicated risk assessment guideline specifically tailored for IT risk management[5]. Unlike the NIST CSF, which takes a broader cybersecurity approach, NIST 800-30 provides a detailed methodology for assessing risks across IT assets.
Emerging trends in IT risk
The IT risk landscape is constantly evolving. Organisations must prepare for new challenges and opportunities by understanding the latest developments in technology, cybersecurity, and regulatory requirements.
- AI and machine learning
Artificial intelligence (AI) and machine learning (ML) are transforming IT risk management by automating threat detection and enhancing predictive analytics. However, organisations must also assess the risks associated with AI itself, including algorithm bias, adversarial attacks, and regulatory compliance.
- Third-party & supply chain risks
As businesses increasingly rely on external vendors and cloud-based services, third-party risk management (TPRM) has become critical. Automated risk management platforms and real-time monitoring tools can help organisations maintain visibility into their extended ecosystem.
- Cloud security and zero trust architectures
The widespread adoption of cloud computing has introduced new security challenges. The Zero Trust security model, which assumes that threats exist both inside and outside the network, requires organisations to verify every user and device before granting access to sensitive data[6].
- Regulatory evolution and compliance pressures
Governments and regulatory bodies are continuously updating cybersecurity and data protection laws in response to evolving threats. Automation and governance, risk and compliance (GRC) platforms can streamline compliance efforts, reducing the administrative burden of audits and regulatory reporting.
Conclusions and next steps for your organisation
As technology advances and threats evolve, organisations must take a proactive approach to managing IT and cyber risks, ensuring they remain resilient against disruptions, regulatory changes, and emerging attack vectors.
Protecht ERM provides a comprehensive IT and cyber risk management solution, enabling organisations to:
- Centralise IT risk management with a unified platform for risk identification, assessment, and mitigation
- Streamline compliance and governance, aligning with leading frameworks like NIST CSF, ISO 27001, and APRA CPS 234
- Enhance security and resilience with real-time monitoring, automated risk controls, and advanced reporting
- Integrate cyber risk management seamlessly, mapping IT risks to controls, obligations, incidents, and third-party risks
With Protecht ERM, you can transform your IT and cyber risk approach, moving beyond reactive management to a fully integrated, data-driven, and proactive strategy:
