As businesses continue to undergo digital transformation, cybersecurity must be included in enterprise risk management. Without a comprehensive ERM program, organizations have no way to identify and assess the relationship between cyber risk and its impact on the business. For this reason, integrated risk management has become a popular process for managing the risks facing an organization, and is the new method of choice for business leaders and security managers alike.
What is enterprise risk management (ERM)?
Enterprise risk management (ERM) is the process of identifying and understanding the risks that threaten standard business operations. This involves risk prioritization, as well as the planning and preparation necessary for responding to those risks.
For businesses, risk generally refers to the likelihood of an external force causing damage to corporate assets. Examples include a natural disaster damaging a warehouse or a potential economic downturn affecting revenue. In order to successfully manage risk, you have to have a complete understanding of everything that’s happening across your organization, as well as any external factors that may impact it.
Why is cybersecurity important to enterprise risk management?
It’s important to know that cybersecurity is a problem that will never be solved, but rather, a risk to be managed. In the digital age, cyber risk has become an issue for the entire business, not just the tech or IT department. By looking at risks from a business perspective, executives can make decisions with both protection and operational success in mind.
To evaluate the cyber risks facing an organization, you must understand the impact that each will have. By including relevant business context in cyber risk analysis, you can more effectively prioritize risks and next steps. As organizations increasingly rely on technology for their day-to-day operations, cybersecurity has become essential to comprehensive enterprise risk management.
Advantages of including cybersecurity in your enterprise risk management (ERM) program
The argument for an enterprise risk management program has already been made. The challenge now is to convince your executives that cybersecurity should be included in the ERM planning process.
Let’s take a look at three advantages of working cybersecurity measures into your enterprise risk management program:
1. Align more closely with strategic business objectives
Cyber risk management programs are often built around meeting compliance standards and regulations, which can make it difficult to align with the needs of the business. By making cybersecurity a business issue, security and business leaders can create an ERM that more accurately serves the greater goals of the organization.
2. Focus on the risk profile unique to your organization
With emerging technologies designed to increase efficiency, each organization’s ERM program should be unique to serve their specific operational needs. A business’s technology needs are not universal, and what works for one organization might not work for another. An integrated risk management approach allows organizations to focus on the threats specific to their organization, as opposed to just following broad industry compliance standards.
3. Increased visibility and transparency
Comprehensive visibility and transparency into the enterprise makes it easier to identify connections between risks and impact, and assess the threats facing your organization.
How to get the most out of your enterprise risk management (ERM) platform
Many organizations already have the information required to create a business context within an enterprise. Initiatives like meeting compliance standards, business continuity, disaster recovery, and data protection work together to highlight threats and their potential impact. The problem arises when organizations try to efficiently manage all of that data and turn it into actionable intelligence.
A cyber risk management platform can help facilitate this process by putting all of the data necessary for risk evaluation in one place, making it easier to identify connections between threats and predict the scope of impact.
Here are a few best practices to keep in mind when looking for an enterprise cyber risk management platform:
Quantification and measurement
Quantification is key when building an enterprise risk management program. You cannot manage what you don’t measure, so you must be able to quantify the cyber risks facing your organization in terms of definite numbers, figures, and percentages. The data should be jargon-free and simple to understand so that the entire C-Suite and stakeholders can easily review relevant insights and ensure everyone is aligned.
Use all data
An enterprise risk management program that does not take advantage of all available data will not be as successful at mitigating risk. When information is separated into silos, it can lead to unexpected threats or an underestimated exposure to risk. Aggregating all of the data allows for maximum visibility and enables security managers to highlight opportunities and connections across the enterprise.
Effective comparisons
Comparing your organization’s risk management program to those of your competitors can give you a better understanding of its efficacy. This way, you can deep dive into any issues that may be affecting your industry and better prevent them from impacting your business operations.
Leverage threat intelligence
An ERM platform should empower organizations to proactively address cybersecurity and utilize all available threat intelligence, both past and present, to identify threats and other malicious activity. By understanding what has and hasn’t worked before, and what risks are common within your organization or industry, you can create a strong, informed foundation to build your ERM program off of.
Manage your third-party vendors
Most organizations rely on third-party vendors to carry out day-to-day operations, so it’s important to consider the additional risk that they may pose to your network. Your ERM platform should help you to identify any low performing vendors and make risk connections across groups of companies. This will allow you to actively manage third-party risk.
How SecurityScorecard can help with enterprise risk management (ERM)
A cyber risk management platform should combine all of the data necessary for building an effective enterprise risk management program, including both business and IT sources. SecurityScorecard utilizes security ratings, threat reconnaissance, compliance standards, and vendor risk management to provide security managers with everything they need to make important connections within the enterprise, between risk and impact.
This helps security managers prioritize vulnerabilities and provides them with the insights needed to determine the next steps. A data-centric approach to enterprise risk management creates a common ground for executives and security managers that encourages collaboration across the entire organization.
