Assessing digital risk goes beyond the cyber security strategy.

INSIGHTS BLOG

Assessing digital risk goes beyond the cyber security strategy.

May 2022 - Michael Simkovic, Chief Executive Officer, CSO Group

As we continue to transition to a digital economy, businesses face growing pressure to keep pace with their competitors with the focus of simultaneously driving costs down and value up.

As we are all required to find ways to deliver more with less, digital transformation is often one of the ways to meet this need. More often than not, we are so focused on the function of transforming that we do not consider the risks and net benefits of its objective ....

"Innovate or die", is an expression often used and for very good reason. If businesses stay stagnant, then they will be overtaken and lose relevance. The challenge on top of this, is the pace of change and innovation necessary within the digital marketplace and accessing knowledge and resources to do this successfully. All the while, maintaining a strong customer experience and satisfaction.

While companies continue to digitise and transform their operations, they also inevitably open themselves up to increased risks, and more often cyber risks, including the potential for cyber criminals to identify and exploit gaps in the security posture. While cyber security is undoubtedly a critical defence for organisations, business leaders tend to focus aggressively on this element alone, potentially missing the possibility for other operational threats to arise.

Taking a holistic approach to risk

To truly understand and assess the potential digital threats an organisation faces, there are three distinct pillars that must be acknowledged: cyber risk; digital operations; and digital value creation risk, or lack thereof.

While cyber risk is still a significant and critical part of the discussion, it's often used interchangeably with threats when in reality, it only forms one third of that three pillar digital risk conversation. Ultimately, organisations need to be cognisant of potential issues they face in terms of their underlying digital operations and digital value creation to truly understand their security profile and take informed steps to reduce or prevent damage.

Business leaders need to take a holistic approach to risk. So, while they might not be able to protect everything, they can learn how to prioritise the most critical information, data and systems to protect by taking a step back from cyber security risk specifically to evaluate risk across the business on a broader scale. Understanding your risk through effective understanding, visibility and detection, allows executives to define and manage the organisation's risk tolerance.

For example, organisations around the globe are making progress in their digital transformation journeys, with many leveraging tools like artificial intelligence (AI) and automation to help streamline their operations. However, bringing new solutions into the technology stack can increase threats in terms of change management and access control. Business leaders therefore need to consider the broader picture, taking into account any potential complications facing operations, should the technology be implemented. Taking a holistic approach to risk prevention in this instance, would mean assessing the technology not only for its security posture, but also evaluating any liability posed to the underlying digital operations of the organisation.

Additionally, having a clear understanding of any risks that new tools pose to digital value creation is also essential. For example, businesses are turning to AI and automation to help analyse and assess vast amounts of data to derive more actionable insights. But are they asking the critical questions at the outset to impact the strategic value of the output? Specifically, have they carefully considered the difference between having and understanding of the data, versus understanding why the business has the data in the first place and how it can be used?

Many organisations are digitalising and migrating swathes of outdated data to the cloud and calling it digital transformation. However, without understanding what the data is and why it's there, organisations will very easily waste time, money, and other resources on managing and maintaining data for no strategic reason. This detracts from a workers' abilities to invest their time and resources into other activities that have the potential to bring more value to the company. Needless to say, the potential impact on productivity risk alone should be a critical consideration upfront.

Where to start

Overall, digital transformation and the move to cloud is little more than organisations adapting to a new way of working. As with anything new, it's essential that organisations and business leaders take the time to assess how to optimise, sustain, and futureproof their operations. This means accepting and understanding that while new ways of working can provide rich opportunities for business growth and success, assessment of business risk is an essential part of the process.

Risk is not an IT or Cyber security problem, it's a business problem.

It's essential that business leaders recognise cyber risk as only part of the puzzle. Leaders should be taking a deeper look into how transforming digital processes will impact elements like workflows and head count, as well as the use (or misuse) of new tools and technologies.

A broader evolution needs to take place to help direct risk management from the top down. Ultimately, the responsibility needs to shift and evolve to rest on the shoulders of a business leader or executive, focusing more holistically on security across those three distinct pillars.

You can start with asking the questions: is our organisation truly understanding and managing the full gamut of digital risk, or do we have tunnel vision around the cyber security elements only?

CSO Group provides organisations with effective cyber security services, risk management, and protection. For more information or to find out how CSO Group can assist you, please contact the CSO team at: info@csogroup.com.au