Topics Learning Objectives Introduction to risk management Risk Identification Risk Assessment Risk Control Strategies Quantitative versus Qualitative Strategies
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Learning Objectives Upon completion of this material, you should be able to: Define risk management, risk identification, and risk control Describe how risk is identified and assessed Assess risk based on probability of occurrence and likely impact Explain the fundamental aspects of documenting risk via the process of risk assessment
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Learning Objectives Describe the various risk mitigation strategy options Identify the categories that can be used to classify controls Recognize the existing conceptual frameworks for evaluating risk controls and formulate a cost benefit analysis Describe how to maintain and perpetuate risk controls
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Topics Learning Objectives Introduction to risk management Risk Identification Risk Assessment Risk Control Strategies Quantitative versus Qualitative Strategies
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Critical Characteristics of Information The value of information comes from the characteristics it possesses. When a characteristic of information changes, the value of that information either increases, or, more commonly, decreases. C.I.A triangle Confidentiality Integrity Availability / Accuracy / Authenticity Principals of Information Security, Fourth Edition 6 Confidentiality Information has confidentiality when it is protected from disclosure or exposure to unauthorized individuals or systems. Confidentiality ensures that only those with the rights and privileges to access information are able to do so. When unauthorized individuals or systems can view information, confidentiality is breached. To protect the confidentiality: Information classification Secure document storage Application of general security policies Education of information custodians and end users Principals of Information Security, Fourth Edition 7 Integrity Information has integrity when it is whole, complete, and uncorrupted. The integrity of information is threatened when the information is exposed to corruption, damage, destruction, or other disruption of its authentic state. Corruption can occur while information is Being stored Transmitted File hashing is an effective protection method for integrity check
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Availability / Accuracy / Authenticity Availability enables authorized users or computer systems to access information without interference or obstruction and to receive it in the required format. Information has accuracy when it is free from mistakes or errors and it has the value that the end user expects. Authenticity of information is the quality or state of being genuine or original, rather than a reproduction or fabrication. Information is authentic when it is in the same state in which it was created, placed, stored, or transferred.
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Overview of Risk Management Information security managers and technicians are the defenders of information. The many threats discussed in Chapter 2 are constantly attacking the defenses surrounding information assets. Defenses are built in layers, by placing safeguard upon safeguard. The defenders attempt to prevent, protect, detect, and recover from a seemingly endless series of attacks. Moreover, those defenders are legally prohibited from deploying offensive tactics, so the attackers have no need to expend resources on defense. Principals of Information Security, Fourth Edition 10 Overview of Risk Management Know yourself: identify, examine, and understand the information and systems currently in place Know the enemy: identify, examine, and understand threats facing the organization Responsibility of each community of interest within an organization to manage risks that are encountered Community of interest: people in an organization with (possibly) different roles but a shared goal
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The Roles of the Communities of Interest Information security, management and users, and information technology all must work together Communities of interest are responsible for: Evaluating the risk controls Determining which control options are cost effective for the organization Acquiring or installing the needed controls Ensuring that the controls remain effective
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The Roles of the Communities of Interest Information security, management and users, and information technology all must work together, but lead by information security community. Management review: Verify completeness/accuracy of asset inventory Review and verify threats as well as controls and mitigation strategies Review cost effectiveness of each control Verify effectiveness of controls deployed Control: A safeguard or counter measure. A security mechanism, policy, or procedure that can counter system attack, reduce risks and resolve vulnerability Principals of Information Security, Fourth Edition 13 Paradigm Shift - What is it? A paradigm shift or revolutionary science is, according to Thomas Kuhn, in his influential book The Structure of Scientific Revolutions (1962), a change in the basic assumptions, or paradigms, within the ruling theory of science. • Kuhn argues that scientific advancement is not evolutionary, but rather is a "series of peaceful interludes punctuated by intellectually violent revolutions", and in those revolutions "one conceptual world view is replaced by another". Principals of Information Security, Fourth Edition 14 Paradigm Shift - What is it? Moving from one thought system to another! Above From: http://www.taketheleap.com/define.html Albert Einstein: “We can't solve problems by using the same kind of thinking we used when we created them.” For information security, it is about how and what we think of risks around us and how to control them! Principals of Information Security, Fourth Edition 15 Components of Risk Management Risk identification is the examination and documentation of the security posture of an organization’s information technology and the risks it faces. Risk assessment is the determination of the extent to which the organization’s information assets are exposed or at risk. Risk control is the application of controls to reduce the risks to an organization’s data and information systems. Principals of Information Security, Fourth Edition 16 Components of Risk Management
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Topics Learning Objectives Introduction to risk management Risk Identification Risk Assessment Risk Control Strategies Quantitative versus Qualitative Strategies
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Risk Identification Risk identification involves identifying, classifying, and prioritizing an organization’s assets A threat assessment process identifies and quantifies the risks facing each asset Components of risk identification: People Procedures Data Software Hardware Principals of Information Security, Fourth Edition 19 What is a risk ?
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Components of Risk Identification
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Plan and Organize the Process First step in the Risk Identification process is to follow your project management principles Begin by organizing a team with representation across all affected groups The process must then be planned out – Periodic deliverables – Reviews – Presentations to management Tasks laid out, assignments made and timetables discussed Principals of Information Security, Fourth Edition 22 Categorizing system components
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Asset Identification and Inventory Iterative process; begins with identification of assets, including all elements of an organization’s system (people, procedures, data and information, software, hardware, networking) Assets are then classified and categorized
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People, Procedures, and Data Asset Identification Human resources, documentation, and data information assets are more difficult to identify SPOF (Single Point of Failure) are important to know Important asset attributes: People: position name/number/ID; supervisor; security clearance level; special skills Procedures: description; intended purpose; what elements it is tied to; storage location for reference; storage location for update Data: classification; owner/creator/ manager; data structure size; data structure used; online/offline; location; backup procedures employed Principals of Information Security, Fourth Edition 25 Hardware, Software, and Network Asset Identification What information attributes to track depends on: Needs of organization/risk management efforts Preferences/needs of the security and information technology communities Asset attributes to be considered are: name; IP address; MAC address; element type; serial number; manufacturer name; model/part number; software version; physical or logical location; controlling entity Automated tools can identify system elements for hardware, software, and network components
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Data Classification and Management Variety of classification schemes used by corporate and military organizations Information owners responsible for classifying their information assets Information classifications must be reviewed periodically Most organizations do not need detailed level of classification used by military or federal agencies; however, organizations may need to classify data to provide protection Principals of Information Security, Fourth Edition 27 Data Classification and Management cont.d The corporate information classifications are as follows: Confidential: Used for the most sensitive corporate information that must be tightly controlled, even within the company. Access to information with this classification is strictly on a need- to- know basis or as required by the terms of a contract. Information with this classification may also be referred to as “ sensitive” or “ proprietary.” Internal: Used for all internal information that does not meet the criteria for the confidential category and is to be viewed only by corporate employees, authorized contractors, and other third parties. External: All information that has been approved by management for public release.
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Data Classification and Management cont.d US Military uses a 5 level classification Top Secret data: “ Any information or material the unauthorized disclosure of which reasonably could be expected to cause exceptionally grave damage to the national security. Examples of exceptionally grave damage include armed hostilities against the United States or its allies; disruption of foreign relations vitally affecting the national security;.” Secret data: “ Any information or material the unauthorized disclosure of which reasonably could be expected to cause serious damage to the national security. Examples of serious damage include disruption of foreign relations significantly affecting the national security; significant impairment of a program or policy directly related to the national security;.”
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Data Classification and Management cont.d Classified: Such material would cause "damage" or be "prejudicial" to national security if publicly available. Restricted: Such material would cause "undesirable effects" if publicly available. Official: Such material forms the generality of government business, public service delivery and commercial activity. OFFICIAL information must be secured against a threat model that is broadly similar to that faced by a large private company.
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Data Classification and Management cont.d Need-to-Know allows access to information by individuals who need the information to perform their work. Security clearance structure Each data user assigned a single level of authorization indicating classification level Before accessing specific set of data, employee must meet need- to-know requirement Management of Classified Data Storage, distribution, portability, and destruction of classified data Clean desk policy Prevent Dumpster diving
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Classifying and Prioritizing Information Assets Many organizations have data classification schemes E.g. confidential, internal, public data Classification of components must be specific to allow determination of priority levels Categories must be comprehensive and mutually exclusive
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Information Asset Valuation Questions help develop criteria for asset valuation Which information asset: Is most critical to organization’s success? Generates the most revenue/profitability? Would be most expensive to replace or protect? Would be the most embarrassing or cause greatest liability if revealed? Example: DB for customer billing transactions and DB for buying the cleaning supplies for the company. What is more important in terms of value of data ?
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Information Asset Valuation (cont’d.)
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Information Asset Valuation (cont’d.) Information asset prioritization Create weighting for each category based on the answers to questions Calculate relative importance of each asset using weighted factor analysis List the assets in order of importance using a weighted factor analysis worksheet
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Example of a Weighted Factor Analysis Worksheet
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Identifying and Prioritizing Threats Realistic threats need investigation; unimportant threats are set aside. Example of ‘Heartbleed’ bug on Windows or Microsoft SSL bug on Linux systems. Are they unimportant threats or no threats ? Threat assessment: Which threats present danger to assets? Which threats represent the most danger to information? How much would it cost to recover from attack? Which threat requires greatest expenditure to prevent?
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Review of Threat Classification
Any given threat may fit more than one category
This is just a “model”, helps to think, and be more comprehensive. Principals of Information Security, Fourth Edition 38 Vulnerability Identification Specific avenues threat agents can exploit to attack an information asset are called vulnerabilities Examine how each threat could be perpetrated and list organization’s assets and vulnerabilities Process works best when people with diverse backgrounds within organization work iteratively in a series of brainstorming sessions At end of risk identification process, list of assets and their vulnerabilities is achieved
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Top Computing Executives survey A study conducted in 2003 and repeated in 2009 asked the question: Based on the categories of threats presented earlier, over 1000 top computing executives were asked to rate each threat category on a scale of “not significant” to “very significant.” The data was converted to a five-point scale with five representing “very significant.” CIOs were also asked to identify the top five threats to their organizations. These were converted into weights, with five points for a first place vote and so on to one point for a fifth place vote. The two ratings were combined into a weighted rank and compared to the rankings from 2003, as shown in next table. Principals of Information Security, Fourth Edition 40 Top Computing Executives survey
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How do you know which threat exists and the ranking of the threats? Some key findings: Of the approximately half of respondents who experienced at least one security incident last year, fully 45.6 percent of them reported they’d been the subjects of at least one targeted attack. When asked what security solutions ranked highest on their wish-lists, many respondents named tools that would improve their visibility— better log management, security information and event management, security data visualization, security Respondents generally said that regulatory compliance efforts have had a positive effect on their organization's security programs.
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Topics Learning Objectives Introduction to risk management Risk Identification Risk Assessment Risk Control Strategies Quantitative versus Qualitative Strategies
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Risk Assessment Risk assessment evaluates the relative risk for each vulnerability Assigns a risk rating or score to each information asset The goal at this point: create a method for evaluating the relative risk of each listed vulnerability A single asset may have more than one vulnerability.
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Likelihood The probability that a specific vulnerability will be the object of a successful attack Assign numeric value: number between 0.1 (low) and 1.0 (high), or a number between 1 and 100 Zero not used since vulnerabilities with zero likelihood are removed from asset/vulnerability list Use selected rating model consistently Use external references for values that have been reviewed/adjusted for your circumstances
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Risk Determination For the purpose of relative risk assessment: Risk EQUALS Likelihood of vulnerability occurrence TIMES value (or impact) MINUS percentage risk already controlled PLUS an element of uncertainty
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Risk Determination Example
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Risk Determination Example
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Documenting the Results of Risk Assessment Final summary comprised in ranked vulnerability risk worksheet Worksheet details asset, asset impact, vulnerability, vulnerability likelihood, and risk- rating factor Ranked vulnerability risk worksheet is initial working document for next step in risk management process: assessing and controlling risk Principals of Information Security, Fourth Edition 49 Ranked vulnerability risk worksheet
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Topics Learning Objectives Introduction to risk management Risk Identification Risk Assessment Risk Control Strategies Quantitative versus Qualitative Strategies
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Identify Possible Controls For each threat and associated vulnerabilities that have residual risk, create preliminary list of control ideas Residual risk is risk that remains to information asset even after existing control has been applied There are three general categories of controls: Policies Programs—awareness, education, etc Technologies
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Risk Control Strategies Once ranked vulnerability risk worksheet complete, must choose one of five strategies to control each risk: Defend Transfer Mitigate Accept Terminate
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Defend Attempts to prevent exploitation of the vulnerability Preferred approach Accomplished through countering threats, removing asset vulnerabilities, limiting asset access, and adding protective safeguards Three common methods of risk avoidance: Application of policy Training and education Applying technology
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Transfer Control approach that attempts to shift risk to other assets, processes, or organizations If lacking, organization should hire individuals/firms that provide security management and administration expertise Organization may then transfer risk associated with management of complex systems to another organization experienced in dealing with those risks President Harry Truman “If can’t stand the heat, get out of the kitchen”
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Mitigate Attempts to reduce impact of vulnerability exploitation through planning and preparation Approach includes three types of plans Incident response plan (IRP): define the actions to take while incident is in progress Disaster recovery plan (DRP): most common mitigation procedure Business continuity plan (BCP): encompasses continuation of business activities if catastrophic event occurs
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Accept Doing nothing to protect a vulnerability and accepting the outcome of its exploitation Valid only when the particular function, service, information, or asset does not justify cost of protection
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Terminate Directs the organization to avoid those business activities that introduce uncontrollable risks May seek an alternate mechanism to meet customer needs Example - In 2007 Sprint announced it was canceling the accounts of around 1,000 people who called customer service too much. At first blush, it might sound like a pretty jerk thing to do, have bad service and then punish people who complain The terminated customers were scamming Sprint, calling in again and again, just to get free service credits.
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Selecting a Risk Control Strategy Level of threat and value of asset play major role in selection of strategy
Rules of thumb on strategy selection can be applied:
When a vulnerability exists When a vulnerability can be exploited When attacker’s cost is less than potential gain When potential loss is substantial
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Selecting a Risk Control Strategy
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Feasibility Studies Before deciding on strategy, all information about economic/noneconomic consequences of vulnerability of information asset must be explored This is an attempt to answer the question, “What are the actual and perceived advantages of implementing a control as opposed to the actual and perceived disadvantages of implementing the control?” A number of ways exist to determine advantage of a specific control
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Cost Benefit Analysis (CBA) Begun by evaluating worth of assets to be protected and the loss in value if they are compromised The formal process to document this is called cost benefit analysis or economic feasibility study Items that affect cost of a control or safeguard include: cost of development or acquisition; training fees; implementation cost; service costs; cost of maintenance Benefit: value an organization realizes using controls to prevent losses from a vulnerability
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Cost Benefit Analysis (CBA) (cont’d.) Asset valuation: process of assigning financial value or worth to each information asset Process result is estimate of potential loss per risk Expected loss per risk stated in the following equation: Annualized loss expectancy (ALE) = single loss expectancy (SLE) × annualized rate of occurrence (ARO) SLE = asset value × exposure factor (EF)
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Cost Benefit Analysis (CBA) (cont’d.) CBA determines if alternative being evaluated is worth cost incurred to control vulnerability CBA most easily calculated using ALE from earlier assessments, before implementation of proposed control: CBA = ALE(prior) – ALE(post) – ACS ALE(prior) is annualized loss expectancy of risk before implementation of control ALE(post) is estimated ALE based on control being in place for a period of time ACS is the annualized cost of the safeguard Principals of Information Security, Fourth Edition 64 Cost Benefit Analysis (CBA) (cont’d.) Once value of assets is estimated, potential loss from exploitation of vulnerability is studied Process result is estimate of potential loss per risk A single loss expectancy (SLE) is the calculation of the value associated with the most likely loss from an attack. It is a calculation based on the value of the asset and the exposure factor (EF), which is the expected percentage of loss that would occur from a particular attack, as follows: SLE = asset value x exposure factor (EF) Asset Value = $100,000 EF = 20% SLE = ?
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Cost Benefit Analysis (CBA) (cont’d.) • Expected loss per risk stated in the following equation: • Annualized loss expectancy (ALE) equals • Single loss expectancy (SLE) TIMES • Annualized rate of occurrence (ARO) • Annualized Loss Expectancy (ALE) = Single Loss • Expectancy(SLE) * Annualized Rate of • Occurrence(ARO) • Or ALE = SLE * ARO • ARO = 4 ; ALE = ? • SLE = asset value x exposure factor (EF) Principals of Information Security, Fourth Edition 66 Cost Benefit Analysis (CBA) (cont’d.) CBA = ALE(prior) – ALE(post) – ACS Two different ways of looking at it: CBA = Benefit – Cost or (ALE(prior) – ALE(post) ) – ACS CBA = Current Cost – Future Cost or ALE(prior) – ( ALE(post) + ACS )
What to do ? CBA > 0; Good CBA = 0; Why bother CBA < 0; No benefit, forget it
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Evaluation, Assessment, and Maintenance of Risk Controls Selection and implementation of control strategy is not end of process Strategy and accompanying controls must be monitored/reevaluated on ongoing basis to determine effectiveness and to calculate more accurately the estimated residual risk Process continues as long as organization continues to function Principals of Information Security, Fourth Edition 68 Risk Control Cycle
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Topics Learning Objectives Introduction to risk management Risk Identification Risk Assessment Risk Control Strategies Quantitative versus Qualitative Strategies
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Quantitative versus Qualitative Risk Control Practices • Performing the previous steps using actual values or estimates is known as quantitative assessment • Possible to complete steps using evaluation process based on characteristics using non numerical measures; called qualitative assessment • Utilizing scales rather than specific estimates relieves organization from difficulty of determining exact values • For example; asset costs can be substituted by a scale 1-20; where 1 is least cost and 20 the most cost; similarly ARO can be substituted by a scale of 1-20; where 1- rarely occurs and 20 occurs daily (or even hourly).
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Quantitative versus Qualitative Risk Control Practices Quantitative analysis is hard to carry out quickly in a large organization. One should attempt to conduct Qualitative analysis as a first step to risk management—otherwise, the entire process may take took long and it may give wrong impression about usefulness of the Risk Management process. Organizations should remember the adage, “Good security now is better than perfect security never.”
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Benchmarking* and Best Practices An alternative approach to risk management Benchmarking: process of seeking out and studying practices in other organizations that one’s own organization desires to duplicate Learn from others successes and mistakes One of two measures typically used to compare practices: Metrics-based measures Process-based measures
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Benchmarking* and Best Practices (cont’d) Standard of due care: when adopting levels of security for a legal defense, organization shows it has done what any prudent organization would do in similar circumstances (do compare!) Due diligence: demonstration that organization is diligent in ensuring that implemented standards continue to provide required level of protection (do actually help!) Failure to support standard of due care or due diligence can leave organization open to legal liability Principals of Information Security, Fourth Edition 74 Benchmarking* and Best Practices (cont’d) Best business practices: security efforts that provide a superior level of information protection When considering best practices for adoption in an organization, consider: Does organization resemble identified target with best practice? Are resources at hand similar? Is organization in a similar threat environment?
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Benchmarking* and Best Practices (cont’d) • “Benchmarking* can yield great benefits in the education of executives and the realized performance improvements of operations. In addition, benchmarking can be used to determine strategic areas of opportunity. In general, it is the application of what is learned in benchmarking that delivers the marked and impressive results so often noted. The determination of benchmarks allows one to make a direct comparison. Any identified gaps are improvement areas.”
Above quote from : http://www.best-inclass.
com/bestp/domrep.nsf/pages/716AD479AB1F512C85256DFF006BD0 72!OpenDocument 76 Problems with the Application of Benchmarking and Best Practices Organizations don’t talk to each other (biggest problem) Hire consultants. Use standards from industry organizations No two organizations are identical Best practices are a moving target Stay more current on a regular basis, not once in a while Knowing what was going on in information security industry in recent years through benchmarking doesn’t necessarily prepare for what’s next Threats evolve
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Benchmarking* and Best Practices (cont’d) Baselining Baselining is the analysis of measures against established standards. In information security, baselining is comparison of security activities and events against an organization’s future performance Useful during baselining to have a guide to the overall process An example is the establishment of the number of attacks per week the organization is experiencing. In the future, this baseline can serve as a reference point to determine if the average number of attacks is increasing or decreasing. Principals of Information Security, Fourth Edition 78 Other Feasibility Studies (Qualitative Approaches) Organizational: examines how well proposed IS alternatives will contribute to organization’s efficiency, effectiveness, and overall operation Operational: examines user and management acceptance and support, and the overall requirements of the organization’s stakeholders Technical: examines if organization has or can acquire the technology necessary to implement and support the control alternatives Political: defines what can/cannot occur based on consensus and relationships Principals of Information Security, Fourth Edition 79 Risk Management Discussion Points Organization must define level of risk it can live with Risk appetite: defines quantity and nature of risk that organizations are willing to accept as trade-offs between perfect security and unlimited accessibility Residual risk: risk that has not been completely removed, shifted, or planned for The goal of information security is not to bring residual risk to zero; it is to bring residual risk into line with an organization’s comfort zone or risk appetite
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Documenting Results At minimum, each information asset-threat pair should have documented control strategy clearly identifying any remaining residual risk. Furthermore, each control strategy should articulate which of the four fundamental risk-reducing approaches will be used or how they might be combined, and how that should justify the findings by referencing the feasibility studies. Another option: document outcome of control strategy for each information asset-vulnerability pair as an action plan. This action plan includes concrete tasks, each with accountability assigned to an organizational unit or to an individual. Risk assessment may be documented in a topic specific report. These are usually demand reports that are prepared at the direction of senior management and are focused on a narrow area of information systems operational risk.
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Recommended Risk Control Practices Convince budget authorities to spend up to value of asset to protect from identified threat Final control choice may be balance of controls providing greatest value to as many asset-threat pairs as possible Organizations looking to implement controls that don’t involve such complex, inexact, and dynamic calculations
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Summary Risk identification: formal process of examining and documenting risk in information systems Risk control: process of taking carefully reasoned steps to ensure the confidentiality, integrity, and availability of components of an information system Risk identification A risk management strategy enables identification, classification, and prioritization of organization’s information assets Residual risk: risk remaining to the information asset even after the existing control is applied
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Summary (cont’d) Risk control: five strategies are used to control risks that result from vulnerabilities: Defend Transfer Mitigate Accept Terminate
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Summary (cont’d) Selecting a risk control strategy Cost Benefit Analysis Feasibility Study Qualitative versus Quantitative Risk Control Best Practices and Benchmarks Organizational Feasibility, Operational Feasibility, Technical Feasibility, and Political Feasibility Risk Appetite: organizational risk tolerance Residual risk: risk remaining after application of risk controls
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