Module 8: IT Governance, Risk, and Compliance

What does GRC stand for?

Governance, Risk, Compliance

Why is IT GRC important?

It ensures accountability and transparency, protects systems from threats, helps meet legal obligations, and builds trust.

What is governance in GRC?

It involves rules, policies, and processes ensuring IT aligns with business strategy.

What is Risk in GRC?

It involves identifying, assessing, and mitigating potential threats to IT systems.

What is Compliance in GRC?

It is the adherence to laws, regulations, and standards applicable to IT systems.

What are the three main types of IT governance models?

Centralized, Decentralized, and Federated (hybrid) governance.

What is Centralized governance?

-All decisions are made by a single group

-The group sets the rules, selects the technologies, manages budgets, and enforces policies

-Pros: Ensures consistency

-Cons: Limits flexibility

What is Decentralized governance?

-Each business unit or department makes its own decisions

-Pros: Brings speed and innovation

-Cons: Inconsistent systems, hard to maintain security standards

What is Federated governance?

-Combination

-Central IT teams sets overall policy and security standards, but individual business units have freedom to make some IT decisions within those guidelines

-Common to large/global organizations

What is COBIT?

Control Objectives for Information and Related Technologies.

-Defines objectives and practices across risk management, resource optimization, compliance assurance, and performance measurements

-Used by large organizations that require strict internal controls

What is ITIL?

Information Technology Infrastructure Library

-Primary focus on Information Technology Service Management (ITSM)

-Best practices for delivering IT as a service

-Popular choice of organizations that prioritize customer service and efficiency

What is ISO/IEC 38500?

-International standard for corporate IT Governance

-Six key principles: responsibility, strategy, acquisition, performance, conformance, and human behavior

-Popular choice for organizations interested in adopting global standards for executive decision-making

What is the goal of IT Risk Management?

To minimize the impact of risks on infrastructure and business.

What are the four key aspects of IT Risk Management?

Identification, Assessment, Mitigation, and Monitoring.

What types of risks fall under IT Risk?

Cybersecurity Risks, Operational Risks, and Compliance Risks.

What does a Risk Matrix help organizations do?

It enables them to identify and prioritize risks based on likelihood and impact.

What is Risk Avoidance?

Eliminating the cause of a risk to avoid it altogether.

Use Case:

•High-impact, high-likelihood

•Situations where potential consequences outweigh the benefits

What is Risk Limitation?

To limit the risk by implementing controls that minimize the likelihood/adverse impact

Use Case:

•Common IT threats (e.g., phishing, malware, etc.)

•Moderate to high likelihood risks

What is Risk Transference?

To transfer the risk by using options to compensate for the loss, such as purchasing insurance

Use Case:

•Financially significant risks

What are the consequences of Non-Compliance?

Financial penalties, legal actions, security breaches, and reputational damage.

What is IT Compliance Lifecycle?

•Identify applicable standards

•Evaluate current IT environments against requirements to identify gaps (gap analysis)

•Implement controls to enforce policies and mitigate risks

•Monitor and audit regularly

•Remediate non-compliance issues

•Report and document for transparency and accountability

What is the importance of IT Risk Management?

It protects assets, ensures business continuity, compliance, reputation management, and cost savings.

What are the five core domains of IT governance?

Strategic alignment, Value delivery, Performance Measurement, Risk Management, Resource Management

Strategic alignment

technology should deliver what business needs

Value delivery

IT investments should produce value (increased efficiency, customer satisfaction, revenue growth)

Performance Measurement

-Uses Key Performance Indicators (KPIs) and metrics for measuring efficiency, quality, service uptime, etc.

-Identifies which IT areas are working well and which need improvement

Risk Management

-IT should reduce or manage risks (cybersecurity breaches, data loss, system downtime, etc.)

-Protects the organization from financial loss, legal issues, reputation damage due to IT failures

Resource Management

-Effective use of IT resources

- No waste or overuse

How to Implement IT Governance

•Assess the current IT environment

•Define roles and responsibilities - identify decision makers, stakeholders, etc.

•Choose the appropriate framework - COBIT, ITIL, etc.

•Define KPIs and metrics to guide decisions

•Monitor, review, and refine regularly - should be a continuous process

Common pitfalls

•Ignoring alignment with business needs can lead to wasteful IT investments

•Lack of executive sponsorship may cause governance to lose priority or premium

•Treating IT governance as a one-off task (should evolve)

•Prioritizing tools before strategy

•Failure to track performance metrics

When IT Governance Becomes Critical

•During a digital transformation or major IT overhaul

• Preparing for compliance audits or certifications

• Mergers or rapid scaling

• After a cybersecurity breach or IT failure

• Launching a new product, service, or cloud environment

• Entering new markets or regions with different regulatory or data privacy requirements

• When IT budgets grow significantly and leadership needs to ensure investments are strategic and accountable

Risk

the potential of losing something of value

IT Risk Management

is the approach to identify, assess, mitigate, and monitor risks associated with an organization's IT systems, processes, and data

Identification

Identify the threats and vulnerabilities within the IT environment

Assessment

Identify the likelihood (probability) and potential impact of the identified risks and prioritize them based on the level of severity

Mitigation

Prioritizing, implementation, and maintaining risk-reducing measures

Monitoring

Continuously track and evaluate the effectiveness of the implemented controls, adjust for emerging threats and vulnerabilities

Cybersecurity risks

include malicious activities that target systems and data.

Operational risks

include threats that impact the functioning of technology systems such as hardware and software failures, power outages, etc.

Compliance risks

include potential violation of laws and regulations governing technology and data management

Risk Matrix Formula

Risk Level = Threat Likelihood x Impact

Risk Acknowledgement

To acknowledge the risk and monitor it rather than taking immediate corrective action.

Use Case:

•Low-impact or low-likelihood risk

•Mitigation is not cost-effective

IT Compliance

•Ensures adherence to laws, regulations, and standards

•Compliance reduces security risks and safeguards business-critical information and sensitive customer data.

Regulatory Compliance

adhering to the laws and regulations set by government and other regulatory bodies.

General Data Protection Regulation (GDPR)

Protects EU citizens and their Personally Identifiable Information (PII)

Health Insurance Portability and Accountability Act

Protects patient information (Healthcare in the US)

Sarbanes-Oxley Act (SOX)

Financial reporting for public companies to prevent corporate fraud and protect investors

Industry Compliance

adhering to standards specific to a particular industry/sector

Payment Card Industry Data Security Standard (PCI DSS)

Protects cardholder information and reduce fraud

NIST Cybersecurity Framework, ISO 27001

Frameworks for security and governance

Technical Control Category

System-based, Firewalls, MFA, Encryption

Operational Control Category

Day-to-day actions, Security Awareness and Training, Incident Response Plan, Backup and Recovery Procedures

Management (Administrative) Control Category

Policy and Oversight, Information Security Policies, Risk Assessment, Vendor Review