IT Risk Management & Business Continuity Planning

For: IT managers, CISOs, and business continuity planners
Goal: Identify, assess, and mitigate IT risks; ensure business continuity
Outcome: Protected organization, minimal downtime, rapid recovery

Why Risk Management Matters

60% of companies that experience catastrophic data loss go out of business within 6 months (National Cyber Security Alliance)

Common IT Disasters:

• 🔥 Ransomware attacks (93% of organizations targeted in 2024)
• 💥 Hardware failures (servers, storage, network equipment)
• 🌪️ Natural disasters (fire, flood, tornado, earthquake)
• 👤 Human error (deleted database, misconfigured firewall)
• ⚡ Power outages (data center downtime)
• 🏢 Facility issues (building access, HVAC failure)

Cost of Downtime:

• Fortune 500: $100K-$500K per hour
• Mid-market: $10K-$100K per hour
• Small business: $1K-$10K per hour
• Reputation damage: Immeasurable

IT Risk Management Framework

Risk Management Process

1. Risk Identification → What can go wrong?
2. Risk Assessment → How likely? How bad?
3. Risk Treatment → Accept, mitigate, transfer, avoid?
4. Risk Monitoring → Continuous tracking

Step 1: Risk Identification

Common IT Risk Categories:

Technology Risks:

• System failures (hardware, software, network)
• Data loss or corruption
• Cyberattacks (ransomware, phishing, DDoS)
• Technology obsolescence
• Integration failures

Process Risks:

• Inadequate change management
• Poor backup procedures
• Weak access controls
• Insufficient documentation
• Manual processes prone to error

People Risks:

• Key person dependency
• Insufficient training
• Insider threats
• Contractor/vendor issues
• Skills gaps

External Risks:

• Vendor failures
• Supply chain disruptions
• Regulatory changes
• Natural disasters
• Pandemic/health crisis

Financial Risks:

• Budget cuts
• Cost overruns
• Unexpected expenses
• Economic downturn

Step 2: Risk Assessment

Risk Matrix (Likelihood × Impact):

           LIKELIHOOD →
    │ Rare │ Unlikely│ Possible│ Likely│ Almost Certain│
────┼──────┼─────────┼─────────┼───────┼──────────────┤
CATA│  M   │    H    │    H    │  VH   │      VH      │
HIGH│  M   │    M    │    H    │   H   │      VH      │
MED │  L   │    M    │    M    │   H   │       H      │
LOW │  L   │    L    │    M    │   M   │       H      │
MIN │  L   │    L    │    L    │   M   │       M      │
    └──────┴─────────┴─────────┴───────┴──────────────┘
IMPACT ↓

L = Low Risk
M = Moderate Risk
H = High Risk
VH = Very High Risk

Risk Scoring Example:

| Risk | Likelihood (1-5) | Impact (1-5) | Score | Priority | |------|-----------------|--------------|-------|----------| | Ransomware attack | 4 | 5 | 20 | Very High | | Database corruption | 2 | 4 | 8 | Moderate | | Key employee leaves | 3 | 3 | 9 | Moderate | | Server hardware failure | 3 | 4 | 12 | High | | Power outage | 2 | 3 | 6 | Moderate |

Step 3: Risk Treatment Options

1. Accept - Do nothing (low risk, not cost-effective to mitigate)
2. Mitigate - Reduce likelihood or impact (most common)
3. Transfer - Insurance, outsource to vendor
4. Avoid - Don't do the risky activity

Risk Treatment Plan:

| Risk | Treatment | Action | Cost | Timeline | Owner | |------|-----------|--------|------|----------|-------| | Ransomware | Mitigate | Deploy EDR, backup, training | $25K | 90 days | CISO | | Server failure | Mitigate | HA cluster, spare parts | $50K | 60 days | Infrastructure | | Data breach | Transfer | Cyber insurance | $15K/year | 30 days | CFO |

Business Continuity Planning (BCP)

Business Impact Analysis (BIA)

Purpose: Identify critical business functions and acceptable downtime

BIA Process:

1. Identify Critical Business Functions

• Revenue-generating activities
• Customer-facing services
• Regulatory requirements
• Safety/security functions

2. Define Recovery Objectives

RTO (Recovery Time Objective):

• Maximum acceptable downtime
• "How long can we be down?"
• Example: Email = 4 hours, ERP = 2 hours, Website = 1 hour

RPO (Recovery Point Objective):

• Maximum acceptable data loss
• "How much data can we lose?"
• Example: Financial data = 0 hours (real-time), CRM = 4 hours

3. Assess Financial Impact

| Function | Downtime | Revenue Lost/Hour | Regulatory Impact | Customer Impact | |----------|----------|-------------------|-------------------|----------------| | E-commerce | 1 hour | $50K | None | High (abandoned carts) | | Email | 4 hours | $10K | None | Medium (productivity) | | ERP | 2 hours | $100K | High (financial reporting) | Medium |

Business Continuity Plan Structure

1. PURPOSE & SCOPE
   - Why BCP exists
   - What's covered
 
2. TEAM & RESPONSIBILITIES
   - BCP Coordinator
   - Crisis Management Team
   - Recovery teams by function
 
3. CRITICAL FUNCTIONS
   - Priority 1 (restore within hours)
   - Priority 2 (restore within days)
   - Priority 3 (restore within weeks)
 
4. RECOVERY STRATEGIES
   - IT systems recovery
   - Facility recovery
   - Personnel recovery
 
5. COMMUNICATION PLAN
   - Internal (employees)
   - External (customers, vendors, media)
   - Emergency contacts
 
6. TESTING & MAINTENANCE
   - Annual testing schedule
   - Update procedures
   - Training requirements
 
7. APPENDICES
   - Contact lists
   - Vendor contracts
   - System documentation

Disaster Recovery Planning (DRP)

DR Strategies by System Tier

Tier 1 - Mission Critical (RTO: <4 hours, RPO: <15 min)

• Examples: Payment processing, e-commerce, ERP
• Strategy: Active-active or active-passive failover
• Cost: High ($50K-$500K)
• Technologies: VMware HA, SQL Always On, AWS Multi-AZ

Tier 2 - Important (RTO: 24 hours, RPO: 4 hours)

• Examples: Email, intranet, file servers
• Strategy: Warm standby or backup restoration
• Cost: Medium ($10K-$50K)
• Technologies: Azure Site Recovery, Veeam replication

Tier 3 - Non-Critical (RTO: 72 hours, RPO: 24 hours)

• Examples: Development, test environments
• Strategy: Backup and restore
• Cost: Low ($1K-$10K)
• Technologies: Standard backups, cloud snapshots

Backup Strategy: 3-2-1 Rule

3 copies of data:

• 1 production
• 2 backups

2 different media types:

• Disk
• Tape or cloud

1 copy offsite:

• Different geographic location
• Air-gapped or immutable

Backup Schedule Example:

| Data Type | Frequency | Retention | Recovery Test | |-----------|-----------|-----------|---------------| | Databases | Every 15 min | 30 days | Monthly | | File servers | Daily | 90 days | Quarterly | | Email | Daily | 7 years (compliance) | Quarterly | | Workstations | Weekly | 30 days | Semi-annual |

Ransomware Protection

Prevention:

• ✅ Employee training (phishing awareness)
• ✅ Endpoint protection (EDR)
• ✅ Email filtering (block malicious attachments)
• ✅ Patch management (close vulnerabilities)
• ✅ Network segmentation (limit spread)

Detection:

• ✅ Behavioral monitoring (unusual file encryption activity)
• ✅ Honeypot files (canary files trigger alerts)
• ✅ Backup monitoring (backup deletions)

Recovery:

• ✅ Immutable backups (cannot be encrypted)
• ✅ Air-gapped backups (offline copy)
• ✅ Tested restore procedures (monthly drills)
• ✅ Incident response plan (who does what)

DON'T PAY THE RANSOM:

• No guarantee of decryption
• Funds criminal activity
• Encourages future attacks
• Violates sanctions in some cases

DR Site Options

Option 1: Hot Site (Expensive, Fast Recovery)

• RTO: Minutes to hours
• Description: Fully operational duplicate facility
• Cost: $50K-$500K/year
• Best For: Mission-critical systems (Tier 1)

Option 2: Warm Site (Moderate Cost/Speed)

• RTO: Hours to days
• Description: Facility with infrastructure, but not active
• Cost: $10K-$50K/year
• Best For: Important systems (Tier 2)

Option 3: Cold Site (Cheap, Slow Recovery)

• RTO: Days to weeks
• Description: Empty facility, bring your own equipment
• Cost: $1K-$10K/year
• Best For: Non-critical systems (Tier 3)

Option 4: Cloud DR (Flexible, Scalable)

• RTO: Hours to days (configurable)
• Description: DR in AWS, Azure, or GCP
• Cost: Pay-as-you-go (typically $5K-$50K/year)
• Best For: Most organizations (all tiers)
• Vendors: AWS Elastic Disaster Recovery, Azure Site Recovery, Zerto

Crisis Management

Crisis Management Team (CMT)

Roles:

Crisis Manager (CEO or COO)

• Overall incident command
• Strategic decisions
• External communication authorization

IT Recovery Lead (CIO/IT Director)

• Technical recovery coordination
• IT team assignments
• Vendor escalations

Communications Lead (PR/Marketing)

• Internal communication (employees)
• External communication (customers, media)
• Social media monitoring

Operations Lead (COO/Ops Manager)

• Business process continuity
• Alternative work arrangements
• Facility recovery

Legal/Compliance (General Counsel)

• Regulatory notifications
• Legal implications
• Contracts and liabilities

HR Lead (HR Director)

• Employee safety and welfare
• Payroll continuity
• Crisis counseling

Crisis Communication Plan

Internal Communication (Employees):

1. Immediate: Text/SMS to all staff (system down, working on it)
2. 1 hour: Email update (what happened, estimated recovery)
3. Every 2 hours: Status updates until resolved
4. Post-recovery: All-hands meeting (what happened, lessons learned)

External Communication (Customers):

1. Immediate: Status page update (if website down)
2. 30 min: Social media post (acknowledging issue)
3. Hourly: Email to affected customers
4. Post-recovery: Post-mortem report (optional, builds trust)

Media Communication:

• Designated spokesperson (CEO or PR)
• Key messages prepared in advance
• No speculation (stick to facts)
• Focus on: What we're doing to fix, customer impact, timeline

Testing & Maintenance

BCP/DR Testing Schedule

Tabletop Exercise (Quarterly):

• Duration: 2-3 hours
• Participants: Crisis Management Team
• Scenario: Walk through disaster scenario
• Outcome: Identify gaps, update plan

Backup Restoration Test (Monthly):

• Action: Restore random backup to test environment
• Verify: Data integrity, restoration time
• Outcome: Confirm backups work

Failover Test (Semi-Annual):

• Action: Failover to DR site (during maintenance window)
• Verify: Applications work, performance acceptable
• Outcome: Validate RTO/RPO

Full DR Drill (Annual):

• Action: Simulate full disaster, activate BCP
• Duration: Full business day
• Participants: All teams
• Outcome: Comprehensive test, identify weaknesses

BCP/DR Plan Maintenance

Quarterly:

• Update contact lists (personnel changes)
• Review and update vendor contracts
• Update documentation (system changes)

Annual:

• Full plan review and rewrite
• BIA update (business priorities change)
• Budget review (allocate for improvements)

After Major Changes:

• New systems/applications (update recovery procedures)
• Office relocation (update facility plans)
• Org restructuring (update team assignments)

Cyber Insurance

Why Cyber Insurance?

Covers:

• ✅ Breach investigation costs
• ✅ Legal fees and regulatory fines
• ✅ Customer notification costs
• ✅ Credit monitoring for affected individuals
• ✅ PR and crisis management
• ✅ Ransomware payments (if policy allows)
• ✅ Business interruption losses

Typical Coverage: $1M-$5M
Cost: $5K-$50K/year (depends on company size, risk)

What Insurers Require:

• ✅ MFA enabled for all users
• ✅ EDR/antivirus on all endpoints
• ✅ Regular backups (tested)
• ✅ Patch management process
• ✅ Employee security training
• ✅ Incident response plan

Insurers increasingly deny claims if basic security controls missing

Risk Register & Monitoring

Risk Register Template

| Risk ID | Category | Description | Likelihood | Impact | Score | Mitigation | Owner | Status | Review Date | |---------|----------|-------------|------------|--------|-------|------------|-------|--------|-------------| | R001 | Technology | Ransomware attack | 4 | 5 | 20 | EDR, backups, training | CISO | Open | Monthly | | R002 | Process | Inadequate backup testing | 3 | 4 | 12 | Monthly restore tests | IT Ops | Mitigated | Quarterly | | R003 | External | Data center power outage | 2 | 4 | 8 | Dual power, generator | Facilities | Open | Quarterly |

Risk Register Review:

• Monthly: High and Very High risks
• Quarterly: All risks
• Annual: Full risk assessment refresh

Compliance Considerations

Regulatory Requirements

HIPAA (Healthcare):

• Contingency planning (§164.308(a)(7))
• Data backup plan
• Disaster recovery plan
• Emergency mode operations
• Testing and revision procedures

PCI-DSS (Payment Cards):

• Requirement 12.10: Incident response plan
• Requirement 9: Physical security
• Requirement 10: Logging and monitoring

SOC 2:

• CC9.1: Identify risks
• A1.2: Business continuity planning
• A1.3: Backup and recovery

GDPR (European Data):

• Article 32: Security of processing
• Ability to restore availability and access to data

Key Takeaways

✅ Risk management is continuous - Not one-time assessment
✅ Focus on high-impact risks first - Can't mitigate everything
✅ Test your backups monthly - Backups without testing = false security
✅ Document everything - Plans are useless if not written down
✅ Train your team - Everyone should know their role in crisis
✅ Cyber insurance is essential - But requires basic security hygiene
✅ Recovery is more important than prevention - Assume breach will happen

Resources

Templates:

• IT Security Assessment Checklist - Identify risks
• Change Management Log - Control changes
• IT Asset Inventory - Track critical assets

Related Guides:

• IT Security Roadmap
• Incident Response Plan

Standards:

• ISO 22301 (Business Continuity)
• NIST SP 800-34 (Contingency Planning)
• ISO 31000 (Risk Management)

Conclusion

Your organization WILL face a disaster. The question is: Will you recover in hours or months? Will you survive at all?

Start today:

1. Conduct Business Impact Analysis (identify critical functions)
2. Assess current backups (test restoration)
3. Document basic DR procedures (top 3 critical systems)
4. Test your plan (tabletop exercise)
5. Improve continuously (lessons learned)

In 90 days, you'll sleep better knowing your organization can survive a disaster.

Experienced a disaster? Share your lessons learned in the comments! 💬🔥