IT Risk Management Framework Quantitative Prioritization
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Solution Overview
Problem
Managing IT risks in complex organizational ecosystems is challenging due to the lack of a common, quantitative approach for identifying, classifying, measuring, and communicating risks across IT and business organizations, leading to inadequate prioritization and treatment of IT-related issues.
Innovation Solution
A method and system for calculating IT risk exposure indices, adjusting them based on business impact and risk treatment factors to prioritize and select IT risks for treatment, using a computer system with software instructions to identify, classify, and manage IT risks through a structured framework of IT asset and consequence classifications.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If a qualitative view of IT risks is used based on expert opinion, then risk identification is simplified, but measurement precision and objectivity deteriorate
Solution Approach 1:
The patent replaces the mechanical system of qualitative expert judgment with a quantitative computational system that automatically calculates risk exposure indices using mathematical formulas and data processing, thereby eliminating subjectivity while maintaining operational feasibility
Solution Approach 2:
The patent transforms risk assessment from qualitative parameters (expert opinions, descriptive categories) to quantitative parameters (risk exposure indices, numerical scores, standardized metrics), enabling precise measurement and objective comparison of IT risks
2Reliability
If IT risk management focuses on specific issues like security and disaster recovery, then specialized risk coverage is improved, but comprehensiveness of enterprise-wide risk management deteriorates
Solution Approach 1:
The patent creates a universal risk management framework that can handle multiple types of IT risks (security, disaster recovery, project risks, operational risks) through a single standardized quantitative methodology, making the system adaptable to enterprise-wide applications while maintaining specialized risk coverage
Solution Approach 2:
The patent segments enterprise-wide risks into specific IT risk categories (security, disaster recovery, project risks) that can be individually assessed and managed, while the standardized framework ensures comprehensive coverage across all segments through consistent application of the risk exposure index methodology
3Reliability
If IT investments are increased to improve IT infrastructure, then IT capability is enhanced, but risk exposure and business value alignment may deteriorate without proper prioritization
Solution Approach 1:
The patent changes the parameters of risk management from complex qualitative assessments to standardized quantitative metrics (risk exposure indices, prioritization scores), simplifying the management of IT investments and risk exposure while maintaining enhanced IT infrastructure capability
Data Source
AI summary
A method for treating information technology (IT) risk of an organization including identifying a plurality of IT risks, where each of the plurality of IT risks is based on a known problem and is associated with an IT asset classification and an IT consequence classification, calculating a plurality of IT risk exposure indices, where each of the plurality of IT risk exposure indices is associated with at least one of the plurality of IT risks, adjusting each of the plurality of IT risk exposure indices based on a business impact factor to obtain a business impact index, prioritizing the plurality of IT risks by adjusting the business impact index based on a risk treatment factor to obtain a prioritized risk treatment index, and selecting at least one of the plurality of IT risks for treatment based upon the prioritized risk treatment index.