It’s the same story we’ve heard a thousand times: In today’s digital landscape, risk is constantly rising. Cyber threats are becoming more sophisticated, and the cost of data breaches is escalating. According to the IBM Security Cost of a Data Breach Report 2024, the average cost of a data breach has reached USD 4.88 million. As such, effective risk management is no longer a luxury—it’s a necessity. A robust risk management program helps organizations proactively identify, assess, and control threats and vulnerabilities that could negatively impact their operations. A critical component of any successful risk management program is a modern asset inventory.
An asset inventory provides a clear, detailed view of all assets within an organization’s IT environment, enabling better risk identification and control. This article explores how an asset inventory is essential to the five steps of an effective risk management process.
Step 1: Identify risks comprehensively by leveraging asset discovery
The first step in managing risk is risk identification, which involves understanding:
- potential threats and threat actors
- the vulnerabilities that they exploit and that exist in your network
It is a fundamental truth that you can’t protect what you don’t know you have. Likewise, you can’t find vulnerabilities in systems that you don’t know you have. This is where asset discovery comes into play and why it is so important. Asset discovery is a key capability of an asset inventory solution. It automatically identifies and catalogs all assets within an organization’s IT environment.
Consolidating information from existing asset management systems is not asset discovery. While consolidating data into one dashboard can help give you a unified view of your data, it only shows you the part of your infrastructure that you already know exists. Likewise, using expensive consultants to evaluate your network or survey your staff for data to populate an asset inventory is not a substitute for a sophisticated asset discovery tool.
An effective asset inventory solution uses specialized asset discovery tools to locate and document assets, especially those that are not part of an existing inventory, such as unauthorized devices, shadow IT resources, or assets that aren’t actively managed or documented. By ensuring all assets are accounted for, an organization can effectively identify the risks associated with these assets, forming a solid foundation for your risk management program.
Step 2: More accurately assess risk by understanding impact on your business
Once existing risks have been identified, the next step is to assess the level of risk for each. This involves evaluating the likelihood that a threat will exploit a given vulnerability and the impact on your network and associated consequences for the business if you are hit by one of those threats. An asset inventory plays a crucial role in this process by understanding which business functions specific assets enable and how they are interconnected with and interdependent on other critical assets.
Business functions, the core activities that keep your organization running smoothly and generating revenue, should be the focus. Understanding the dependencies between assets and critical functions allows for a more accurate risk assessment. For example, instead of categorizing assets into generic IT groupings like “Windows servers,” it’s more effective to align asset management with specific business functions like “logistics and shipping.” This allows you to accurately understand the impact on the business if, for example, a server went down due to an attack or other disruption.
An asset inventory also enhances third-party risk management. Many organizations rely on third-party vendors and services, which introduce external dependencies and potential risks. A complete asset inventory helps you see and understand these connections, allowing you to make more informed risk management decisions.
Step 3: Prioritize risk based on business function criticality and asset resilience
Effective risk management requires a strategic approach to prioritizing risks. An asset inventory facilitates this by enabling organizations to prioritize risks based on an asset’s resilience and criticality. Resilience considers factors such as how difficult an asset is to access (isolation), how easy it is to compromise (hardness), and how well the network would function if the asset goes down (redundancy).
Criticality assesses an asset’s importance to the organization’s critical functions. Critical business functions are the core business activities that, if they stopped working, your business would cease to operate, and potentially cease to exist if they were down long enough. Identifying and protecting critical business functions is essential for risk management.
Assets with high criticality and low resilience scores should be prioritized when planning risk mitigation. By aligning risk response measures with business priorities, organizations can maximize their cybersecurity budgets and minimize potential risks, ensuring that resources are invested where they have the most impact.
Step 4: Mitigate risks using asset inventory insights
Risk mitigation is about taking action to reduce the impact of identified risks. An asset inventory enables organizations to allocate mitigation resources effectively by focusing their efforts on assets that pose the highest risk.
Technical mitigation measures might include implementing a zero-trust architecture, robust firewalls, intrusion detection systems, and encryption protocols to protect critical assets and prevent unauthorized access. Regular security updates and patches should also be applied to safeguard systems against known vulnerabilities.
Non-technical mitigation measures focus on the people and processes within the organization. This includes training employees on cybersecurity best practices, developing incident response plans, and conducting regular security audits and assessments to identify any gaps or weaknesses in the security infrastructure.
Step 5: Ongoing monitoring, reviewing, and updating
Organizations’ IT environments are not static; they evolve as new capabilities are added and old ones are retired. This organic growth can introduce new risks or change the risk landscape. A constantly updated asset inventory is essential to keep risk response and controls current in a continually shifting environment.
Redjack has found that an organization’s infrastructure changes by an average of 5-15% a month. This underscores the necessity for an automated system to maintain your awareness of your infrastructure. An automated asset inventory ensures that newly discovered devices are added and outdated or decommissioned assets are removed, preventing gaps or inaccuracies in the inventory. This ensures that your risk management program is based on the current state of your IT landscape, reducing the risk of relying on outdated or incomplete asset information.
Summary: The importance of an asset inventory to risk management
A comprehensive asset inventory is more than just a list of hardware and software—it’s a powerful tool for enhancing your risk management program. By enabling effective risk identification, assessment, prioritization, mitigation, and monitoring, an asset inventory helps organizations stay ahead of threats and vulnerabilities, ensuring they can protect their most critical assets and maintain business continuity. In an era where risk is constantly on the rise, leveraging a complete asset inventory is essential for any organization committed to safeguarding its operations and reputation.
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