Technology is essential to the operation of most businesses today. Among other things, it helps businesses to operate far more efficiently than they could in the past, to service existing customers, to reach potential new customers, and increasingly to innovate. However, technology also comes with risks and some of these can be significant. These risks can be associated with a variety of causes ranging from accidents to malicious acts and even natural disasters. Many business owners are now becoming aware of these risks, so we are going to briefly explore a variety of these and possible mitigation strategies to get you thinking about the technology risks being faced by your own business.
Types of Technology Risks
There are many different types of technology risks. Some of the most common risks include:
Data breaches: Data breaches are a major risk for businesses of all sizes. In a data breach, sensitive data, such as customer information or intellectual property, is stolen by individuals who may be internal or external. Data breaches can lead to financial losses, lawsuits, and damage to a business’s reputation. In some cases, they may also lead to criminal prosecution if incorrectly managed.
Cyberattacks: Cyberattacks are another major risk for businesses. Cyberattacks can take many forms, such as ransomware attacks, denial-of-service attacks, and phishing attacks. Cyberattacks can cause significant disruption to a business’s operations and can lead to financial losses. In worst case scenarios, the business may lose all of its digital assets and may find itself back at the startup stage.
Natural disasters: Natural disasters, such as floods, fires, and in this part of the world wild storms and cyclones, can also pose a risk to businesses. Natural disasters can damage or destroy physical infrastructure, such as data centers and office buildings. They can also disrupt business operations which can lead to financial losses in the short term and reduced market share in the long term.
How to Manage Technology Risks
There are a number of steps that businesses can take to manage technology risks. Some of the most important steps include:
Identifying risks: The first step in managing technology risks is to identify the risks that your business faces. This can be done by conducting a risk assessment. A risk assessment should help you to identify the potential risks to your business, the likelihood of those risks occurring, and the impact that those risks would have on your business.
Mitigating risks: Once you have identified the risks that your business faces, you can begin to mitigate those risks. There are many ways to mitigate technology risks and one size does not fit all. Some of the most common methods include:
Implementing security measures: Security measures, such as firewalls, antivirus software, and intrusion detection systems, can help to protect your business from cyberattacks.
Educating employees: Employees should be educated about technology risks and how to protect themselves from those risks. Employees should be taught about phishing scams, password security, and other security best practices. In our own business we have a regular information session for employees on current threats that we only half-jokingly have named the, “Don’t Click on This, Briefing.”
Having a disaster recovery plan: A disaster recovery plan will help you to recover from a natural disaster or other event that disrupts your business operations. A disaster recovery plan should include steps for backing up data, restoring data, obtaining critical equipment quickly and relocating operations if necessary. We also insist that our clients regularly test this plan to make sure it actually works! In practice when we do this with clients, we regularly find that backup data isn’t complete, there is an assumption that particular hardware will be available to purchase when there is actually no local stock available, and just generally uncover a myriad of other business destroying problems.
Monitoring risks: It is important to monitor risks on an ongoing basis. This will help you to identify new risks and to ensure that your risk mitigation measures are effective. You can monitor risks by conducting regular risk assessments and by keeping an eye on industry trends.
Technology risks are a real threat to businesses of all sizes. However, by taking steps to manage those risks, businesses can protect their data, their systems, and their reputation. Making a commitment to following the steps outlined in this article is a good first step that a business can take to managing technology risks. However, it is likely that you will need the input of a trusted external party who understands your business to assist with each of the steps above because when it comes to risks in your own business, chances are you will not be able to see the wood for the trees.
If you have a question about starting a business or running your existing business, we’d love to hear from you because we’ll select a new question to answer here every two weeks. You can submit your question to james@qsb-consulting.com using the subject ‘CQToday’.
