Risk management is the practice of defining and analyzing the threats to organization assets and capabilities, and for assisting management in optimizing the return on investment of information security resources. Risk management encompasses processes that collectively identify, evaluate, minimize, or eliminate problems or risks that adversely affect system resources. Within the framework of information security, risk management is a critical component to creating effective security policies and practices. It is not possible in today's world to have a risk-free data processing environment. To answer these questions, a risk management program must be established.
Risk management includes risk analysis as the first of several steps.
Determine the replacement value of assets and resources. Identify the threats to the risk environment. Identify the vulnerabilities in the risk environment. Estimate the frequency of threat occurrence. Identify the safeguards that are already in place.