1. Security+ All-In-One Edition Chapter 17 – Risk Management
Brian E. Brzezicki

2. Risk Management

3. Risk Management (493)
The idea of analyzing your business processes and determining what are the risks that threaten those processes, and choosing cost effective countermeasures to minimize the risks and the associated losses.

4. Risk Management Terms (494)
Risk – the possibility of suffering harm or loss
Risk Management/Risk Analysis – the overall decision making process of identifying the risks (threats and vulnerabilities) and mitigating actions to determined the impact of an event that would affect a project, program or business
(more)

5. Risk Management Terms (494)
Asset – resource or information an organization needs to conduct it’s business
Threat – any circumstance or event with the potential to cause harm to an asset.
Vulnerability - A software hardware or procedural weakness that may provide an attacker the opportunity to obtain unauthorized access.
Impact – the resulting loss when a threat exploits a vulnerability
(more)

6. Risk Analysis Terms (495)
Countermeasures / control / safeguard – a measure taken to detect, prevent, or mitigate the risk associated with a threat.
Qualitative Risk Analysis – The process of subjectively determining the impact of an event.
Quantitative Risk Analysis – The process of objectively determining the impact of an event. Specifically assigning numbers to understand the event (probability, Loss, cost etc)
(more)

7. Random Thoughts (497) Risks are not just about network security.
Risks can be
Fires
Tornados
Floods
Blizzards
Hacking
Vendors going out of business
Revenue Streams stopping
Fraud
(more)

8. Random Thoughts
Risk Management always is concerned with providing COST EFFECTIVE safeguards…
Don’t bother protecting something if the cost of protecting it, is more than it’s worth!
Risk also can be hard to quantify (reputation)?
What’s a reputation worth to a business?

9. Risk management Flowchart (496)

10. Quantitative Risk Analysis Terms

11. EF - Exposure Factor (507)
EF – if you have a building and you determine in the event of a fire 25% of the building will be destroyed on average.. Your EF is 25% (.25) you use the EF to determine the SLE

12. SLE – Single Loss Expectancy (507)
SLE = how much you expect to lose if an event occurs
SLE= Asset Value * EF
Ex. if you have a building worth $1,000, and your EF is .25 what is your SLE?
SLE = Asset Value * EF
SLE = $1,000,000 * .25
SLE = $250,000

13. ARO – Annual Rate of Occurrence (507)
ARO – How many times you expect a certain event to occur in 1 year.
Ex. If you expect 2 fires a year
ARO = 2
Ex. If you expect 1 fire every 10 years
ARO = (1 fire)/(10 years)
ARO = .1
Use ARO to determine ALE

14. ALE – Annual Loss Expectancy (507)
ALE – how much money you expect to loss in a year due to a certain threat.
ALE = SLE * ARO
Ex. If your warehouse fire SLE = $250,000 and you expect 2 fires a year
ALE = $250,000 * 2
ALE = $500,000

15. Choosing a Countermeasure
When analyzing a countermeasure you need to look at the ALE BEFORE the countermeasure, and the ALE AFTER the countermeasure and compare that to the cost of the countermeasure.
If a countermeasure reduces the ALE more than the countermeasure costs, then it is COST effective and should be applied.
(ALE before) – (ALE after) > Cost of Countermeasure
(more)

16. Risk Analysis Example problem
You have an important server. For every hour that the server is down it costs your company $
There is a 25% chance every month that the server will get hacked, if it does it will cost you 4 hours to clean and reinstall the server (nobody will be able to use it)
There is an intrusion prevention system that will take the risk of hacked system to 0% (don’t we wish), however it costs $5, per year subscription fee.
Should you purchase the IPS? If you do how much money will you save or lose?

17. Choosing a Countermeasure
You may also decide to “transfer” the risk (buy insurance)
If neither of these (countermeasure or transfer) are COST effective, you may choose to AVOID the risk or ACCEPT the risk?
What is avoiding the risk?

18. Risk Analysis Example problem
You have an important server. For every hour that the server is down it costs your company $
There is a 25% chance every month that the server will get hacked, if it does it will cost you 4 hours to clean and reinstall the server (nobody will be able to use it)
There is an intrusion prevention system that will take the risk of hacked system to 0% (don’t we wish), however it costs $5, per year subscription fee.
Should you purchase the IPS? If you do how much money will you save or lose?

19. Residual Risk (501)
Understand that no countermeasure can 100% reduce the risk.. There will always be some risk left over after applying controls. This is called Residual Risk.

20. Quantitative Risk Analysis (502)
Truly quantitative analysis, requires a lot of number crunching.. You should use software to automate this task. Be aware you cannot truly 100% eliminate risk, and you cannot truly 100% quantify risk (some things simply cannot be measured)

21. Qualitative Risk Analysis
Qualitative Risk analysis doesn’t try to crunch numbers to analyze risk, instead all involved parties get together to try to subjectively understand risk.
What business functions are critical
What would happen if a function was lost
What functions are more important that others
What are threats
How can we mitigate threats.

22. Chapter 17 - Review Q. Define EF Q. Define SLE Q. Define ARO
Q. Define ALE

23. Chapter 17 - Review
Q. Any countermeasure you deploy should ultimately be ______ _______
Q. If my ALE for a threat is $50K a year, and a countermeasure to eliminate the threat costs $30K a year, should I implement it?
Q. If my ALE is $50K a year, a countermeasure will reduce the ALE by 50%, and the countermeasure costs 30K a year, should I implement it?

24. Chapter 17 - Review Q. What is “residual risk”
Q. What is risk transference
Q. What is risk avoidance
Q. What is risk acceptance

25. Chapter 17 - Review
Q. What is quantitative vs. qualitative risk analysis?
Q. Can you get automated tools for quantitative analysis, how about qualitative analysis.
Q. What is due diligence, due care?