| Compliance requirements are today’s driving force behind information security systems |
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| Compliance with regulations has taken the lead as the primary driver of information security for both Irish and global companies, for the first time surpassing worms and viruses, according to a survey released by Ernst & Young. This increased requirement for compliance is forcing organisations to spend more than ever on information security, writes Pat Moran. |
The sheer number of regulations and the consequences of not complying with them means that information security has become a board level issue. Nearly two-thirds of survey respondents – representing 1,300 global companies, government and non-profit agencies in 55 nations – cited compliance with regulations such as Sarbanes-Oxley, the EU’s 8th Directive or their equivalent, as the primary driver of information security.
However, organisations are still not taking the opportunity to promote information security as an integral part of their business, by incorporating information security into business strategy or through training and communication with staff. Despite the increased focus, compliance is proving more of a distraction, than acting as a catalyst for information security to become strategically aligned within organisations.
One might assume that with the attention information security is receiving due to regulatory compliance, organisations’ information security postures are improving and information security is becoming more integral to their strategic initiatives. Unfortunately, this is not happening on a consistent basis. The gap continues to widen between the growing risks brought on by rapid changes in the global business environment and what information security is doing to address those risks. This pattern is consistent across organisations, regardless of size or location.
The Ernst & Young survey found that business demands and the declining cost of wireless connectivity are driving rapid adoption of mobile technology. But with these devices leaving the safety of the corporate control environment, the information assets and intellectual property they carry are increasingly becoming the responsibility of individuals to protect - a responsibility that many organisations have not yet fully accepted nor anticipated. Less than half of organisations make provision for general users of information to be trained or made aware of the impact of information security issues with these technologies, and fewer still receive training on responding to security incidents.
Other rapidly developing technologies such as voice-over IP telephony, open source, and server virtualization, which hold the potential of increasing organisations’ competitive advantage are reported to be a significant security concern among fewer than 20 per cent of organisations, despite the serious threats they bring with them. Organisations consider emerging technologies in general to be a growing security concern in the next 12 months. However, over a quarter of them have no plans to take action to address the concern during that time period or beyond.
Third party risk remains an issue
Outsourcing remains an information security threat as many organisations are still not paying adequate attention to vendor risk management—the process of assessing and mitigating risks, including due diligence and regular reviews of practices and procedures supporting vendors’ products and services. The survey reveals that one-fifth of respondents do not address the issue of vendor risk management at all, and one-third report they have only informal procedures in place to do so.
It is no longer enough for organisations to consider just their own information security issues and threats. As the world becomes increasingly smaller, and with more and more information flowing between companies, all organisations need to consider the security of their business partners, outsourcing arrangements, suppliers and customers. Otherwise, the value created by these arrangements can quickly diminish or disappear due to perceived or real security, privacy, or identity breaches. Organisations should also consider demonstrating their own commitment to good information security by applying recognised standards or becoming certified.
Organisational alignment and execution
Although awareness about information security has risen as a critical issue among boards and executive management, they continue to focus information security activities on operational and tactical issues at the expense of addressing strategic concerns.
With proper organisational alignment and execution, information security can make significant contributions to the organisation’s strategic initiatives and overall risk management. Organisations which employ information security in this way continuously involve business, IT, and information security leaders in identifying specific areas where information security can contribute to strategic initiatives, such as mergers and acquisitions and outsourcing of business operations. They apply recognised information security standards, leading practices and the appropriate resources. |
Pat Moran is a partner with Ernst & Young’s Technology and Security Risk Services.
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| Article appeared in the December 2005 issue.
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