Technology risk is more than a checkbox on your compliance list — it’s become a defining challenge to navigating our digitized economy. Cloud adoption, AI integration, rapid software iteration and deployment all open new vectors for potential failure. It’s hard to keep up with the speed of change today, and many organizations are seeking to shift their approach to technology risk management from dated, reactive postures to more efficient and effective methodologies. Let’s look at technology risk and how you can better prepare your organization to manage it.

What is Technology Risk?

Technology risk refers to the potential threats and vulnerabilities that can negatively impact an organization’s IT systems, data or operations.

Every year, shifting digital landscapes and new advancements in technology reveal new vulnerabilities that can harm or cripple businesses. To respond, organizations must develop comprehensive, deliberate plans and strategies to stay ahead of, or at least current with, rapid technology evolution while minimizing risk.

Examples of Technology Risk

Technology risk comes in many shapes and sizes, depending on your business’s industry and unique characteristics. Let’s explore common sources of technology risk your organization should consider:

• Cybersecurity Risks — Cyberthreats, also fueled by recent technological advancements, continue to boom — increasing in number, sophistication and effectiveness. The most common threats include hacking, phishing, malware and distributed denial-of-service (DDoS) attacks.
• Insider Threats — Most successful infiltrations into business networks and systems result from insider threats and human error. In particular, cyberthreats that prey on human behavior and leverage social engineering attacks successfully fool employees into divulging sensitive account information and executing malicious software.
• Third-party Risks — Every new vendor, supplier and contractor you enable to interact with your networks or systems is a new risk. These third-party organizations have unique technology stacks and security solutions that must integrate with your own. It’s up to you to discern whether you trust an individual partner or not to secure their operations adequately. Be sure to research customer testimonials and industry analyses.
• Compliance Risks — All businesses must adhere to industry-specific security regulations and compliance. Regulatory non-compliance, data governance issues and other industry-specific violations can result in legal recourse, hefty fines and reputational damage.
• Emerging Technology Risks — New technology risks are emerging yearly, with modern advances in cutting-edge tech presenting new vulnerabilities. Emerging trends to watch out for include Artificial Intelligence (AI) and machine learning, Internet of Things (IoT) security risks, 5G and 6G wireless connectivity and edge computing.
• Infrastructure Risks — Sometimes, technology just doesn’t work the way it’s supposed to. To ensure business continuity, hardware failures, software failures and system outages are all scenarios that must be anticipated and accounted for when assessing technology risk.
• Natural Disaster Risks — Depending on your business’s physical office locations or the location of third-party service providers, you may be at risk for natural disasters that can impact network infrastructure and regular business operations, such as hurricanes, snowstorms, floods and heat waves.

Impact of Technology Risk

Technology risk is an existential concern for every business since failure to address it can be devastating:

• Operational Disruption — System outages, hardware problems, software failures and network breaches interfere with regular operations, causing delays, inefficient processes and, in worst-case situations, complete shutdowns.
• Data Breach — Businesses that don’t protect against modern cyberthreats are at risk of network breaches and data theft. Successful data breaches are nightmare scenarios, resulting in lost confidentiality, damaged brand trust and significant resources expended to rectify the breach.
• Financial Losses — Operational disruption, impaired services or successful network breaches can hurt your bottom line with lost revenue, missed sales and remediation costs. Failure to comply with industry regulations can also result in heavy fines and higher insurance premiums.
• Legal Recourse — Failure to adhere to industry standards and compliance, like GDPR, HIPAA and PCI DSS, can invoke hefty fines and cumbersome agency audits. Additionally, impacted customers and partners may file lawsuits, especially in the case of a data breach.
• Reputational Damage — Nowadays, vendor and partner relationships are all about avoiding risk. If you fall victim to technology risk, you indicate to prospects and customers that they may, too, be at risk by working with you. Even when fines and litigation are resolved, brand damage can impair a business’s long-term success.

What Are Key Strategies to Stay Ahead of Technology Risk?

Businesses must develop effective plans to combat technology risk and avoid financial losses and reputational damage. The question is how to do it. Every business’s specifics are unique, but here are some strategies that can keep you ahead of the eight-ball:

Technology Risk Assessments

Conduct cadenced, thorough audits of their tech stacks and systems, looking for vulnerabilities and opportunities for improvement. Proactive, continuous risk assessments can stop disaster situations before they start, saving headaches and countless resources and time spent on remediation. Moreover, regular risk assessments are essential for verifying compliance with industry regulations and, in some cases, necessary to appease stakeholders.

Security Measures

Combat the latest cyberthreats by adopting robust, cutting-edge cybersecurity solutions. Today, nearly every aspect of your business is digital, making it essential to conduct a cybersecurity risk assessment and consider every cybersecurity vulnerability and avenue into your network. Administer these assessments regularly to stay ahead of competition — less than one in 10 (eight percent) of organizations that complete cyber risk assessments do them monthly, while two in five (40 percent) conduct them annually, according to Business Wire.

Standard cybersecurity solutions include firewalls, endpoint protection, encryption, intrusion detection and prevention systems (IDPS), role-based access control (RBAC), multi-factor authentication (MFA) and data loss prevention (DLP). Enterprises seeking total security protection may consider advanced cybersecurity frameworks like zero trust network access (ZTNA), which treats all network devices as possible threats, regardless of location or prior verification.

Employee Training & Awareness

The majority of successful business network breaches result from human error. Educating your entire organization, from the CEO to interns, on best cybersecurity practices is paramount. Ensure your training is regular, ongoing, engaging and up to date with the latest security trends. Seek feedback from trainees to ensure your training sessions are effective and worthwhile.

Incident Response Planning

Develop comprehensive incident response plans that outline procedures and proper remediation to various disaster scenarios. These plans must delineate clear responsibilities and roles to relevant team members to reduce confusion and ensure prompt response. And consistently review and update these plans as markets and business environments evolve.

Market Analyses

To comprehensively prepare for emerging technology risks that can harm your operations, stay on top of trends and threats and conduct regular market analyses examining possible risks as well as current solutions that alleviate them.

How Can You Assess and Address Your Technology Risk?

Comprehensively assessing and addressing technology and risk management can be daunting. UPSTACK can help by sourcing next-generation, custom networking and security solutions that flexibly meet your business needs.

• Security Solutions — UPSTACK has expertise in evaluating and sourcing on-premises and cloud-based solutions for end-to-end prevention and detection, focusing on cost efficiency and quality protection for your organization. By training employees, preventing attacks, detecting and responding to threats, offering cybersecurity advice and managing IT risk, we can help you ensure your data is monitored and recoverable in the event of cyberattacks.
• Business Continuity Solutions — UPSTACK business continuity planning and services help you withstand or rapidly recover from unplanned events. These solutions are customizable based on your company’s budgets, risks, compliance requirements, mission-critical applications and other factors. Our experts help you choose the best data backup (Backup-as-a-service, or BaaS) and disaster recovery (Disaster Recovery-as-a-Service, or DRaaS) solutions, as well as physical spaces and command centers you can rely on. We help you source the best suppliers and solutions to keep your business running regardless of power failures, natural disasters, cyberattacks and other system failures.
• Network Connectivity Solutions — UPSTACK has extensive expertise in interconnecting networks, maximizing capacity, establishing private and secure connections, replacing or enhancing existing networks, adding new sites, prioritizing network security, adding redundancy and much more. We help you plan and deploy single-provider and multiple-provider solutions from the world’s best providers of telecom services, regional fiber and global networking services.
• IoT Solutions — UPSTACK can help you plan your IoT deployment to meet your unique business objectives, evaluate and source best-fit vendors for your needs and deliver ongoing support. Our advisors understand the importance of your IoT deployment’s security and protecting connected infrastructure from vulnerabilities.

Connect with an advisor today.