Our technology-dependent world is posing significant challenges for all types of organizations in maintaining the security and reliability of their IT systems. When different parts of an organization independently manage their own tech systems, it often leads to decentralized controls, resulting in substantial security vulnerabilities. These unmanaged systems, which may include custom solutions or manual processes, typically operate outside of established rules and policies, making it difficult to monitor the entire IT infrastructure effectively. This lack of central oversight creates opportunities for cybercriminals to exploit these weak points, increasing the risk of cyberattacks and data breaches.

Challenges while implementing the framework

Transitioning from decentralized to centralized IT solutions is essential to address these vulnerabilities, but it comes with several challenges. Organizations must deal with high initial and operational costs, the complexity of coordinating with multiple third-party vendors, and resistance from business units. Additionally, ensuring regulatory compliance and gaining control over previously unmanaged IT assets can be daunting.

To overcome these obstacles, organizations need to thoroughly analyze their current IT environment, evaluate the effectiveness of existing controls, and identify any gaps in oversight. By understanding these weaknesses, they can develop targeted strategies to strengthen their internal controls and move critical IT assets to centralized systems with built-in governance and compliance features, ultimately enhancing security and operational efficiency.

Creating governance oversight of decentralized systems

When embarking on the transition from decentralized to centralized IT assets, it is important to involve various organizational stakeholders early in the process. Respecting diverse roles and functions throughout the transition journey will allow representative voices to weigh in during the process, ensuring greater buy-in for a centralized system. In this scenario, organizations are advised to  establish a dedicated governance team consisting of IT governance leads, cybersecurity experts, compliance officers, and departmental representatives.

This governance team will be responsible for developing and enforcing key protocols and processes. Ideally, such measures will include the following 10 steps:

1. Define the Team Structure: assign specific roles and responsibilities for oversight, monitoring, and risk management.
2. Develop Policies and Standards: create comprehensive governance policies and guidelines for decentralized IT asset management.
3. Conduct an IT Asset Inventory: identify and classify all decentralized IT assets based on criticality and compliance needs.
4. Assess Current Controls: evaluate the effectiveness and compliance of existing decentralized controls.
5. Centralize Governance Framework: design and implement a framework that integrates decentralized assets into the overall IT governance structure, using tools for centralized monitoring.
6. Implement Monitoring and Reporting: set up continuous monitoring and regular reporting protocols to detect and address vulnerabilities.
7. Train and Educate: provide training and awareness programs on governance policies, security practices, and compliance requirements.
8. Enforce Compliance: establish accountability measures and consequences for non-compliance.
9. Update policies regularly:  conduct regular reviews and updates of governance policies to stay current with new threats and regulatory changes.
10. Promote a Compliance Culture: ensure leadership support and open communication to emphasize the importance of IT governance.

Taking a Risk-Based Approach to Identify Critical IT Assets in Decentralized Controls

A risk-based approach, by identifying critical IT assets, involves systematically evaluating and prioritizing IT assets based on the potential risks they pose to an organization. This method helps ensure that resources are focused on protecting the most crucial components of the IT infrastructure.

Along with the steps outlined above, the Governance Team will have to develop an approach to identifying and managing critical IT assets in decentralized controls. Best practices in this process include the following considerations:

            1. Establish Risk Assessment Criteria

• Impact: Evaluate the potential impact of an asset being compromised, in terms of     factors such as financial loss, operational disruption, and reputational damage.
• Likelihood: Assess the likelihood of threats exploiting vulnerabilities in the asset,     considering past incidents and the current threat landscape.
• Compliance: Determine the regulatory and compliance requirements associated       with the asset.
• Sensitivity: Consider the sensitivity of the data handled by the asset, including          personal, financial, and proprietary information.
  
  2. Inventory All Decentralized IT Assets
• Asset Identification: Compile a comprehensive list of all decentralized IT assets,       including hardware, software, databases, and manual processes.
• Documentation: Record detailed information about each asset, such as Information security officer, Technical Information security officer, Application owner,   Business owner.
  
  3. Perform Initial Risk Assessment
• Data Collection: Gather information on each asset’s current state, including its         vulnerabilities, existing controls, and usage context.
• Risk Scoring: Assign a risk score to each asset based on the established criteria        (impact, likelihood, compliance, sensitivity).
  
  4. Categorize Assets by Risk Level
• High-Risk: Assets with high impact, high likelihood of being compromised,     significant compliance requirements, or handling highly sensitive data.
• Medium-Risk: Assets with moderate impact, moderate likelihood of being      compromised, some compliance requirements, or handling moderately sensitive            data.
• Low-Risk: Assets with low impact, low likelihood of being compromised, minimal      compliance requirements, or handling non-sensitive data.
  
  5. Prioritize Critical Assets
• High-Risk Assets: Prioritize for immediate review and enhanced security measures.
• Medium-Risk Assets: Schedule for regular monitoring and periodic review.
• Low-Risk Assets: Maintain basic security measures and monitor for changes in risk   level.
  
  6. Develop Action Plans for High-Risk Assets
• Immediate Actions: Implement immediate controls to mitigate risks by onboarding    into central solutions with remediation target dates.
• Long-Term Actions: Plan for integrating high-risk assets into centralized systems or enhancing governance and oversight.
  
  7. Continuous Monitoring and Reassessment
• Ongoing Monitoring: Continuously monitor high-risk assets for any changes in their status or emerging threats.
• Regular Reassessment: Periodically reassess all decentralized assets to account for             new vulnerabilities, changes in the threat landscape, and updates in regulatory            requirements.
  
  8. Documentation and Reporting
• Documentation: Maintain detailed records of all assessments, risk scores, and          actions taken for each asset.
• Reporting: Regularly report to senior management on the status of critical IT assets,         highlighting any changes in risk levels and actions taken.
  
  9. Escalation and Consequence Management Plan
• Escalation Procedures: Effective escalation procedures are crucial for managing  risks and addressing remediation promptly within an organization.

• Immediate Reporting: If a high-risk asset is compromised, immediately notify the IT governance team and senior management.
• Escalation Path: Define clear escalation paths for different risk levels, ensuring        timely involvement of appropriate stakeholders.
  
  10. Consequence Management
• Non-Compliance Penalties: Establish penalties for failing to comply with security      policies, such as restricted access or disciplinary actions.
• Remediation Requirements: Require immediate remediation actions for non- compliant assets, with deadlines and follow-up assessments.
• Incentives for Compliance: Provide incentives, such as recognition or rewards, for     departments and teams that consistently comply with governance policies and         maintain secure IT practices.

These recommendations provide organizations with a defined methodology to enhance security, ensure compliance, and improve operational efficiency in managing decentralized IT assets.

Expected Outcomes

Organizations that establish a Governance Committee, implement the protocol described above, and adhere to the recommendations will find that a strengthened, centralized IT asset program produces outcomes with benefits company-wide. These include:

• Reduced Cybersecurity Risks: With a dedicated governance team and clear policies in place, the organization can more effectively identify and mitigate potential security threats, reducing the risk of cyberattacks and data breaches.
• Stronger Regulatory Compliance: Adhering to updated governance policies and continuous monitoring ensures that the organization remains compliant with industry regulations and standards, avoiding potential fines and legal issues.
• Streamlined IT Operations: Centralized governance and monitoring improve the efficiency of IT operations, making it easier to manage and secure IT assets across the organization.
• Enhanced Awareness and Culture: Training programs and open communication foster a culture of compliance and security awareness, leading to more proactive and informed behavior among employees.
• Improved Decision-Making: A comprehensive understanding of the IT environment and the effectiveness of existing controls allows the organization to make better-informed decisions regarding IT investments and risk management strategies.
• Proactive Risk Management: By implementing these measures, organizations can significantly enhance their IT governance, security, and compliance, leading to a more resilient and efficient IT infrastructure.

The first line of defense

The more sophisticated our advanced technologies become, the more hackers and bad actors are finding new ways to breach even the strictest security tools and protocols. In this high-risk environment, organizations must make the transition from decentralized to centralized IT asset management to create a more secure, efficient, and compliant IT infrastructure.

Dedicated governance teams must thus be diligent in their mission to ensure focused oversight, monitoring, and risk management of their IT systems. Governance committees that recognize the criticality of their role will understand that they bear responsibility for being their company’s first line of defense in maintaining cybersecurity. Implementing clear policies and standards, conducting thorough IT asset inventories, and assessing existing controls are crucial steps in identifying and mitigating vulnerabilities.

Instituting this comprehensive governance approach mitigates risks, while fostering a culture of security and compliance, which ultimately strengthens the organization's overall resilience against cyber threats.

Author:

Rajendra Prasad Jakku is Vice President, Information Security Specialist at a leading global financial institution, where he heads Identity and Access Management (IAM) Control Testing. Mr. Jakku deploys nearly 25 years of Information Security and cybersecurity experience with blue-chip financial services companies worldwide to protecting enterprise information systems, improving the risk posture of IT assets, information security governance and risk assessment, remediation governance, audit management, and anti-money laundering compliance. In his current role, Mr. Jakku leads and mentors an Information Security Control Testing team orchestrating key procedures to ensure sustainable information security control environments, develops and implements robust audit strategies to test design and operational effectiveness of information security controls and solutions, evaluates audit test cases, and provides expert recommendations to the management and stakeholders of Chief Security Office and Technology teams.