Introducing Two New Security Standards for Risk Analysis—Part II – Risk Analysis Standard

By Jim Hietala, VP Security, The Open Group

Last week we took a look at one of the new risk standards recently introduced by The Open Group® Security Forum at the The Open Group London Conference 2013, the Risk Taxonomy Technical Standard 2.0 (O-RT). Today’s blog looks at its sister standard, the Risk Analysis (O-RA) Standard, which provides risk professionals the tools they need to perform thorough risk analyses within their organizations for better decision-making about risk.

Risk Analysis (O-RA) Standard

The new Risk Analysis Standard provides a comprehensive guide for performing effective analysis scenarios within organizations using the Factor Analysis of Information Risk (FAIR™) framework. O-RA is geared toward managing the frequency and magnitude of loss that can arise from a threat, whether human, animal or a natural event–in other words “how often bad things happened and how bad they are when they occur.” Used together, the O-RT and O-RA Standards provide organizations with a way to perform consistent risk modeling, that can not only help thoroughly explain risk factors to stakeholders but allow information security professionals to strengthen existing or create better analysis methods. O-RA may also be used in conjunction with other risk frameworks to perform risk analysis.

The O-RA standard is also meant to provide something more than a mere assessment of risk. Many professionals within the security industry often fail to distinguish between “assessing” risk vs. “analysis” of risk. This standard goes beyond assessment by supporting effective analyses so that risk statements are less vulnerable to problems and are more meaningful and defensible than assessments that provide only the broad risk-ratings (“this is a 4 on a scale of 1-to-5”) normally used in assessments.

O-RA also lays out standard process for approaching risk analysis that can help organizations streamline the way they approach risk measurement. By focusing in on these four core process elements, organizations are able to perform more effective analyses:

  • Clearly identifying and characterizing the assets, threats, controls and impact/loss elements at play within the scenario being assessed
  • Understanding the organizational context for analysis (i.e. what’s at stake from an organizational perspective)
  • Measuring/estimating various risk factors
  • Calculating risk using a model that represents a logical, rational, and useful view of what risk is and how it works.

Because measurement and calculation are essential elements of properly analyzing risk variables, an entire chapter of the standard is dedicated to how to measure and calibrate risk. This chapter lays out a number of useful approaches for establishing risk variables, including establishing baseline risk estimates and ranges; creating distribution ranges and most likely values; using Monte Carlo simulations; accounting for uncertainty; determining accuracy vs. precision and subjective vs. objective criteria; deriving vulnerability; using ordinal scales; and determining diminishing returns.

Finally, a practical, real-world example is provided to take readers through an actual risk analysis scenario. Using the FAIR model, the example outlines the process for dealing with an threat in which an HR executive at a large bank has left the user name and password that allow him access to all the company’s HR systems on a Post-It note tacked onto his computer in his office in clear view of anyone (other employees, cleaning crews, etc.) who comes into the office.

The scenario outlines four stages in assessing this risk:

  1. .    Stage 1: Identify Scenario Components (Scope the Analysis)
  2. .    Stage 2: Evaluate Loss Event Frequency (LEF)
  3. .    Stage 3: Evaluate Loss Magnitude (LM)
  4. .    Stage 4: Derive and Articulate Risk

Each step of the risk analysis process is thoroughly outlined for the scenario to provide Risk Analysts an example of how to perform an analysis process using the FAIR framework. Considerable guidance is provided for stages 2 and 3, in particular, as those are the most critical elements in determining organizational risk.

Ultimately, the O-RA is a guide to help organizations make better decisions about which risks are the most critical for the organization to prioritize and pay attention to versus those that are less important and may not warrant attention. It is critical for Risk Analysts and organizations to become more consistent in this practice because lack of consistency in determining risk among information security professionals has been a major obstacle in allowing security professionals a more legitimate “seat at the table” in the boardroom with other business functions (finance, HR, etc.) within organizations.

For our profession to evolve and grow, consistency and accurate measurement is key. Issues and solutions must be identified consistently and comparisons and measurement must be based on solid foundations, as illustrated below.


Chained Dependencies

O-RA can help organizations arrive at better decisions through consistent analysis techniques as well as provide more legitimacy within the profession.  Without a foundation from which to manage information risk, Risk Analysts and information security professionals may rely too heavily on intuition, bias, commercial or personal agendas for their analyses and decision making. By outlining a thorough foundation for Risk Analysis, O-RA provides not only a common foundation for performing risk analyses but the opportunity to make better decisions and advance the security profession.

For more on the O-RA Standard or to download it, please visit:

Jim Hietala, CISSP, GSEC, is the Vice President, Security for The Open Group, where he manages all IT security and risk management programs and standards activities. He participates in the SANS Analyst/Expert program and has also published numerous articles on information security, risk management, and compliance topics in publications including The ISSA Journal, Bank Accounting & Finance, Risk Factor, SC Magazine, and others.

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