Implementing information technology for competitive advantage: Risk management issues

As the use of information technology (IT) has expanded, managers of organizations have come to realize that IT can be used to gain, sustai, or combat competitive advantage. The implementation of IT involves significant risks both from external sources and from the technology and process of implementation. Risk management is the science and art of recognizing the existence of threats, determining their consequences on resources, and applying modifying factors in a cost-effective manner to keep adverse consequences within bounds. Strategies for handling risk necessarily address one or more of the components of risks identified here. The appropriate strategy depends on the nature of the risk and other situational variables that influence the organization's range of choices. This paper discusses approaches to risk analysis appropriate for IT and contains some suggested tools for risk analysis and management.