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  • Writer's pictureChris Puderbaugh

Cyber Risk – A Better Approach to Measurement & Evaluation

In the advanced stages of digital transformation, it's imperative to acknowledge a universal truth: in today's landscape, digital infrastructure has become the cornerstone for all organizations, be they large financial institutions or small manufacturing enterprises. All companies have evolved into technology-driven entities. This transformation brings forth distinctive challenges within the realm of cyber risk management. The expansion of digital environments, coupled with the ever-growing threats, has made the task of managing cyber risk a formidable endeavor.

This challenge is further compounded by a widespread misconception that "digital" risk is solely comprehensible through conventional security technologies. When we widen our perspective on cyber enterprise risk to encompass the sprawl of data, it becomes apparent that a broad array of technologies and software often go unnoticed when assessing cyber risk.

A profound comprehension of cyber risk mandates that all forms of digital risk are made visible and assessed. To enhance this comprehension, at Pellonium, we've categorized technologies into three distinct functions, each requiring its unique risk assessment:

  1. Revenue Generation: These technologies, though varying by industry, encompass tools integral to a business's operations, such as e-commerce platforms, payment processors, booking and subscription management software, advertising platforms, data monetization tools, and design suites. Any impairment to these technologies directly impacts a company's revenue generation capabilities, which can be approximated through a direct or partial correlation with revenue streams.

  2. Business Operations: Serving as the foundational framework for the digital enterprise, these technologies include cloud infrastructure, enterprise resource planning (ERP) systems, customer relationship management (CRM) tools, supply chain management (SCM) software, human resources management systems (HRMS), and collaboration tools. These technologies exist to facilitate efficient revenue-generating processes, and any disruption in functionality can be viewed as a detriment to enterprise productivity.

  3. Revenue Protection: These are synonymous with the traditional cybersecurity stack. Established organizations have invested in data security, network security, cloud security, and application security capabilities. The primary purpose of these investments is to mitigate any threats that revenue-generating and business operation technologies may encounter, thus safeguarding a company's ability to generate revenue efficiently. From a risk modeling perspective, calculating a return on these investments necessitates an understanding of how the likelihood of a cyber incident fluctuates across the performance spectrum of these capabilities.

This categorization enables the Pellonium Risk Intelligence platform to deliver a comprehensive view of the enterprise technology stack, well beyond existing methods and tools. The challenge now is to organize this data exhaust systematically to measure risk across the expanding digital landscape, while also considering the evolving threat landscape. To achieve this, Pellonium employs a proprietary analysis method called Pellonium Cyber Risk (PCR), which continuously integrates data from technologies across all three functions to model the value and risk introduced. This data is then indexed against known threat activity, providing a holistic understanding of the current cyber risk within an environment.

Cybersecurity has sometimes been criticized for its excessive reliance on control-centric measures, assuming that risk can be managed solely by deploying protective technologies in a few key areas of an enterprise environment (the more controls, the better). By incorporating all digital data sources into the cyber risk modeling process, organizations can strike a balance between the revenue potential of key investments and the cyber risk these investments bring. The ultimate outcome is an awareness of and alignment with cyber risk in accordance with the organization's strategic direction.

This is not a cost-saving or budget optimization initiative; it represents a fundamental redesign for how cyber enterprise risk management is conducted. Ultimately, the true measure of cyber maturity lies in the continuous management of risk aligned with business objectives—an objective that Pellonium enables with precision

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