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The current IT environment makes yesterday's look like a relative cakewalk. Today, IT must ensure that growing volumes of information are secure, increasingly complex information infrastructures remain up and running, and exacting requirements from an expanding range of regulatory and audit bodies are fixed and sustained.



All this with budgets that are lower than they once were.

With no outside stimulus plan in the making to alleviate the pressure, IT managers are being forced to devise their own bailout strategy and yet again find ways to accomplish more with less -- without throwing good money after bad.

The good news? It can be done. According to a February 2009 report by the IT Policy Compliance Group (ITPCG), improvements in information security and operational assurance result in lower financial risk and loss and lower costs for audit. By following best practices for performance-based budgeting, organizations avoid overspending on activities that offer a negligible payoff or under-spending on high-yield activities and, instead, can focus on IT practices that deliver bottom-line results. Better yet, for the shrinking IT budgets of today, managers can now focus on the practices that are proving to reduce risks, reduce costs and improve results.

Giving risk a name and a price

If there is one thing that is clear today, it is that every activity has some risk associated with it -- including IT use. According to the ITPCG survey, the top business risks from the use of IT are data loss and theft and business downtime. In fact, the theft or loss of customer data was rated as the highest business risk by more than 72 percent of organizations, while business disruptions and the loss of integrity were rated as the top business risk by 64 percent and 61 percent of organizations, respectively.

The trouble is, only about one in ten organizations are allocating spending for the practices that are reducing what are considered the highest priority risks. What's more, this misalignment comes with a price.

Organizations with the fewest losses or thefts of sensitive information, the least amount of business downtime, and the fewest deficiencies to correct to pass audit also have the lowest financial exposure. These high-performing organizations experience fewer than three losses or thefts of sensitive information, less than six hours of business downtime, and fewer than three audit deficiencies a year. And the financial exposure among these organizations is less than 0.5 percent of annual revenue from the loss of theft of customer data, while exposure from disrupted business ranges from just 0.02 to 0.2 percent of revenue. Furthermore, these organizations also spend the least on regulatory audit, with average spending 52 percent lower than most other firms.

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