How does your company mitigate the risk of data security threats?

Is your company management adopting a policy of “It’s other peoples money”?

In a recent thread on LinkedIn - Jody Keyser shared some quotes from David Vose’s book on risk, reliability and computerized risk modeling:  Risk Analysis a quantitative guide.

The responses to correctly identified and evaluated risks are many but generally fall into one of the following categories:

- Cancel Project
- Eliminate ( do it another way)
- Transfer (insure back to back contract)
- Share (with partner or contractor )
- Reduce (take a less risky approach)
- Add a contingency (increase budget, deadline etc.,to allow for possibility of risk)
- Collect more data to better understand risk
- Do nothing (cost is just too dang high)
- Increase ( maybe the plan is too cautious )

In my experience – when it comes to data security, data loss prevention, DLP projects – the top 2 responses to data security threats are “accept the risk” followed by “cancel the project” in a close second place.

The other alternatives are almost all non-starters. The question is – why?

Eliminating risk by changing the business process is often not an option or too much trouble for employees. For example – consider the process of transferring documents to external contractors – even though it’s trivial to encrypt documents inside a Zip file and share the password – most companies don’t make it part of their security procedure and those that do require encryption of documents sent to external business partners, don’t deploy DLP monitoring to ensure compliance with the encryption policy.

There are multiple reasons for data security risk being accepted by business managers.  Most are related to cost, complexity, changing business requirements and a tacit disbelief in effectiveness of technology in preventing data theft and fraud.

The reasons for accepting data security risk are related to  the difference between being secure and feeling secure.  Since most companies don’t monitor data flows, they don’t know how many sensitive digital assets are being leaked to the competition – ergo they don’t have the empirical data to analyze their data security threats and measure data security risks in terms of dollar threat to the business.  This would lead to enable a business to deploy data security countermeasures and be secure at an acceptable cost. It would also enable them to measure the cost effectiveness of their data security technology and challenge their innate beliefs and skepticism.

However – the company management already feel secure because they have delegated that part of  the business to the information security folks and reading the papers tells them that customers (not the business management) pay the cost of a data security breach.

As a kid growing up in South Jersey – when there was the occasional report of an urban boondoggle or million dollar NASA toilets – my Dad (who worked for RCA on defense projects and knew about these things) would always use the expression – “Other peoples money” or if it was closer to home – “Pa’s rich and Ma don’t care”…which is really close to home this year for Americans as President Obama takes the US to an unprecedented $1.35 trillion budget deficit in  2010.

In many corners of the corporate HQ, in fact, there are plenty of execs who, from time to time, would probably take pleasure in watching IT fail, a la Lehman Brothers. …Why the new normal could kill IT..from my colleague - Michel Godet

I believe that there are 3 root causes for why many organizations worldwide do not take a leadership position in enterprise information protection.

1. Preventing information security events is an admission of weakness. Who wants to spend money on something when the first step is admitting that you’re vulnerable and that your existing security systems, policies and procedures do not meet business requirements?
2. We live in an age of instant gratification. Need music -go to Deezer. Need security – get a UTM from Checkpoint.  Click on a set of canned DLP policies for PCI DSS 1.2 compliance – never mind that you design and manufacture motorcycles.
3. The need to walk on the safe side, not on the wild side. Who wants to spend 6-7 figures on an EIP (enterprise information protection) system that requires data discovery from someone who isn’t your accountant, a complex policy implementation by people who need to learn your business, integration with internal procedures and processes with employees who could care less, and buy in from a CEO who is scrappling for survival with the board during the biggest financial crisis in 80 years?
   
   Especially after the CEO has sworn off Enterprise software for Lent.

The recent case of the Opsec security violation on Facebook in Israel reported by the Jerusalem Post, is a good example of how a hierarchical organization (Army) is threatened by a flat social network. The good news was that the security countermeasure was found the social network itself – herein lies the lesson.

The IDF was forced to cancel a recent arrest operation in the West Bank after a soldier posted information about the upcoming raid on his Facebook page.The operation was scheduled to take place several weeks ago in the Binyamin region. The soldier, from an elite unit of the Artillery Corps, posted on his Facebook page: “On Wednesday, we are cleaning out [the name of the village] – today an arrest operation, tomorrow an arrest operation and then, please God, home by Thursday.”

The status update on the soldier’s page was revealed by other members of the soldier’s unit. His commanders then updated Judea and Samaria Division commander Brig.-Gen. Nitzan Alon, who decided to cancel the operation out of concern that the mission had been compromised.

Organizations need to leave the static top down control frameworks a few times a year and look outside the organization for links and interdependencies – and talk to the soldiers in the trenches in customer service, field sales and field service.

The information you will get from people outside your firm and from people with dirty hands is far more valuable than rehashing the ISO27001 check list in an audit.

The most valuable data is from questions you haven’t asked yet – not from a checklist in an Excel spreadsheet in the hands of a junior auditor from KPMG.

Automated discovery of data at rest is  an unsurmountable  challenge for institution with large quantities of PCs, data and thousands of document formats, most of which are not well-documented and all the application and database server technologies that were ever invented. Smaller companies may find it either unnecessary or not cost-effective.

Discovery of data at rest is also  a double-edged sword.  From a compliance perspective, it’s not only not required by PCI DSS 1.x but it can create exposure issues that no business in their right mind would want to deal with.  Also – why would a business want to buy products and services from a technology vendor vendor and allow them to “discover” their data?

Love to hear your comments and what you think.

To be able to do something before it exists,
sense before it becomes active,
and see before it sprouts.

The Book of Balance and Harmony

(Chung-ho chi).
A medieval Taoist book

Will security vendors, large to small  (Symantec, Mcafee, nexTier, ANBsys and others..) succeed in restoring balance and harmony to their customers by relabeling their product suites as unified content security (Websense) or enterprise information protection (Verdasys)?

I don’t think so.

Unfortunately – data security is not an enterprise suite kind of problem like ERP. You don’t have harmony, synergy and control over business process; you have orthogonal attack vectors:

• Human error – cc’ing a supplier by mistake on a classified RFP document
• System vulnerabilities – Production servers with anonymous file transfer protocol (FTP) turned on
• Criminal activity – Break-ins, bribes and double agents (workers who spy for other groups or companies)
• Industrial competition/breach of non-disclosure agreements – the actuary who went to work for the competition

After 5 years of hype, most  customers have a high awareness of DLP products but fewer (especially outside the US) are buying DLP technologies  and even fewer are succeeding with their DLP implementations. This stems from the customer and vendors’ inability to answer two simple questions:

1. Who is the buyer?
2. What is her motivation to protect information?

A common question I hear from my clients, is, “Who should ‘own’ data security technology?” Is it the vice president, internal auditor, chief financial officer, CIO or CSO, our security consultants or our IT outsourcing vendor; IBM Global Services?

If there is no clear business need for information protection (the kind that a CEO can enunciate in a  sentence) – the company is not going to buy DLP technology.

The business need for data security derives directly from  the CEO and his management team. In firms with outsourced IT infrastructure, the need for data security becomes more acute as more people are involved with less allegiance to the firm.

To help qualify an organization’s business need for DLP technology, let’s examine the decision drivers, or what compels companies to buy data security products, and the decision-makers, or those who sign off on the products. Let’s look at seven industries: banking, credit card issuing, insurance, pharmaceuticals, telecommunications, health care and technology.

INDUSTRY	TYPICAL DATA SECURITY DRIVERS	DECISION – MAKERS
BANKING	A real event, such as theft of confidential customer account information by trusted insiders Privacy regulations such as the Gramm-Leach-Bliley Act, HIPAA The Sarbanes-Oxley Act, for transparency and timeliness in reporting of significant events	CSO or CIO
CREDIT CARD ISSUERS	Ongoing theft of customer transactional information by customer service reps Data breach threat to credit card numbers that haven’t yet been printed on plastic cards and issued to card holders Privacy regulations, Sarbanes-Oxley , nondisclosure agreements with business partners	The security officer or information security officer (many issuers have separate functions for physical and information security)
INSURANCE	A real event, such as theft of customer lists by competitors Fear of losing actuarial data Exposure to data leakage of credit card numbers in online systems	General counsel, VP of internal audit, CFO
PHARMACEUTICALS	Theft of chemistry, manufacturing and control information, product formulation and genome data by trusted insiders Difficulty in preserving secrecy of sensitive intellectual property prior to patent filings Sensitivity of company records during due diligence processes	General counsel, CFO, chief compliance officer
TELECOM/ONLINE BUSINESS (Telecom service providers and large online operations such as Yahoo collect and aggregate huge quantities of data, and the higher up the value chain you go with data aggregation, the more valuable and vulnerable the asset.)	Prepaid code files Pricing data Strategic marketing plans Call detail records (analogous to credit card transaction records, these are extrusions by customer service representatives to private investigators and difficult to detect) Customer credit card records	VP of internal audit, VP of technologies
HEALTH CARE	Privacy regulations/HIPAA Need to protect pricing data of drugs and supplies purchased by the health care organization	CSO, VP of internal audit
TECHNOLOGY COMPANIES	Theft of: Source code Designs, pictures and plans of proprietary equipment Strategic marketing plans	CEO, CTO

At a recent seminar on information security management, I heard that FUD (fear, uncertainty and doubt) is dead, that ROI is dead and that the insurance model is dead. Information security needs to give business value. Hmm.

This sounds like a terrific idea, but the lecturer was unable to provide a concrete example similar to purchasing justifications that companies use like: “Yes, we will buy this machine because it makes twice as many diamond rings per hour and we’ll be able corner the Valentine’s Day market in North America.”

The seminar left me with a feeling of frustration of a reality far removed from management theory. Intel co-founder Andy Grove said, “A little fear in an organization is a good thing.” So FUD apparently isn’t dead.

This post will help guide readers from a current state of reaction and acquisition to a target state of business value and justification for information security, providing both food for thought and practical ideas for implementation.

Most companies don’t run their data security operation like a business unit with a tightly focused strategy on customers, market and competitors. Most security professionals and software developers don’t have quotas and compensation for making their numbers.

Information security works on a cycle of threat, reaction and acquisition. It needs to operate continuously and proactively within a well-defined, standards-based threat model that can be benchmarked against the best players in your industry, just like companies benchmark earnings per share.

In his classic Harvard Business Review article, What Is Strategy?, Michael Porter writes how “the essence of strategy is what not to choose … a strong completive position requires clear tradeoffs and choices and a system of interlocking business activities that fit well and sustain the business.” The security of your business information also requires a strategy.

Improvement requires a well-defined strategy and performance measures, and improvement is what our customers want. With measurable improvement, we’ll be able to prove the business value of spending on security.

Ask yourself these questions:

1. Is your information asset protection spending driven by regulation?
2. Are Gartner white papers your main input for purchasing decisions?
3. Does the information security group work without security win/loss scores?
4. Does your chief security officer meet three to five vendors each day?
5. Is your purchasing cycle for a new product longer than six months?
6. Is your team short on head count, and not implementing new technologies?
7. Has the chief technology officer never personally sold or installed any of the company’s products?

If you answered yes to four of the seven questions, then you definitely need a business strategy with operational metrics for your information security operation.

Now let’s look at three steps for developing a business justification for spending on information security.

1. Choose a business unit strategy

• Take a break from the daily firefighting and choose a competitive strategy for infosec operations. Is it low-cost? Is it single-vendor? Is it Linux desktops?
• Start by implementing a consistent set of activities, for example, standardizing on diskless thin clients, remote desktops and Windows Terminal services.
• Then think how activities can reinforce each other, such as installing personal firewall software that reports on intrusion attempts to a central server so that you can plan your response to future attacks.
• The most productive strategy identifies sets of activities that optimize your efforts. Perhaps you have a flat spaghetti network of servers and workstations. Segment the network into virtual LANs, put the application servers on one segment, the data servers on another and client workstations on departmental segments and so forth. Performance and security will improve, and you’ll be able to monitor content effectively. You’ll spend less time firefighting and more time thinking how to optimize the operation.

2. Add business value and measure your results

There are widely practiced models and metrics that work for all kinds of business units. For instance, if you want to evaluate cash flow, then measure cash flow from operations or free cash flow (FCF), which is cash from operations minus capital expenditures. FCF omits the cost of debt, but it is an objective indicator that can be measured every day.

• Set up indicators and publish them once a week on the company intranet for everyone to see. Start with three indicators: the number of network anomalies your intrusion-detection system found that week, the current patch cycle time and how much overtime the team worked.
• Do continuous security audits. Purchase a tool for network auditing and run it once a week on a different part of the network. The guys over in the warehouse stopped doing full physical counts once a year 15 years ago. They count a little bit of inventory every day with bar-code terminals. Have a consultant help you set it up and run audit yourself.
• Run security awareness programs. Make training hours an indicator.
• Build a threat model and maintain a database of assets, threats and vulnerabilities. Start today. Check out the SANS Institute for tools.

3. Drive the message home

Send out your CTO to install your company’s products himself, follow customers back to their offices, observe howthey do the install and take notes. Update the threat model with the CTO’s findings. He’ll sign your next purchase request for software security tools in a flash. Trust me.

So where and how does DLP fit into the compliance equation?

Let’s start with COSO recommendations for internal controls:

“If the internal control system is implemented only to prevent fraud and comply with laws and regulations, then an important opportunity is missed…The same internal controls can also be used to systematically improve businesses, particularly in regard to effectiveness and efficiency.”

The detailed reasons why people fail at DLP implementations merits a separate post –  but it’s a lot like why over 50% of the content management implementation from vendors like Vignette never made it to production in the 90s – the root cause was that there was no real business case for the technology.

I want to talk about why  building a business case for Data security is critical to the success of your data security/data loss prevention/fraud prevention project.

If you run a business or business unit – you must ask yourself two questions

Is data security a major operational risk for your business?

Could be.

Unlike a computer virus – internally launched attacks on data  that result in data leaks, breach of  integrity, loss of data availability and non-compliance are your problem, not someone elses.

Unlike business processes – data risk cannot be outsourced.

Unlike balance sheet assets – companies don’t know their current financial exposure to data security threats.

The next question is should you invest in DLP technologies? Any one with only a nickel in their pocket (and in this market – that’s a lot of companies…) will say “Why should we when we don’t know the return on investment?  In order to answer your questions, you must measure your value at risk using a data security based risk assessment This is a simple, almost obvious notion – you measure risk of asbestos poisoning by checking your building insulation and you measure risk of fire damage by checking the building itself and various policies, procedures and equipment related to fire prevention.

Think about smoke detectors. You can’t put up an office building without smoke detectors (in Israel – the regulator has set a minimum density per square meter and the prices are low enough that the contractors will basically put in as many as you want). Why would you think of managing your data without the comparable data breach security monitoring equipment?

Data security based risk assessment uses DLP technology (the test equipment) and a best practices analytical risk model to measure the value of your data and your value at risk. Within a couple weeks, you should be able to get a picture of your current data security events, know your data value at risk in Euro and build a prioritized program for cost-effective data security controls in the people, process and technology planes. What you do then – is up to you.

Most companies I know in Europe and Israel are not at a sufficient level of security maturity to do this kind of thing themselves – and will need an independent consultant – one with specific domain expertise in their industry vertical,  specific data security expertise and ability to do analytical threat modeling – installing Checkpoint firewalls doesn’t count and you really want someone who is vendor neutral.

American companies are rule-based. 40% of US companies state that they have implemented some form of DLP technology.
European companies are principles-based. In EMEA, 80% of chief security officers do not have plans to implement DLP in 2010.