During the last weeks, with all the discussions about security- and privacy-related issues in social networks like Facebook or SchülerVZ, I’ve had some talks with people. My position is that these issues are a result of bad software architecture. The counter argument sometimes has been that when building these networks the focus has been on functionality, not security – and that the business model of these networks is based on the functionality. What was meant by that is that you should first care about functionality and that security is somewhat irrelevant because it doesn’t help you in achieving your business goals.

However, that is fundamentally wrong. The current issues prove that the business model of these social networks is threatened by security weaknesses. They also prove (like any good software architect knows) that it is virtually impossible to add good security afterwards. You have to build it in from the very beginning. Trying to fix issues by blacklists or whitelists or by adding some URL obsfucation or something like that always will address symptoms, not the cause.

What we currently observe at many social networks and eCommerce sites is that there is more attention on security and privacy issues – and the providers are struggling with this because their software security architecture doesn’t allow to flexibly react on this. For sure some of these providers are somewhat reluctant in changing their privacy and security settings because their model relies on “openness”. Anyhow, even Facebook has had to make changes, and that will continue.

Good software security architecture would allow these providers to just change some settings by configuration. That would be easy and not very expensive if the software were well constructed, with security in mind from the beginning. That includes the ability to flexibly use different authentication mechanisms and a consistent authorization model which is configurable. For sure there is some more work to do in architecting and developing such a system – but it is significantly less work than trying to fix problems afterwards (and, besides this, doing it from the beginning is a solution and not a patch which leads to patchwork with security and privacy holes).

However, the most important lesson one can learn from that situation is that software security is relevant to any business model. If it inhibits growth, if it leads to a loss of trust and in consequence of users then it affects the business. The  argument that it is first about time-to-market isn’t really valid. It doesn’t take much more time and efforts to do software security right then to ignore this – especially because some security always has to be added before releasing a software. The real valid rule is: You always will pay for bad software architecture. And you will pay for bad software security architecture. That is like in real life architecture and construction – go back to the bible, even there it is told that you shouldn’t build your house on sand. Ignoring software security at the beginning is nothing else than building houses on sand. And a good business model which thinks strategic doesn’t ignore that fact.

Building software without a good software architecture is sort of building a car without breaks. You can argue that the car is for driving, not breaking. And you can argue that it is about functionality not security. But would you trust in a car without breaks?

We’re talking a lot about the need for IT to align with business. But it’s not about a one way road. There is no doubt that IT has to think much more “business”. Risk focus (here and here), performance management, the understanding of IT as Information Technology instead of Information Technology, the path towards an ERP for IT,… I think that many CIOs and CISOs are well aware of this and many of them are working towards that goal.

However, if I look at the business side, it appears to me that IT still is somewhat ignored when it is about alignment. Two examples out of many from my practice:

• When talking about GRC initiatives at the IT level, customers frequently complain about risk management initiatives with focus on organizational risks where they are not even able to start a discussion about integration. However, any IT risk is just a risk because its associated with organizational and (sometimes) strategic risk. Thus, you can’t ignore the IT risk perspective from an “Enterprise” GRC perspective (which, by the way, is sort of an arrogant term, ignoring exactly the fact I’m discussing here – “Business GRC” would be much more appropriate). You can’t run a business without IT. It’s part of the operations. And IT risks might have severe impact on your overall business performance – look at fraud in financial institutions, data theft, and so on.
• When talking with the Business GRC vendors – look at the upper layer here – some of them (not all!!!) show an attitude of “we’re doing the relevant business GRC instead of the irrelevant IT things” and claim that they don’t need to provide integration or to support the IT part of the business.

However, given that IT is an important part of every business (the German Bafin – the government agency responsible of auditing and controlling the financial institutions – explicitly claims that IT is a core part of banking business and has to be understood that way), that means ignoring risks. And, even more, it means ignoring that there are elements in risk management which are provided by IT. You need automated controls besides the manual controls. And all the Business GRC tools are IT tools, by the way.

The problem from my perspective is that as well some vendors as many responsibles in the organizations don’t want to play with the IT guys. However, they could not only do a much better job by better executing their controls but they as well could do their job correctly, by really adressing the whole breadth of (operational and strategic) risks.

That’s just one example where business has to learn to better align with IT – and it’s not the only one. Look at the description of business services. For sure there has to be a translation into IT services at some point of time. But before you can do that, you have to have something which can be translated. And frequently, the problem isn’t the translation but what has to be translated. If the original text isn’t sufficient, the translation result never will be. Everyone dealing with software development probably has made this experience: Many issues in software development are caused by an insufficient descriptions of the requirements.

I think that it is time that not only IT understands that it exists only because it provides value to the business but that businesses rely on IT and thus have to align with IT. And that Business/IT alignment is definitely not only something where IT has to learn a lot. Businesses have to do as well – to understand the operational impact of IT (and IT risks), to describe their service requirements, to accept that the operational risk associated with an IT risk has to be balanced with the opportunities of a business service. Just think about all the insecure applications we have in organizations just because a department required them and IT security concerns have been ignored. That has not only been because IT wasn’t able to translate the IT risk into an operational risk – it has been as well because business didn’t understand IT.

Thus, both have to learn. And sometimes it appears to me that business has to learn even more than IT. Not only the people within organizations, but as well the consultants at the different levels. So if your consultant for risk management hasn’t yet covered the operational impact of IT risks and how to deal with that, you should ask him why – and if he doesn’t provide a valide answer, you should re-think the engagement…

There is a constant pressure not only on IT but all areas of organizations to reduce costs. However, that frequently ends up with higher risks and potentially higher costs due to these risks. The problem is: Most organizations, especially in controlling and management, think much more about cost than risk. But cost savings (which are not necessarily negative) without a risk view are a risk – somewhat of a tautology, I know…

That is why Risk Management should be a standard and central element in management, as well for business as IT.

Read the rest of this entry »

The topic of IT-Business Alignment isn’t really new. It is discussed for years right now. And several software vendors, mainly in the area of “Business Service Management” claim to solve the threats in that area. But, honestly: I believe that we are, in most cases, far from a real IT-Business Alignment. I have blogged several times around this, topic (here, here, here, and here).

But let’s start with my definition of what IT-Business Alignment is: IT does what the business requires – not more, not less. That includes aspects like the ability to efficiently respond on new business requests, the ability to report on and enforce business controls (including all the GRC requirements), and the efficiency of IT itself in the sense of a streamlined, lean IT organization.

There are, from my view, two main steps to go:

1. Reorganize IT
2. Implement a consistent control layer between Business and IT

From my perspective, the lessons we’ve learned from outsourcing and outtasking are a good basis for IT reorganization. Strategy has to be in-house – that is the core part of the IT department. Other parts might be done inhouse as well, but organized in own “centers” with clearly defined SLAs. An IT organization which consists of a strategy/architecture department for guidelines, a GRC department which focuses on all relevant controls, and some decentralized IT knowledge in business organizations (define the requirements for applications and other IT services) might be the lean approach. That requires the competency for guidelines and strategies, including a strong influence on sourcing decisions. But IT itself would be pretty small. The “doing”, e.g. running systems can be done inhouse – there is no need to outsource this. But in that case, these are seperate departments which act, like described above, like external entities (or like the internal facility management or corporate security or any of these internal service providers).

The layer between IT and Business is, from my perspective, an GRC layer which goes well beyond Identity and Access Management related GRC approaches and well beyond BSM/ITSM, providing a consistent framework for business controls for IT.

For sure we can’t change an organization immediately. There are several prerequisites:

1. The CIO role has to change, clearly focusing on that IT-Business Alignment, with the responsibility for GRC as main task.
2. You will need architects and strategists for the central department.
3. You will need persons with a good IT understanding in the business departments.
4. You will need managers which can really manage the IT “centers” as business managers.
5. GRC tools have to go beyond just IAM or BSM support, moving towards real platforms.

Thus it is a long way to go. But I strongly believe that we have to go that path, for more efficient organizations and to reach the target of IT-Business alignment.