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Over the years, cloud solutions have emerged as one of the pillars of business innovation and enterprises of all sizes are embracing the technology with aplomb. Essentially, the technology is all about delivering a range of software and hardware services for businesses over the internet. This is done by leveraging a network of remote servers, thus reducing the dependence of the organization on the conventional in-house infrastructure. Truly, the benefits of cloud based solutions are immense, from providing better data storage to enhancing flexibility, boosting scalability, improving business workflows and increasing collaboration between employees.

It comes as no surprise that more and more small-sized businesses and large enterprises are switching to the technology in various ways, from cloud telephony solution to cloud call center software, and more. But regardless of the fact that these solutions have huge potential, they also bring some risks for businesses. And it is the responsibility of organisations to understand the risks and threats related to any innovation before they embrace it, no matter how amazing it sounds. Having a proper risk assessment framework is essential to ensure that you are able to minimize them and unlock the performance potential of the technology. Let us explain these risks and the ways to resolve them for maximizing the benefits in the context of this technology.

Assessing the risks and threats on the cloud

There are some major risks and threats that any business on the way to cloud adoption must recognize. At the same time, assessing the probability of any issues arising from these risks and having proper plans in place for mitigating such occurrences should be their top priorities even before they implement cloud based solutions. Not doing so means that the benefits sought from the technology will be reduced to negligible. To make things worse, your business may fall prey to serious incidents which could have been avoided if proper action was taken. Here are the risks you need to be aware about.

The issues of shared technology

The cloud environment is typically a multi-tenant one, with different clients sharing the infrastructure, applications or databases. This may be in various forms- Platform as a Service (Paas), Infrastructure as a Service (IaaS) or Software as a Service (SaaS). Although SaaS is considered the best option for Indian SMEs, there are obvious security-related downsides and concerns about storing data in such an environment. When physical resources are shared, the security of data of individual clients greatly depends on its logical separation across multiple layers. If unauthorized users are somehow able to break through these separation mechanisms, they can easily access the restricted areas. This also opens up the risk of destruction of data, particularly if stored on shared media.

Governance and control risk

A major challenge associated with cloud computing is the risk of governance and control. Proper IT governance is the only way to ensure that IT assets are implemented by the provider only according to the agreed procedures, policies and protection mechanisms. The problem of insufficient due diligence often arises when enterprises move to the cloud blindly, even without knowing these policies and procedures that the provider follows. They seldom have an idea about how backup and recovery failures or disaster scenarios would be handled, which is not something to ignore because the stakes can be high. Further, not ensuring that the provider’s assets are controlled and maintained can account into a major risk factor for the business.

Compliance risk

Another major risk that companies adopting cloud based solutions encounter relates to compliance. That is a concern for any business looking for cloud storage or backup services. On taking the data from its internal storage to a cloud, any business has to ensure compliance with industry regulations such as HIPAA for healthcare companies and PCI DSS for public retail businesses. Those who fail to do so may face legal hassles due to regulatory non-compliance. This is something they need to verify while collaborating with the cloud service provider.

Apart from these major concerns, there are certain organisation-specific issues that companies could face while embracing cloud based solutions. These include managing multiple clouds, cost containment issues, segmented adoption and usage and complications related to migration. Now that you know all about the risk of cloud adoption, this does not mean that the technology is a burden rather an asset. The benefits still outweigh the risks and if you are able to manage the latter, you can derive all the benefits and take your company to the next level.

Unlocking the performance potential with a risk-based approach

The biggest challenge that most companies encounter when it comes to embracing cloud based solutions relates to inadequate understanding of their data. Before embracing the technology, they need to have a risk assessment of the data to be moved, which is all about analyzing how critical it is for the organisation. Additionally, there is also a need to enhance data protection measures for maintaining the integrity, confidentiality, and availability of data sets. This is best done with the implementation of measures such as data encryption, data leakage prevention tools and multi-factor authentication. Apart from these, there are some strategies that they need to have in place. These include:

– Detection of the risks associated with cloud-based deployment

– Evaluation of the risks based on their likelihood and impact

– Identification of robust risk mitigation strategies

– Risk rating integration into cloud adoption planning

Once organisations have these measures in place, they will surely get better on the security front. Still, they must invest in continuous risk evaluation and mitigation. Additionally, it is crucial to follow certain guidelines while on-boarding a cloud service provider. These include:

Clearly understanding and communicating the compliance requirements to the provider

Getting a detailed history about the provider for verifying transparency in the security and policies that are built into their cloud platform

Comprehending the application, data and traffic flow

Finding about the compliance followed by the provider

Outlining the roles and responsibilities of the business and the provider

Role of a GRC Program

When it comes to the adoption of cloud solutions, Governance, Risk and Compliance (GRC) Program plays a crucial role. Essentially, the program empowers businesses in enabling continuous monitoring, enhancing visibility into their risk appetite, and fortifying regulatory compliance, covering them on all three key fronts. With a GRC framework in place, enterprises can understand the risks completely and manage them effectively as well. They get a higher level of operational control, along with the benefits of reliability, transparency and confidence in the cloud service provider.

Wrapping Up

Without any doubt, the benefits of cloud solutions clearly surpass the risks and opting for them is a good decision for every business.

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