Risk assessment is the process of identifying, analyzing and evaluating potential risks to an organization's assets and infrastructure, including information and technology systems. This process is essential for developing an effective risk management plan.

What is risk assessment?

Risk assessment is a structured process that helps organizations identify potential threats to their operations. It involves pinpointing critical assets (like data, systems, or infrastructure), analyzing possible risks (such as cyberattacks, outages, or data loss), and evaluating the likelihood and impact of each scenario. The goal is to understand what could disrupt the business and how to prevent or mitigate such disruptions effectively.

How risk assessment appears in practice

Examples of common situations:

• Discovering that a critical server lacks backups and a failure would halt operations for days.
• Identifying weak password practices among staff, making the company vulnerable to attacks.
• Evaluating the risk of customer data loss and estimating the financial and reputational consequences.
• Realizing a third-party vendor doesn’t follow proper security standards, creating external risk.
• Running a phishing simulationRunning a phishing simulation that reveals susceptibility to social engineering.

These examples show that risks are not theoretical—they have real and measurable impacts on operations, finances, compliance, and trust. Regular risk assessments help companies stay ahead of potential failures.

Risk assessment vs. related terms?

• Risk assessment vs. risk analysis – Analysis identifies what could go wrong; assessment prioritizes those findings and recommends actions.
• Risk assessment vs. risk management – Assessment is one step; risk management includes implementing controls and ongoing monitoring.
• Risk assessment vs. security audit – Audits review the current state, while risk assessments forecast future problems.

Understanding these distinctions is critical. Many organizations confuse audits with risk assessments, missing the opportunity to anticipate and address emerging threats.

How to implement or evaluate risk assessment in your company

Recommended steps:

1. Identify key assets – Systems, data, processes critical to your operation.
2. Map threats and vulnerabilities – What could compromise those assets.
3. Evaluate risks – Using a matrix to weigh impact vs. likelihood.
4. Rank and prioritize – Address the most severe or likely risks first.
5. Plan mitigation – Implement technical and organizational controls.
6. Document and update regularly – Maintain records and revise assessments over time.

Risk assessment is not just a compliance requirement—it’s a vital part of responsible business management. Organizations often overlook common but high-impact threats, such as human error, outdated systems, or missing backups. Proper risk assessment is the first and most critical step in building operational resilience and cybersecurity readiness.