Key Risk Indicators (KRIs) measure the likelihood of future risk events. Like smoke detectors for your organization’s risk landscape, KRIs are incredibly useful for managing network security. 

For example, monitoring the frequency of phishing attempts or the number of patches applied out of schedule gives you a heads-up on emerging threats. 

Therefore, key risk indicators help guide decision-making, allocate resources effectively, and ultimately safeguard your company’s operations.

Difference between KRIs and KPIs

KPIs, or Key Performance Indicators measure long-term performance. They help you understand if you are meeting your future goals. 

For instance, in a call center, KPIs might include metrics like Average Handle Time (AHT), First Contact Resolution (FCR), or Average Wait Time (AWT). These indicators show whether your teams are hitting their targets and delivering top-notch customer service.

On the other hand, KRIs, or Key Risk Indicators, measure outcomes that have already occurred. They're retrospective, letting you look at past events to make better decisions in the present. 

For example, reviewing net or gross profits is a KRI because it aggregates data from the past. Most financial metrics fall into this category. It may surprise you, but many metrics you assume are KPIs are actually KRIs. Metrics like profits as a percentage of revenue or the number of customer complaints last month are KRIs.

The critical difference is that KRIs are trailing indicators. They look back at what has happened. This makes them valuable for understanding your past performance and guiding current decisions. 

In contrast, KPIs are forward-looking. They’re strategic metrics that measure the direct results of strategic decisions at the executive level. While KRIs give you insight into previous events, KPIs help you steer the organization towards achieving its strategic goals.

Incorporating both KRIs and KPIs into your data analysis gives you a fuller picture of your operations. If you only focus on KRIs, you might miss out on important future-oriented insights. 

Conversely, relying solely on KPIs without understanding past performance can also be limiting. By balancing both, you can monitor your progress toward future goals while also learning from past outcomes. This holistic approach ensures you are not just aiming for success but are also learning from your journey along the way.

Role of KRIs in risk management

KRIs are indispensable for risk management. They are your network's guardians, keeping watch and alerting you  to potential threats. KRIs are an early warning system that makes it easier to nip issues in the bud, before they escalate into full-blown crises.

For instance, suppose you notice a spike in failed login attempts across your company's network. This KRI could flag a potential brute-force attack. 

Early detection allows you to bolster your defenses, perhaps by implementing stricter authentication protocols or enhancing your intrusion detection systems. This way you mitigate risks before they compromise your network's integrity.

Another example of a KRI is monitoring the frequency of unpatched vulnerabilities in your systems. If you observe a growing number of these vulnerabilities, it's a sign that your patch management process might be faltering. This KRI enables you to allocate resources more effectively, ensuring that your IT team prioritizes critical patches to shield you from potential exploits.

KRIs also help you manage operational risks. Let's say you experience an unusual volume of data transfers during non-peak hours. This anomaly could indicate unauthorized data exfiltration. By identifying this early on, you can investigate and counteract the threat, protecting sensitive information from falling into the wrong hands.

Furthermore, KRIs like the number of phishing emails reported by employees can offer invaluable insights. A surge in phishing attempts might signal that your workforce needs additional training. Addressing this proactively can fortify your human firewall, reducing the likelihood of successful social engineering attacks.

Therefore, continuously monitoring KRIs ensures you stay informed about your risk landscape. This vigilance allows you to make informed decisions and implement preventive measures, ultimately safeguarding your company's operations.

How to identify KRIs in company networks

Understand your threat landscape

To understand the threats you face, you must look at both internal and external risks. For example, an increase in unauthorized access attempts is a clear internal risk indicator. 

If you see that the number of failed login attempts is rising, it could be a sign that someone is trying to breach your defenses. By catching this early, you can strengthen your authentication protocols and prevent a potential security breach.

External risks are equally important. Consider the frequency of phishing emails reported by employees. If there's a surge in these reports, it’s a red flag. This KRI might indicate that cybercriminals are targeting you and your existing defenses may not be enough. 

Taking proactive steps like enhancing your email filters or conducting additional training sessions can help mitigate this risk.

System performance metrics can also serve as effective KRIs. If your network experiences an unexpected increase in system downtime, it could point to underlying infrastructure problems. 

Early identification through KRIs like server uptime and response times enables you to allocate IT resources more effectively. This way, you can address issues before they affect your overall network performance.

Monitoring the frequency of software patches applied outside of the regular schedule is another valuable KRI. If you see this number rising, it could indicate that your systems are increasingly vulnerable to exploits. This may require you to review your patch management process and ensure more frequent updates to minimize vulnerabilities.

Network traffic anomalies are another crucial KRI. A sudden spike in data transfers during unusual hours might be a sign of data exfiltration. By closely monitoring network traffic patterns, you can quickly detect and investigate these anomalies. This helps you act swiftly to prevent sensitive information from being stolen.

Employee activity can also provide insight. For instance, excessive access to sensitive files by non-authorized personnel could signal potential insider threats. By tracking access patterns and setting alerts for unusual behavior, you can identify and mitigate insider risks early on.

Using these KRIs, you create an early warning system for your network. This proactive approach lets you address potential threats before they escalate, ensuring the ongoing security and reliability of your company's network.

Main categories of network risks and the KRIs to track

Performance and availability

Network performance and availability are crucial for your company's operations. Identifying KRIs in this area helps you stay ahead of potential issues. 

One example is monitoring network latency. If you see a gradual increase in latency, it might be a sign of bandwidth congestion or hardware inefficiencies. Acting on this early allows you to optimize your network resources before it affects your user experience.

Server uptime is another critical metric. You naturally aim to maintain high availability, but unexpected downtime can occur. By tracking server uptime and noting any deviations from the norm, you can identify patterns that might indicate underlying hardware or software issues. 

For instance, if a particular server shows frequent downtime, it could be a sign that it needs an upgrade or more maintenance attention.

Response time is a KRI that tells you how quickly your network responds to user requests. A sudden increase in response time can be a red flag. This might indicate overloaded servers, network congestion, or even potential cyber attacks like DDoS (Distributed Denial of Service). 

Spotting the anomaly early means you can take actions such as load balancing or enhancing your network infrastructure before users start experiencing significant delays.

Monitoring error rates also provides insight into network performance. If error rates spike, it could be due to faulty hardware, misconfigured software, or external factors like cyber attacks. 

For example, an increase in packet loss might signal that your network hardware is struggling or that an external entity is disrupting your traffic. Identifying this KRI early helps you address the root cause and maintain smooth network operations.

Additionally, the frequency of unexpected system reboots can be a telling KRI. If your servers or network devices are rebooting more often than scheduled, it might point to hardware failures, software issues, or even security breaches. 

Keeping an eye on this metric allows you to take preventive measures, such as hardware replacements or software updates, ensuring continuous availability.

Bandwidth utilization is another vital KRI. Unusual spikes in bandwidth usage during off-peak hours could indicate unauthorized data transfers or potential malware activity. By monitoring your bandwidth closely, you can detect and investigate these anomalies, preventing data breaches and ensuring optimal network performance.

Keeping a close watch on these KRIs is crucial for maintaining an efficient network. Early detection through these indicators allows you to proactively manage and mitigate risks, ensuring that your company's operations run smoothly without unexpected disruptions.

Security threats

KRIs can act like your security alarms that let you know when something’s off. One key indicator is the frequency of malware detections. If you see a spike in these detections, it might mean that new or more aggressive malware is targeting us. 

This early signal allows you to ramp up your defenses, maybe by updating your security software or rolling out more comprehensive employee training.

The number of unauthorized access attempts is another critical KRI. For example, a surge in failed login attempts could be an early sign of a brute-force attack trying to crack user passwords. 

Catching this early allows you to tighten your authentication protocols, perhaps by implementing multi-factor authentication or increasing the complexity requirements for passwords.

Phishing attempts reported by your employees also serve as a valuable security KRI. If there’s a sudden increase in these reports, it tells you that cybercriminals are actively trying to exploit your human vulnerabilities. 

This signal must prompt you to enhance your email filtering systems and conduct more frequent phishing awareness training sessions for your staff.

Monitoring the number of unpatched vulnerabilities in your systems is another essential security KRI. An upward trend in these unpatched vulnerabilities could indicate that your patch management process is lagging behind. 

A high number of unpatched vulnerabilities can be a big risk, as they can open doors to cyber attackers. Identifying this issue early allows you to prioritize critical patches and ensure that your systems are as secure as possible.

Additionally, unusual patterns in data access can reveal potential insider threats. For example, if an employee who rarely accesses sensitive data suddenly starts accessing a lot of it, this could be a red flag. You need to investigate these anomalies to ensure there’s no malicious intent behind the activity.

Network traffic anomalies are another key indicator of potential security threats. Imagine you notice a sudden increase in data transfers during unusual hours. This could be a sign of data exfiltration attempts. 

By monitoring your traffic patterns closely, you can quickly detect and respond to potential breaches, keeping your sensitive information safe.

All these early warnings allow you to take proactive measures, ensuring that your company’s network remains secure and resilient against potential attacks.

Compliance and regulatory risks

KRIs can help you stay on the right side of the law and avoid hefty fines. One critical KRI to monitor for compliance and regulatory purposes is the frequency of compliance audits. 

If you see a rise in the number of internal audits conducted outside the regular schedule, it might indicate underlying issues that need addressing. Early action can help you fix these problems before they escalate and attract regulatory scrutiny.

Tracking the number of compliance violations reported is another valuable indicator. Suppose you notice an increase in these reports. 

This could signal that employees are either unaware of compliance protocols or deliberately bypassing them. Identifying this early allows you to strengthen your training programs and enforce stricter compliance measures.

Data protection is another area where KRIs prove invaluable. Monitoring the frequency of data breaches is crucial. If there’s a spike in breaches, it suggests vulnerabilities in your data handling processes. This KRI is an instruction to enhance your data protection strategies, perhaps by implementing stricter access controls or improving your encryption standards.

Another KRI to watch is the timeliness of regulatory filings. If you start missing deadlines for submitting required documents, there could be trouble ahead. 

That KRI may indicate gaps in your compliance management processes. Early detection allows you to streamline your procedures and ensure timely submissions, keeping you in good standing with regulatory bodies.

Also make sure to monitor the number of third-party vendor compliance issues. If you see an increase in problems reported with your vendors, it's a sign that your supply chain might not be as secure as you thought. It is a warning to reassess your vendor agreements and ensure they adhere to your compliance standards.

Don’t forget to track changes in relevant laws and regulations. A sudden influx of legal updates might pose a risk if you don’t adapt quickly. This KRI alerts you to the need for policy updates, ensuring you remain compliant with evolving regulations.

Lastly, the frequency of employee training sessions on compliance topics serves as a useful KRI. If training becomes less frequent, it could indicate that your workforce isn't up to date on the latest compliance requirements. Keeping an eye on this metric ensures that you prioritize ongoing education and awareness programs.

Operational risks

These are risks that can disrupt your daily activities and impact your efficiency. Monitoring KRIs in this area is crucial. 

One key operational risk indicator is system downtime. If you notice an increase in downtime, it could point to underlying issues with your infrastructure. 

For example, frequent server crashes may indicate hardware failures that need immediate attention. You must address these issues early to maintain smoother operations.

Another significant KRI is the rate of process errors. A surge in data entry mistakes could suggest insufficient training or a need for better data validation systems. Early detection allows you to rectify these issues before they lead to larger operational bottlenecks. 

For instance, implementing automated data validation can reduce errors, ensuring more efficient and accurate workflows.

Employee turnover is another operational risk indicator you must frequently track. A sudden rise in turnover rates might indicate deeper organizational issues like low morale or inadequate support. 

By recognizing this early, you can take steps to improve employee satisfaction, perhaps through enhanced engagement programs or better benefits. Addressing these underlying issues can help retain talent and maintain operational stability.

Supply chain disruptions are another area where KRIs play a vital role. If you observe delays in the delivery of critical components, it might signal vulnerabilities in your supply chain. 

Early identification allows you to explore alternative suppliers or increase your inventory buffer, ensuring minimal disruption to your operations. For example, if a key supplier consistently misses delivery targets, you can proactively seek other reliable vendors to mitigate this risk.

Monitoring the frequency of equipment maintenance requests also provides valuable insights. If maintenance requests are on the rise, it could be a sign that your equipment is aging or being used beyond its capacity. 

Acting on this KRI enables you to schedule timely maintenance or upgrades, preventing potential breakdowns that could halt operations.

Additionally, tracking compliance with operational procedures is essential. For example, deviations from standard operating procedures (SOPs) are a red flag. 

It could mean that employees are not following best practices, possibly due to lack of training or unclear guidelines. Early detection helps you reinforce SOP adherence through additional training or clearer documentation.

Inventory levels also serve as a KRI for operational risks. If inventory discrepancies become frequent, it might indicate issues with inventory management systems or even potential theft. Monitoring this KRI allows you to tighten inventory controls and improve your tracking mechanisms, ensuring operational efficiency and reducing losses.

How to develop effective KRIs

Ensure your KRIs are measurable and actionable 

After you identify the KRIs that accurately categorize the vulnerabilities your network faces, which we discussed earlier, you must ensure there is a way to measure their severity and remediate them. Effective KRIs should lead to clear, actionable steps that help you mitigate risks early on.

For instance, tracking the frequency of unauthorized access attempts is a very specific and measurable KRI. If you notice a sudden increase, it prompts immediate action, such as tightening your authentication protocols or conducting a security review. 

Set thresholds for each KRI

These thresholds act like trigger points, alerting you when the metrics indicate potential risks. For example, you might decide that more than ten failed login attempts within an hour should trigger a security investigation. 

Setting these thresholds ensures that your KRIs provide timely warnings and allow you to act before issues escalate. It also allows you to focus your remediation efforts and network resources where the need is most urgent.

Regularly review and update your KRIs

Threat landscapes change, and your indicators need to evolve accordingly. Suppose you initially set a KRI to monitor server uptime. 

If your network infrastructure evolves, newer technologies might require different metrics for uptime. Regular reviews help you keep your KRIs relevant and aligned with your current risk environment.

Involve various stakeholders in developing KRIs

Collaboration ensures you capture a comprehensive view of potential risks. For instance, the IT team can provide insights into technical risks like malware, while the compliance team can highlight regulatory concerns. By incorporating diverse perspectives, you create more robust and effective KRIs.

Leverage historical data to fine-tune your KRIs

Looking back at past incidents can reveal patterns and inform better threshold settings. For example, if you had a data breach last year due to unpatched vulnerabilities, analyzing the timeline and circumstances can help you set more effective KRIs around patch management processes.

Use automated tools to enhance the effectiveness of your KRIs. 

For instance, network monitoring software can automatically track and alert you to unusual patterns, like a spike in data transfers during non-peak hours. Automation ensures that you consistently monitor KRIs without missing critical alerts due to human error.

Communicate the importance of KRIs across the organization. 

Everyone, from top executives to front-line employees, should understand how their actions can influence these KRIs. For instance, regular training sessions on recognizing phishing emails can empower employees to report incidents, providing you with valuable data to monitor and act on.

Following these steps ensures you develop KRIs that not only provide early warnings but also guide effective risk mitigation strategies, ensuring your company's network remains secure and resilient.