Interscale Content Hub – A well-structured IT risk assessment matrix helps you make smart decisions about risk mitigation and resource allocation.
The IT risk assessment matrix lets you categorise risks based on how bad they are and how often they happen.
This makes it easier to manage risks and keep your cybersecurity and operational resilience strong.
This kind of matrix lets your organisation decide what to do first. So, let’s get to grips with the matrix now.
What is the Risk Matrix in Information Technology?
The risk matrix in IT is a handy tool that helps organisations assess and prioritise risks by plotting them on a grid based on how likely they are to happen and how much they could impact the business.
This method makes the risk assessment process easier by showing stakeholders how severe and likely each risk is.
The matrix usually ranges from a 3×3 to a 5×5 grid, with each cell representing a specific combination of likelihood and impact.
Likelihood is basically how likely it is that a risk event will actually happen. This is usually rated on a scale from “rare” to “almost certain.”
The impact is what would happen if the risk actually happened. This is often assessed in terms of money lost, how much it would cost to keep the business running, how it would look to customers and the government if something went wrong, and any fines or penalties.
Each risk is plotted on the matrix based on its likelihood and impact scores, which shows us the overall risk profile.
In the IT context, using a risk matrix helps us spot weaknesses like cyber threats, hardware failures, and compliance issues.
For example, in 2022, KPMG said in “Australia’s Top Risks FY2022-23” that cybersecurity is one of Australia’s top risks. This shows how important it is to have strong risk management practices in IT.
For details on the framework, please refer to “Why 5 IT Risk Assessment Framework Matters: Tips and Update Insights.”
Components of an IT Risk Assessment Matrix
Likelihood
This axis shows how likely it is that a risk event will happen. It usually goes from “rare” to “almost certain”.
So, for instance, in a 5×5 risk matrix, you might have categories like ‘Improbable’, ‘Remote’, ‘Occasional’, ‘Probable’ and ‘Frequent’, with each one given a number from 1 to 5.
Impact
This axis looks at how serious the risk is, from “insignificant” to “catastrophic”.
The severity ratings are also given a numerical value. For instance, an impact could be rated as ‘negligible’, ‘marginal’, ‘moderate’, ‘critical’ or ‘catastrophic’.
Risk Score
The risk score is calculated by multiplying the likelihood by the impact, which helps us to prioritise risks.
So, if a risk is likely to happen (probable) and it’ll have a moderate impact, it’ll have a risk score of 12, which puts it in the medium-high risk category.
Risk Categories
These could be anything from operational, compliance, strategic, and financial risks. Each one has its own set of characteristics that are relevant to IT environments.
Categorising risks helps us to come up with targeted mitigation strategies to deal with them.
Mitigation Measures
These are the strategies and actions we take to reduce the likelihood or impact of the risks we’ve identified.
Having effective mitigation measures in place is key to reducing the overall risk profile of the organisation.
How to Create an IT Risk Assessment Matrix
Start by thinking about any potential risks that could affect your IT environment.
Some common risks are cybersecurity threats, software vulnerabilities, hardware malfunctions and compliance issues.
This is the most important part because it sets the stage for a solid risk management plan.
Then, for each risk you’ve identified, work out how likely it is and how much of an impact it could have.
Use a scale from 1 to 5, where 1 is low likelihood/impact and 5 is high likelihood/impact. This method helps you to quantify risks in a structured way.
So, for example, a cybersecurity breach might be rated as ‘likely’ (4) for likelihood and ‘major’ (4) for impact, which would give us a composite risk score of 16, which falls into the high-risk category.
Next, multiply the likelihood by the impact to get a risk score. This score helps us to rank the risks based on how severe they are.
A higher score means it’s more urgent to put a plan in place to deal with it.
So, if a hardware failure is “Possible” (3) and its impact is “Moderate” (3), the risk score would be 9, which is medium risk.
Next, put each risk in the right cell on the matrix based on how likely it is and how much it would affect us if it did happen.
This makes it easy for stakeholders to understand how serious each risk is and what needs to be done about it.
A 5×5 matrix is a good way to balance detail and usability because it gives you a comprehensive view without being overly complex.
For the most important risks, come up with ways to reduce their likelihood or impact.
This could mean beefing up cybersecurity, upgrading hardware, or making sure everything is in line with the rules.
Keep in mind that effective mitigation requires ongoing evaluation and adaptation to address emerging threats and vulnerabilities.
You might find it helpful to read “Ditch Fear, Embrace Facts: IT Risk Assessments Services to the Truth.”
Example of an IT Risk Assessment Matrix
Consider a simple example using a 5×5 risk matrix:
| Likelihood\Impact | Insignificant (1) | Minor (2) | Moderate (3) | Major (4) | Catastrophic (5) |
| Rare (1) | 1 | 2 | 3 | 4 | 5 |
| Unlikely (2) | 2 | 4 | 6 | 8 | 10 |
| Possible (3) | 3 | 6 | 9 | 12 | 15 |
| Likely (4) | 4 | 8 | 12 | 16 | 20 |
| Almost Certain (5) | 5 | 10 | 15 | 20 | 25 |
For instance, a risk with a likelihood of 4 (Likely) and an impact of 3 (Moderate) would have a risk score of 12 (4 x 3), placing it in the medium-high risk category.
This categorization helps prioritise the risk for timely mitigation measures, such as deploying additional security protocols or performing regular system audits.
If you want a high-quality, customisable visual representation, you can create a matrix using Excel or any graphic design tool that supports grid layouts.
You can also compare this matrix with other matrix templates from lots of different online sources. One good resource is on Someka in “Risk Assessment Excel Template.”
How Interscale Can Be Your Risk Assessment Support System
Dealing with all the different risk assessment matrix formulas can be pretty overwhelming.
Our team of cybersecurity experts can provide you with a solution designed to meet your specific needs.
We can help you with all aspects of risk management, from creating a comprehensive plan to putting together the right matrix and implementing effective security controls.
This means we’re in it for the long haul and we’re here to help make sure your IT risk management programme stays on point as your business grows.
Our track record speaks for itself, including our successful collaboration with Davey Water Products.
We’d love for you to take a closer look at how we can help your organisation with its risk management journey.
Take a look at our Interscale Cybersecurity Support page to find out more about our all-encompassing approach and the value we can bring to the table.
And don’t be shy – get in touch and book a consultation. We’re here for you 24/7, ready to chat about your specific needs and give you the expert guidance you need.
In Closing
The matrix-structured approach helps you make smart decisions, use resources wisely, and avoid problems before they get out of hand.
The Interscale team can also help you set up and keep up a solid risk assessment framework, so your company can stay strong against potential IT threats.
Because, without the experts to back you up, your IT risk assessment matrix is just a useless piece of paper.
