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Black Swans and Tough Trade-offs For Privilege Identity Management

Posted February 10, 2011    Peter McCalister

Recently we talked about the difficult trade-off between security and productivity in regard to designing effective password policies.  Managing these difficult exchanges is a major challenge for many IT decision makers. Security is time consuming and complicated, which almost always means extra work for someone. So IT must decide: is reduced security risk worth the extra work?

In analyzing these trade-offs, it’s generally easy to measure the impact reduced security will have on productivity. It’s much harder to assess the risks (and benefits of lowering those risks) at different levels of security. The textbook answer is to look at the impact of different security threats, and then asses the probability of them occurring. Unfortunately, we are generally bad at assessing high-impact, hard to predict, and rare events, also known as Black Swans (not to be confused with the movie of the same name). As much as we analyze past events that make the press, like the breach at Mozilla and Wikileaks, there are very real and well-documented psychological biases that make people underestimate these events.

Those biases (for example- my company isn’t at risk for a security breach) then distort the results of our trade-off analyses for privilege identity management and whether or not to implement least privilege. IT organizations fall back on gut feelings, rules of thumb, past practices and most often just follow the rules and regulations so they remain in compliance. That’s a good thing to do, though hardly optimal,and raises a bigger question for IT: Does Compliance = Security?  More on that next week.

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