Management Information Systems:

Managing the Digital Firm

Chapter 8
Securing Information Systems

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 Learning Objectives
8.1 Why are information systems vulnerable to destruction,
error, and abuse?
8.2 What is the business value of security and control?
8.3 What are the components of an organizational
framework for security and control?
8.4 What are the most important tools and technologies for
safeguarding information resources?
8.5 How will M I S help my career?
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 Video Cases
• Case 1: Stuxnet and Cyberwarfare
• Case 2: Cyberespionage: The Chinese Threat
• Instructional Video 1: Sony PlayStation Hacked; Data
Stolen from 77 Million Users
• Instructional Video 2: Meet the Hackers: Anonymous
Statement on Hacking Sony

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 Cyberattacks in the Asia-Pacific (1 of 2)
• Problem
– Information technology is pervasive
– Social engineering attacks
• Solutions
– Educate customers about security practices
– Manage data breaches proactively

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 Cyberattacks in the Asia-Pacific (1 of 2)
• Robust business processes need to be created and
monitored
• Demonstrates vulnerabilities in information technology
systems
• Illustrates some of the reasons organizations need to pay
special attention to information system security

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 Why Systems are Vulnerable (1 of 2)
• Security
– Policies, procedures, and technical measures used to
prevent unauthorized access, alteration, theft, or
physical damage to information systems
• Controls
– Methods, policies, and organizational procedures that
ensure safety of organization’s assets; accuracy and
reliability of its accounting records; and operational
adherence to management standards
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 Why Systems are Vulnerable (2 of 2)
• Accessibility of networks
• Hardware problems (breakdowns, configuration errors,
damage from improper use or crime)
• Software problems (programming errors, installation
errors, unauthorized changes)
• Disasters
• Use of networks/computers outside of firm’s control
• Loss and theft of portable devices
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 Figure 8.1 Contemporary Security
Challenges and Vulnerabilities

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 Internet Vulnerabilities
• Network open to anyone; size means abuses can have
wide impact
• Corporate networks linked to Internet more vulnerable
• E-mail, IM, and P2P increase vulnerability
– Email: attachments with malicious software; can be
used to transmit trade secrets, confidential data
– IM: back door into a secure network
– P2P: can transmit malicious software, expose
corporate data

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 Wireless Security Challenges
• Bluetooth and Wi-Fi networks susceptible to hacking
– Radio frequency bands easy to scan
– SSI Ds (service set identifiers)
 Identify access points, broadcast multiple times, can be
identified by sniffer programs
• War driving
– Eavesdroppers drive by buildings and try to detect SSI D and gain
access to network and resources
– Once access point is breached, intruder can gain access to
networked drives and files
• Rogue access points

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 Figure 8.2 Wi-Fi Security Challenges

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 Malicious Software: Viruses, Worms,
Trojan Horses, and Spyware (1 of 2)
• Malware (malicious software)
• Viruses
• Worms
• Worms and viruses spread by
– Downloads and drive-by downloads
– E-mail, I M attachments
• Mobile device malware
• Social network malware
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 Malicious Software: Viruses, Worms,
Trojan Horses, and Spyware (2 of 2)
• Trojan horse
• SQ L injection attacks
• Ransomware
• Spyware
– Key loggers
– Other types
 Reset browser home page
 Redirect search requests
 Slow computer performance by taking up memory
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 Hackers and Computer Crime (1 of 4)
• Hackers v s. crackers
• Activities include:
– System intrusion
– System damage
– Cybervandalism
 Intentional disruption, defacement, destruction of
website or corporate information system
• Spoofing and sniffing

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 Hackers and Computer Crime (2 of 4)
• Denial-of-service attacks (Do S)
• Distributed denial-of-service attacks (DDo S)
• Botnets
• Spam

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 Hackers and Computer Crime (3 of 4)
• Computer crime defined by U.S. Department of Justice as
any violations of criminal law that involve a knowledge of
computer technology for their perpetration, investigation, or
prosecution.
• Computer may be target of crime
• Computer may be instrument of crime

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 Hackers and Computer Crime (4 of 4)
• Identity theft
– Phishing
– Evil twins
– Pharming
• Click fraud
• Cyberterrorism
• Cyberwarfare

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 Internal Threats: Employees
• Security threats often originate inside an organization
• Inside knowledge
• Sloppy security procedures
– User lack of knowledge
• Social engineering
• Both end users and information systems specialists are
sources of risk

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 Interactive Session: Technology: Capital
One: A Big Bank Heist from the Cloud
• Class discussion
– What management, organization, and technology factors were
responsible for the Capitol One hack?
– Was this an insider hack? Explain your answer.
– What steps could have been taken to prevent the Capital One
hack?
– Should companies handling sensitive data use cloud computing
services? Explain your answer.

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 Software Vulnerability
• Commercial software contains flaws that create security
vulnerabilities
– Bugs (program code defects)
– Zero defects cannot be achieved
– Flaws can open networks to intruders
• Zero-day vulnerabilities
• Patches and patch management: repair software flaws
• Vulnerabilities in microprocessor design: Spectre,
Meltdown
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 What is the Business Value of
Security and Control?
• Failed computer systems can lead to significant or total loss of
business function
• Firms now are more vulnerable than ever
– Confidential personal and financial data
– Trade secrets, new products, strategies
• A security breach may cut into a firm’s market value almost
immediately
• Inadequate security and controls also bring forth issues of
liability
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 Legal and Regulatory Requirements
for Electronic Records Management
• HIPA A
– Medical security and privacy rules and procedures
• Gramm-Leach-Bliley Act
– Requires financial institutions to ensure the security and
confidentiality of customer data
• Sarbanes-Oxley Act
– Imposes responsibility on companies and their management
to safeguard the accuracy and integrity of financial
information that is used internally and released externally
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 Electronic Evidence and Computer
Forensics
• Electronic evidence
– Evidence for white collar crimes often in digital form
– Proper control of data can save time and money when
responding to legal discovery request
• Computer forensics
– Scientific collection, examination, authentication,
preservation, and analysis of data from computer storage
media for use as evidence in court of law
– Recovery of ambient data
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 Information Systems Controls
• May be automated or manual
• General controls
– Govern design, security, and use of computer programs and
security of data files in general throughout organization
– Software controls, hardware controls, computer operations
controls, data security controls, system development
controls, administrative controls,
• Application controls
– Controls unique to each computerized application
– Input controls, processing controls, output controls
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 Risk Assessment
• Determines level of risk to firm if specific activity or process
is not properly controlled
– Types of threat
– Probability of occurrence during year
– Potential losses, value of threat
– Expected annual loss

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 Table 8.5 Online Order Processing
Risk Assessment
Exposure Probability of Loss Range Expected Annual
Occurrence (Average) ($) Loss ($)
Power failure 30% $5,000 − $200,000 $30,750
($102,500)
Embezzlement 5% $1,000 − $50,000 $1,275
($25,500)
User error 98% $200 − $40,000 $19,698
($20,100)

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 Security Policy
• Ranks information risks, identifies security goals and
mechanisms for achieving these goals
• Drives other policies
• Acceptable use policy (AU P)
– Defines acceptable uses of firm’s information resources
and computing equipment
• Identity management
– Identifying valid users
– Controlling access

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 Figure 8.3 Access Rules for a Personnel
System

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 Disaster Recovery Planning and
Business Continuity Planning
• Disaster recovery planning
– Devises plans for restoration of disrupted services
• Business continuity planning
– Focuses on restoring business operations after disaster
• Both types of plans needed to identify firm’s most critical
systems
– Business impact analysis to determine impact of an outage
– Management must determine which systems restored first
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 The Role of Auditing
• Information systems audit
– Examines firm’s overall security environment as well as
controls governing individual information systems
• Security audits
– Review technologies, procedures, documentation,
training, and personnel
– May even simulate disaster to test responses
• List and rank control weaknesses and the probability of
occurrence
• Assess financial and organizational impact of each threat
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 Figure 8.4 Sample Auditor’s List of
Control Weaknesses

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 Tools and Technologies for Safeguarding
Information Systems (1 of 3)
• Identity management software
– Automates keeping track of all users and privileges
– Authenticates users, protecting identities, controlling access
• Authentication
– Password systems
– Tokens
– Smart cards
– Biometric authentication
– Two-factor authentication
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 Tools and Technologies for
Safeguarding Information Systems
(2 of 3)
• Firewall
– Combination of hardware and software that prevents
unauthorized users from accessing private networks
– Packet filtering
– Stateful inspection
– Network address translation (NA T)
– Application proxy filtering
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 Figure 8.5 A Corporate Firewall

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 Tools and Technologies for
Safeguarding Information Systems
(3 of 3)
• Intrusion detection system
– Monitors hot spots on corporate networks to detect and
deter intruders
• Antimalware and antispyware software
– Checks computers for presence of malware and can often
eliminate it as well
– Requires continual updating
• Unified threat management (UT M) systems
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 Securing Wireless Networks
• W E P security
– Static encryption keys are relatively easy to crack
– Improved if used in conjunction with VP N
• W PA 2 specification
– Replaces W E P with stronger standards
– Continually changing, longer encryption keys
• W PA3 is most recent specification, with even stronger
encryption
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 Encryption and Public Key
Infrastructure (1 of 3)
• Encryption
– Transforming text or data into cipher text that cannot be
read by unintended recipients
– Two methods for encryption on networks
 Secure Sockets Layer (SS L) and successor
Transport Layer Security (TL S)
 Secure Hypertext Transfer Protocol (S-HTT P)

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 Encryption and Public Key
Infrastructure (2 of 3)
• Two methods of encryption of messages
– Symmetric key encryption
 Sender and receiver use single, shared key
– Public key encryption
 Uses two, mathematically related keys: public key
and private key
 Sender encrypts message with recipient’s public key
 Recipient decrypts with private key
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 Figure 8.6 Public Key Encryption

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 Encryption and Public Key
Infrastructure (3 of 3)
• Digital certificate
– Data file used to establish the identity of users and electronic assets for
protection of online transactions
– Uses a trusted third party, certification authority (C A), to validate a user's
identity
– C A verifies user’s identity, stores information in C A server, which
generates encrypted digital certificate containing owner I D information
and copy of owner’s public key
• Public key infrastructure (PK I)
– Use of public key cryptography working with certificate authority
– Widely used in e-commerce
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 Securing Transactions with
Blockchain
• Secure transaction database
• Encryption used to verify users and transactions
• Decentralized
• Records cannot be changed
• Blockchain has some vulnerabilities requiring attention to
security and controls

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 Figure 8.7 Digital Certificates

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 Ensuring System Availability
• Online transaction processing requires 100% availability
• Fault-tolerant computer systems
– Contain redundant hardware, software, and power
supply components that create an environment that
provides continuous, uninterrupted service
• Security outsourcing
– Managed security service providers (M SSP s)

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 Achieving Digital Resiliency
• Deals with how to maintain and increase resilience of
organization and its business processes
• Calls attention to managerial and organizational issues in
addition to IT infrastructure
• Single weak link can cause an outage if resiliency has not
been explicitly designed in, measured, and tested

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 Interactive Session: Management:
PayPal Ups Its Digital Resiliency
• Class discussion
– Why is digital resiliency so important for a company
such as PayPal?
– How did PayPal benefit from measuring its digital
resiliency? What issues did it address?
– What is the role of management and organizational
issues in making an organization’s IT infrastructure
more resilient?
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 Security Issues for Cloud Computing
and the Mobile Digital Platform (1 of 2)
• Security in the cloud
– Responsibility for security resides with company owning the
data
– Firms must ensure providers provide adequate protection:
 Where data are stored
 Meeting corporate requirements, legal privacy laws
 Segregation of data from other clients
 Audits and security certifications
– Service level agreements (SLA s)
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 Security Issues for Cloud Computing
and the Mobile Digital Platform (2 of 2)
• Securing mobile platforms
– Security policies should include and cover any special requirements for
mobile devices
 Guidelines for use of platforms and applications
– Mobile device management tools
 Authorization
 Inventory records
 Control updates
 Lock down/erase lost devices
 Encryption
– Software for segregating corporate data on devices

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 Ensuring Software Quality
• Software metrics: Objective assessments of system in form of
quantified measurements
– Number of transactions
– Online response time
– Payroll checks printed per hour
– Known bugs per hundred lines of code
• Early and regular testing
• Walkthrough: Review of specification or design document by
small group of qualified people
• Debugging: Process by which errors are eliminated
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 How Will M I S Help My Career?
• The Company: No. 1 Value Supermarkets
• Position Description: Identity access and management
support specialist, entry-level
• Job Requirements
• Interview Questions
• Author Tips

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