User:JIALING SHI/sandbox

= System risk = In today’s digital age, many businesses have replaced labor with electronic technology. Technology has become very important, but there are more examples of business failures due to technical mistakes. Now, many companies use specific techniques to manage the entire company system, including employees, design, production and so on. However, if the technology cannot be updated in time, it will differ with the current business development, and it also will increase the possibility of new risks. In general, system risksinclude system availability, system size, data integrity, unauthorized data usage, and the ability to recover systems in an unexpected situation.

Another example of system risk is to use the inaccurate financial model, which can cause unpredictable losses. Some Institutions that specialize in helping companies assess business and investment opportunities may use unsuitable models or data, so sometimes they may neglect many potential risks. Misuse of the financial model may be a wrong strategic decision because it underestimates the economic value added (EVA) of the costs of risk; it may also be a wrong investment decision because the price assumptions of complex derivatives are inaccurate. Many companies to be reported by economic news because of the inaccuracy of the financial model.

Besides, the risk of procedural errors and lack of planning are also important. An algorithmic small mistake can quickly spread through some models and networks and can cause massive damage before the mistake is discovered. At the beginning of the 21st century, huge expenses were incurred because of the remedy for Y2K. This is an excellent example of how much damage a small one would bring. Finally, system failure is also a significant risk for the company because it is likely to cause the entire production line to stop.

Security has also gradually become another key risk, especially with the proliferation of e-commerce. In the early 2000s, cyber hackers successfully got hundreds of thousands of users’ credit card information from an Internet music retailer, because retailers simply stored unencrypted credit card information on a web server. It gave the hacker an opportunity to download the user’s personal information by the weaknesses of the software.

Similar events happen almost every day, so requiring companies that use a lot of electronics to pay more attention to data security because data associates with the entire business process and system. While hackers can think of ways to solve protection software, there are many ways to reduce the number of times that the company becomes a target.