Information Systems for Business

Securing Information
Systems
Agenda

• Vulnerability of information systems to destruction,

error and abuse.
• Business value of security and control
• Components of an organizational framework for
security and control.
• Important tools and technologies for safeguarding
information resources

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Contemporary Security Challenges and
Vulnerabilities

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Internet Vulnerabilities
• Network open to anyone; Size of Internet means abuses
can have wide impact
• Corporate networks linked to Internet more vulnerable
• Use of fixed Internet addresses with cable / D S L
modems creates fixed targets for hackers
• 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
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
 Wireless Security Challenges
• Bluetooth and Wi-Fi networks susceptible to
hacking
• Radio frequency bands easy to scan
• S S I 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
SSID and gain access to network and resources
• Once access point is breached, intruder can gain
access to networked drives and files
• Rogue access points
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Malicious Software: Viruses, Worms, Trojan
Horses, and Spyware (2 of 2)
• Trojan horse
• S Q L injection attacks
• Ransomware
• Spyware
• Key loggers
• Other types
• Reset browser home page
• Redirect search requests
• Slow computer performance by taking up memory
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Hackers and Computer Crime (2 of 4)
•Denial-of-service attacks (D o S)
•Distributed denial-of-service attacks (D Do S)
•Botnets
•Spam

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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 crime
• Computer may be target of crime
• Computer may be instrument of crime

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Hackers and Computer Crime (4 of 4)
• Identity theft
• Phishing
• Evil twins
• Pharming
• Click fraud
• Cyberterrorism
• Cyberwarfare

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Legal and Regulatory Requirements for
Electronic Records Management
• H IP A A
• Medical security and privacy rules and procedures
• Providers, payers and medical records
• 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

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
 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
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Online Order Processing Risk Assessment

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Security Policy
• Ranks information risks, identifies security goals and
mechanisms for achieving these goals
• Drives other policies
• Acceptable use policy (A U P)
• Defines acceptable uses of firm’s information
resources and computing equipment
• Identity management
• Identifying valid users
• Controlling access
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Access Rules for a Personnel System

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Disaster Recovery Planning and Business
Continuity Planning
• Disaster recovery planning
• Devises plans for restoration of disrupted services
• Focuses on technical issues involved in keeping systems up and
running
• Files to back up
• Maintenance of backup computer systems
• 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 should be restored first
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Sample Auditor’s List of Control Weaknesses

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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 (N A T)
• Application proxy filtering

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
A Corporate Firewall

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Tools and Technologies for Safeguarding
Information Systems (3 of 3)
• Intrusion detection system
• Monitors hot spots on corporate networks to detect
and deter intruders
• Antivirus and antispyware software
• Checks computers for presence of malware and can
often eliminate it as well
• Requires continual updating
• Unified threat management (U T M) systems
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Securing Wireless Networks
• W E P security
• Static encryption keys are relatively easy to crack
• Improved if used in conjunction with V P N
• WPA 2 specification
• Replaces W E P with stronger standards
• Continually changing, longer encryption keys
• W P A3 is most recent specification, with even stronger
encryption

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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 (S SL) and successor
Transport Layer Security (T L S)
• Secure Hypertext Transfer Protocol (S-H T TP)

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Public Key Encryption

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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 (P K I)
• Use of public key cryptography working with certificate
authority
• Widely used in e-commerce th
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16 Edition, Pearson, 2020
Digital Certificates

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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
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 S SP s)

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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
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 (S L A s)
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
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
Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Case: PayPal Ups Its Digital Resiliency, pp.
324-325
Points for Discussion
1. Why is digital resiliency so important for a company such as
PayPal?
2. How did PayPal benefit from measuring its digital
resiliency? What issues did it address?
3. What is the role of management and organizational issues
in making an organization’s IT infrastructure more resilient?

Source: Kenneth C. Laudon & Jane P. Laudon, Management Information Systems, 16th Edition, Pearson, 2020
Thanks