Over the years, as the business landscape evolves, the challenges that organizations face in enterprise risk management, vendor management, cybersecurity, and regulatory compliance, among others, have changed.
Whereas these critical business aspects could be managed independently, it is now vital that organizations take a holistic approach as they are now interconnected. This is why close to 70% of executives believe that the present risk management policies and practices within their organizations are not enough for their future needs.
As such, governance, risk, and compliance (GRC) management is taking center stage in the business environment. As a result, the GRC industry is anticipated to experience a Compound Annual Growth Rate (CAGR) of 12.9% up until 2025 when it’s worth will reach $64.62 billion.
What Is GRC?
Governance, risk, and compliance (GRC) refer to the strategy an organization uses to manage enterprise risk, compliance with regulations, and the overall governance of the institution.
With a comprehensive GRC strategy, organizations have a structured method of managing the challenges mentioned above in a holistic way. This ensures that business objectives and IT needs are aligned, thus creating an effective method of complying with requirements and managing risk.
Here’s a breakdown of what the three main components of GRC entail:
› Governance – Ensuring that the necessary administrative support measures are put in place for the GRC strategy and aligned it with the overall business objectives
› Risk management – This involves identifying all risks and opportunities that may result from business operations and addressing them in a manner that will support the objectives of the organization
› Compliance – Ensuring that the company is compliant with all the appropriate laws and regulations. When it comes to data, this means using and securing it as required.
To ensure that GRC efforts are effective and efficient, more and more organizations are relying on GRC software. Such software integrates compliance into daily business activities such as:
› Role management
› User Provisioning
› Risk assessment
› Emergency access assessment
With GRC software, your compliance and routine audit processes will be streamlined, and the risk of malicious activity or fraud in Enterprise Resource Planning (ERP) systems will be significantly reduced.
The software makes monitoring user access and privileges easy. Any time a user performs an action that is beyond their access level or may violate compliance requirements, an alert is sent. Some of the other processes GRC software assists with include risk analysis and maintaining audit logs, among others.
By compiling and storing data such as audit logs, GRC software is an invaluable asset for compliance teams as it can be used to prove no violations have been made.
Choosing The Right GRC Tool For Your Organization
When it comes to GRC solutions, it’s not a one size fits all industry. Many vendors offer a plethora of products to suit organizations with varying needs. This is why choosing GRC software is often a daunting task for organizations.
However, with the right approach, you can get a solution that meets your present and future needs perfectly.
» Get All The Stakeholders Onboard
In essence, governance, risk, and compliance tools integrate various aspects of the business to facilitate compliance while reducing risks. As such, it will cut across various groups and departments such as:
› Audit team
› Disaster recovery
› Corporate compliance
Therefore, for your organization to benefit from such tools, all these departments must be involved in the process. However, the first step should be getting administrative approval and support.
» Determine Your Objectives And Assess Your Needs
The process of choosing the right GRC software begins with outlining organizational objectives. Based on the objectives you outline, you can assess your needs in terms of governance, risk, and compliance.
For a comprehensive assessment of your GRC needs, all the necessary internal stakeholders should be involved. Have each team independently assess their present and long term needs. From there, you can have various department heads collaborate to determine the organization’s collective needs.
» Assess Vendors And GRC Tools
With a clear idea of what you would like from a GRC tool, you can begin your search for vendors. Before you begin contacting vendors, do an online search and vetting process. By going through their website, you can know which industry or type of needs their software addresses.
Have your team repeat the process with multiple vendors. Once you have a list of five potential vendors, you can initiate contact with a request for information (RFI). Provide all the suitable vendors with your needs accompanied by specific cases then request for an on-site demonstration.
Ensure that all the stakeholders are present during the on-site demonstration. Have them develop a system for assessing and ranking GRC tools that will rationalize the selection process.
Some of the critical factors to consider when choosing GRC solutions and vendors include:
Since the aim of deploying the GRC tool is to facilitate compliance and risk assessment in the daily operations of a business, it will be used by your entire team. As such, it should be very user-friendly and easy to integrate with your current systems.
Cybersecurity and data protection is crucial in this digital era. Any vulnerabilities and loss of customer data can expose your organization to liabilities as well as damage its reputation.
Therefore, you should be keen on how a GRC tool can aid your protection against threats. Equally important, it should also factor in internal risk and misuse of information. GRC solutions should enable the organizations to provide individuals only with the permissions and access to data that’s sufficient for them to perform their roles.
As time goes by and as your organization grows, the amount of and complexity of the data you handle increases. This then subjects your organization to additional risk and compliance requirements.
Therefore, as you choose your GRC tool, you should factor in future needs. The tool should also be flexible enough for you to adjust your strategy in case other unforeseeable requirements arise.
When it comes to GRC solutions, functionality and efficiency go hand in hand. The tool you elect to use should have an interface that can be easily integrated with other business tools. This will enable you to get the most from the tools, both independently and collectively.
GRC solutions and strategies should begin with the enterprise in mind. Even similar-sized organizations within the same industry can have completely different needs.
As such, the GRC solution your company uses must address its unique needs. Therefore, you should only choose a tool that offers full customization capabilities.
As you chose a vendor, think in terms of a continuous relationship rather than a one-off interaction. This is because your vendor will play a critical role in ensuring your GRC tool can serve your needs in the future.
Consider the level of support the vendor offers, as it will be crucial when new needs or challenges arise. Vendor support should come in the form of updates, consulting services, and maintenance.
More importantly, select a vendor that offers training if need be. GRC software will not be of any use if your team is unable to exploit its full potential.
Developing a comprehensive GRC strategy involves factoring in and integrating different aspects of organizational processes. Even with the best tool, your vendor should have multiple strategic partnerships. It is through these partnerships that they will be able to help you maintain compliance and mitigate risks.
As compliance regulations tighten, the demand for GRC tools is increasing by the day. As a result, there are many new vendors within the industry. To ensure that the product, service, and support you get are top-notch, only go for vendors who have industry experience.
Also, try and get insight into other clients they have served and the reviews they have. This will give you a clear picture of what to expect.
The primary objective of a company is to generate profit for its shareholders. As such, it is important to factor in the total cost of ownership (TCO) for your GRC solution and then calculates the potential return on investment (ROI).
Though compliance and risk management should not be compromised in any way, you should choose a GRC solution that offers maximum protection and efficiency at a favorable cost to your organization.
Once you have gone through the rigorous process of identifying and assessing various vendors and tools, you can now make the final decision. As with the assessment process, all stakeholders must participate in the final selection, and consensus must be achieved.
Your choice should not necessarily be guided by the ranking system you developed. A vendor may have ranked highest overall, but may not be ideal for a particular need in your organization.
Use the ranking metrics to determine two or three potential vendors then let every stakeholder weigh in. The goal of this process is to ensure that each department is content with the vendor and tool you decide to work with.
Why Your Organization Needs A GRC Solution
Thanks to digitization, organizations can access broader markets and personalized marketing campaigns, which boost sales and accelerates growth. However, companies also face greater risks and challenges such as employee fraud, money laundering, and, worst of all, cybercrime.
Due to the increased amount of data businesses hold today, and recent data breaches, new and strict regulations on data protection are being passed. The best examples include the GDPR and CCPA.
Complying with such regulations and mitigating other risks is demanding. GRC tools help organizations with risk mitigation and compliance while increasing efficiency.