Digital transformation is forcing rapid change in governance, risk, and compliance (GRC) in virtually all industries and sectors, especially those with high risk potential and unique compliance requirements such as health care, the energy sector, and food services. All of these changes are pushing companies to quickly adopt GRC platforms that can help address complex and evolving regulatory compliance requirements. You may be familiar with GRC, but how familiar are you with GRC platforms? What is GRC, what is a GRC platform, and how do you select the right one? Here’s everything you need to know.
What Is GRC?
Using a structured approach, governance, risk, and compliance enable an organization to achieve its objectives by integrating the capabilities that provide governance, management, and assurance of risk, performance, and compliance activities. A well-planned GRC strategy aims to remove governance, assurance, and business management attribute-related silos. GRC software is designed to help companies effectively manage risk, meet regulatory compliance requirements, and achieve organizational goals — through the three components of GRC.
Governance initiatives involve ensuring policies, controls, resources, leadership guidance, and processes all align operational activities with company-wide business goals — and that they are in all stakeholders’ best interests.
Risk assessment and risk management activities analyze, identify, and manage vulnerabilities within an organization — including financial, technical, legal, human resource, and strategic risks. This includes putting resources in place to minimize, monitor, and control the impact of any detected threats or vulnerabilities relating to people, business processes, or information technology.
Regulatory compliance software and programs ensure that business activities are conducted in accordance with legal, ethical, and regulatory guidelines — especially as these relate to IT systems where, in particular, data must be gathered, stored, and transmitted securely.
Why Is GRC Important?
Using an integrated risk management approach, a GRC framework can help your company quickly identify and reduce risks, improve internal controls, and improve compliance. This also has the chain effect of helping to minimize business silos, duplication of work, wasted resources, and business disruption. Other business key benefits can include:
A higher degree of personnel awareness and trust in company vision, leadership, and across your entire organization, and increased consistency and stability — ultimately, this can make individual teams and the company overall more effective and more committed.
Removing non-value adding activities reduces time and expenditure that can be better used elsewhere. The increased optimization replaces manual activities with automated ones to improve efficiency and optimize the use of resources.
By removing waste and less valuable activities while increasing consistency, stability, trust, and overall visibility, increased agility becomes possible throughout your entire company thus enabling better responsiveness in the marketplace.
Who Employs GRC?
In short, any private or publicly-traded company interested in ensuring that their policies and processes align with overall company objectives can employ GRC. Regardless of the company size or industry, adopting a GRC framework can help any company better manage risks and ensure that the various levels of regulatory compliance requirements are met.
What Is Key to a Successful GRC Implementation?
A successful GRC implementation involves using integrated solutions to plan, execute, monitor, and control governance, risk management, and compliance strategy. It also requires aligning activities with global standards. Key elements for success include:
- Methodically preparing the environment.
- Carefully and accurately identifying and assessing risks you will manage in the platform.
- Analyzing, tracking, and monitoring data and other factors that might impact the GRC framework, reporting, and GRC capabilities.
Ensuring a compliant GRC framework requires the full support and participation of your company’s leadership team and all personnel. Talking with other professionals who have had previous success stories with GRC solutions can help ensure your program is well supported and provide ideas about what to take advantage of or heads up on what to avoid.
GRC Technology Evolution
Not all GRC solutions are alike. Technology options for audit, risk, and compliance professionals have come a long way since Microsoft Word and Excel were introduced in the early 1980s — though many audit, risk and compliance teams are still in a manual environment of spreadsheets, Word documents, and email.
The first generation of GRC solutions were introduced in the mid-1990s, but were cumbersome to use as well as costly to purchase and implement because every element, screen, and workflow needed to be configured.
2nd generation GRC bolt-on products followed a decade later, added as an afterthought for the audit, risk, and compliance market by massive enterprise resource planning (ERP) software companies.
As cloud technology matured, it became possible to develop a cloud-based GRC platform that was quick to implement and purpose-built to enable collaboration and align the entire business around risk. A focus on the consumerization of the application led to GRC software that was designed to be as easy to use as the apps on your phone.
What Is a GRC Tool? And What Does It Do?
You may be wondering: what is a GRC platform? In that case, it might also be known by other names — it’s often referred to as GRC software, GRC solutions, or GRC tools. Whichever name ultimately helps companies effectively and securely assess, implement, and monitor organization-wide strategies for risk management.
A modern, holistic GRC platform enables an organization to centralize risk management, unify compliance management, and streamline internal audit in one integrated solution. Key GRC platform attributes include:
- SOX: automate administrative tasks; streamline testing and certification; simplify documentation; and get real-time SOX reporting.
- Internal Audit: manage audit planning, fieldwork, and reporting; perform risk assessments; monitor the status of your audit plan, issue reporting, and remediation status.
- Compliance: manage compliance frameworks, controls, risks, issues, policies, and reporting; avoid duplicative assessments and streamline reporting.
- Risk Management: streamline risk identification, risk assessment, risk response, risk mitigation, and risk monitoring; integrate risk management activities to gain alignment and reduce exposure to undue risk.
How Stakeholders Across the Organization Use a GRC Platform
GRC solutions are most effective when they are utilized by stakeholders across an organization to improve the productivity and effectiveness of a variety of audit, risk, and compliance professionals.
The First Line: Business Stakeholders
Operational Management will utilize a GRC platform to provide input into the risks, controls, issues, and mitigation factors that process owners own and manage. This input automatically syncs with the GRC platform being managed by the Second and Third Lines. A modern GRC solution will give management visibility into audit, risk, and compliance with up-to-date status and custom role-based dashboards.
The Second Line: Risk Management and Compliance Functions
The Risk and Controls team and Compliance team will use a GRC solution to facilitate effective risk management practices and monitor compliance with applicable laws, regulations, and frameworks. The Second Line will use it to support management policies, maintain risk frameworks, identify and monitor known and emerging risks, develop processes and controls, and monitor the adequacy and effectiveness of internal controls.
The Third Line: Internal Audit
The Internal Audit function will utilize a GRC platform to provide independent assurance over the effectiveness of governance, risk management, and internal controls.
Getting all three lines involved in your GRC platform will enable greater collaboration and visibility into risk while decreasing silos across assurance providers.
How to Get Started with GRC
Effective governance, risk management, and compliance means having a well-planned GRC strategy and that all of your internal audit, risk, and compliance data is in a single system of record. With an integrated GRC platform like AuditBoard, organizations have a complete view of risk across the enterprise and teams can transcend silos to stay connected, aligned, and collaborate like never before. Get started with AuditBoard today.