Integrated Governance Risk and Compliance - Choosing the Right Solution

Integrated Governance Risk and Compliance - Choosing the Right Solution

As everyone knows effective Governance is the key factor of every organizations’ success; whether its small scale industry or mammoth sized corporates. The modern day organizations are facing really complex and ambiguous situations on their day to day Governance process. The problems evolving over a period should be addressed in dynamic way than conventional way. So, the organizations should be ready to face the challenges extended on Governance domain.

I believe, identifying the risk factors will drive the way to success. Compliance and governance will go hand in hand to comply with various regulations enforced by governmental bodies, regulators, internal policies or industry mandates. Compliance is not a onetime activity, the organizations should make it repetitive so they can continue with the regulation at lower cost and ensure mandatory compliance liability.

Now a days, leading organizations are searching for ways by which they can enhance their GRC functions while operating at lower cost. For this, they have adopted offshoring, using of shared services, co-sourced and outsourced capabilities. The original cost saving method of GRC is now no longer the sole motivation for the leader. Additional methods like optimization of process, standardization of processes and methodologies, enhanced career opportunities for employees, talent sharing across business functions and process innovation are all considerations towards how the GRC function is managed.

Effective design of the overall GRC strategy needs to be redefined based on an overall assessment of risks (strategic, operational and financial) and compliance. Easier solution for this is taking an integrated GRC process approach and deploying a single system to manage the multiple governance, risk and compliance initiatives across the organization. A Basic model of GRC can be represented in the block diagram.

A well-defined GRC approach focuses on maintaining the right balance between the risk and reward. The effective risk management program should focus on value protection and value creation in the organization. There are so many tools and frameworks available in the market to deal with the current complex GRC landscape. Although the tool is the enabler of GRC, we should understand the features and limitations of the tool before starting the GRC journey. While selecting the right tool in an organization we need evaluate following factors.

  1. General Considerations
    • Cost – This is a significant factor selecting a right tool in the organization. While considering cost we need to consider the total cost of ownership (TCO); it includes hardware, implementation and consulting fee, training, maintenance, operational costs, etc.
    • Vendor reputation – Chose the vendor wisely, as it’s a super competitive market it’s evident that weaker players will fade down. Hence it’s important not to get stuck with a tool that would get obsolete in couple of years.
    • Product Strategy and Vision – As we discussed before GRC is an ongoing activity and its process and method will change dynamically. We have to ensure that the chosen vendor has long-term view of its product offerings and has a mechanism to adapt and change the landscape as needed.
    • Simplicity – The platform should be easy enough for the non-technical people to manage – automate processes, streamline workflow, manage user access, etc. Many platform now a days provide point and click type development capability to achieve this.
    • Integrated Capabilities - The platform should provide an integrated approach to unify policies, controls, risks, assessments and deficiencies across the organizational level. This will ease the system complexity and reduce the training time.
    • Collaborative - The Platform should have cross functional collaboration capabilities. Business users across different domains can work together in an integrated framework using common processes and data.
  2. Feature Requirements
    • Governance – The tool should facilitate governance with organization’s business objective. It should enable executive management to swift through clean and quick reporting mechanisms and provide a well-designed decision support mechanism to higher management.
    • Risk management – Risk management is a continual process and it should begin at the conception stage and the selected GRC platform should support this ongoing effort. Risk management must provide consistency between different areas of the same organization. This will help utilization of the same tool across the organization and it will provide better understanding of the organizational risk level.
    • Compliance – Ensure authoritative libraries of all applicable compliance level requirements and their controls. Almost all modern day GRC platforms provide this feature extensively. The platform should provide ability to correlate similar requirements across different compliance regulations.

Organizations are increasingly leaning towards GRC platforms to achieve collaboration across governance, risk and compliance. It is evident that all applicable criteria are considered before investing to a GRC solution to ensure positive return on investment (ROI). This ROI-driven approach will improve an organization’s ability to select the right GRC processes and platform that fits its need and will help it manage the complexities associated with GRC efficiently.

Authored by Jith Raj

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