Governance, Risk, and Compliance (GRC) refers to the processes, policies, and systems organizations implement to manage and mitigate risks associated with their IT systems and data. It involves establishing frameworks and controls for IT operations, data security, and compliance with legal and regulatory requirements. This blog highlights five key points to develop a successful and strong GRC program for your organization. It also discusses the implementation of GRC 5.0 – Cognitive 5.0 in the GRC tools market space and how the vendors are strengthening GRC tools with cognitive capabilities to offer more functional and efficient GRC software suits.
Governance, Risk, and Compliance (GRC) tools are crucial for organizations to confirm that they are managing their risks efficiently. These platforms also help them remain mindful of ethical boundaries and operate within the legal regulatory environment. By automating and taking care of the tedious GRC activities such as risk assessment, compliance management, and internal audits. However, the success or failure of these platforms depends greatly on the inherent GRC program, strategy, or framework that an organization follows. All the activities that GRC platforms perform are aligned with this fundamental framework.
A GRC framework is a comprehensive plan that identifies and categorizes all the risks faced by an organization along with the regulatory requirements and reflects the company’s approach towards those risks and legal obligations. It loops in all the relevant stakeholders from financial, technological, legal, and other departments for their support and involvement in the process. Once formed correctly, this program works as a basic structure based on which the company aligns all its IT activities with business goals while taking care of all the potential risks and compliances. A strategically planned GRC program integrated with the right platform enables organizations to make more informed decisions that are less prone to risks and compliance errors.
According to Siddharth Kumar, Senior Analyst at Quadrant Knowledge Solutions, “GRC aims to create a holistic approach to manage governance, risk, and compliance to ensure that organizations operate in an ethical and sustainable manner while meeting their legal and regulatory obligations. By implementing effective GRC practices, organizations can minimize risks, enhance performance, and build trust with their stakeholders.”
However, developing a robust, agile, and efficient GRC plan has become a challenging task for many companies. We have identified some key points/steps that a company needs to keep in mind while developing a GRC program that would suit its specific needs.
5 key points to developing a resilient GRC program for your business
Developing a strong and effective GRC program from scratch can be overwhelming. Therefore, we have highlighted five key points that you should consider for streamlining the thought process and make the right decisions.
- Understand your risk and compliance requirements
Below are a couple of points to consider at this stage:
- Risk Awareness – To develop a risk resilient framework, you must be first aware of the risk you are dealing with across the business functions. You must identify and quantify the risk in monetary terms and evaluate its potential impact on the business. This identification helps in the prioritization of risk and controls based on severity and determines how much to spend on each control. In addition, it also facilitates scenario planning and stress testing that enables the organization to identify the evolving risks and develop risk remediation plans to address them efficiently.
- Security Framework – Another aspect to consider is the information security framework your business is to follow, such as NIST, HITRUST, CSF, and ISO 27001. This framework acts as a blueprint for defining the policies and procedures for the GRC program.
Hence, defining the business risks, compliance, and security requirements aids in gaining better visibility into how a business may interact with these external factors. The organizations can now efficiently align these factors with business objectives and work out a more considerate and comprehensive program for GRC.
2. Build an integrated and collaborative – Integrated GRC
The GRC strategy needs to be embedded in the business system and processes. Each step of the plan needs to be aligned with the relevant business function and the associated executives must be on board. The business must employ a cross-functional team to enforce GRC practices in the organization. In addition, executives should also participate actively in the process at the executive level so that the likelihood of issues occurring due to lack of awareness is reduced and the problems can be tackled with more agility.
Siddharth states, “Integrated GRC across different functions such as risk, compliance, audit, IT, third-party, business continuity, legal, and finance help in aligning the risk management and ensure that all risks are identified and addressed effectively. It helps organizations to eliminate workflow silos, reduce repetitive tasks and duplication of efforts and provide comprehensive visibility on high-risk areas. Integrated GRC improves coordination across the business functions to achieve effectiveness, efficiency, and agility.”
Hence, integration & collaboration is an important factor that should not be ignored.
3. Choose the right technology for GRC
Now that you have established the business-wide policies and processes for GRC, the next thing is to identify the right tools that best suit your defined requirements. The right tool will take care of your GRC program by automating processes like audits, regulatory compliance, policy enforcement, and audits. The right GRC technology that suits your specific and unique needs goes a long way in helping you manage efficiently the GRC program and strategy you laid out.
4. Workflow automation
One of the biggest benefits accrued by the business through GRC solutions is workflow automation. As Siddharth elaborates, “Workflow automation streamlines the risk management lifecycle by creating a risk profile and automating risk prediction, identification, prioritization, and mitigation. Automated compliance keeps track of all the compliance activities, such as regulations, policies, standards, and contracts, in a single place and ensures organizational compliance with applicable laws, regulations, and regulatory guidance.” Although not particularly a new thing, the importance of automated workflow to improve efficiency and reduce the costs associated with GRC cannot be ignored.
5. Make the GRC part of your organization’s culture
Lastly, you want to ensure that the GRC program you have developed efficiently works in the long run as well. It can be achieved with continuous monitoring. Monitor the plan you created and its performance consistently to identify potential issues that may arise and to check whether the developed plan works smoothly and in alignment with the business objectives. In case of any problems, make adjustments to resolve them and fit the requirements. Part of it requires integrating GRC into the organization’s culture. This will make the GRC program truly resilient in the long term and will give you security from unwanted risks, attacks, and other compliance-related issues.
Key roles for the development of GRC:
There are many stakeholders that play a significant role in the development of GRC program. Here are some roles that we think are quite essential for GRC.
The organizational C-suit has to be completely on board for successful GRC implementation. They are the ones who will make the decisions and communicate the strategy and its proper implementation across departments. Other key roles include risk managers, compliance officers, finance officers, legal officers, and auditors. Input and involvement of these executives are necessary to take care of all the related legal, financial, risk, regulatory, and other aspects for a successful and resilient GRC strategy. Creating such a cross-functional team is highly recommended. Apart from these functions, support from IT, HR, and other operational team leaders is also helpful in embedding the GRC program effectively in the organization’s culture.
Moving to the practical part, we know that the right GRC tool is essential for the successful implementation of the GRC program. Therefore, GRC software providers, developers, and vendors are constantly evolving their solutions to stay ahead in the market and offer the best possible capabilities to the end users.
One such development is GRC 5.0 – Cognitive GRC. Building on Agile GRC 4.0, the cognitive GRC leverages advanced cognitive technologies. Often referred to as intelligent automation, these technologies include Natural Language Processing (NLP), Natural Language Generation (NLG), Optical Character Recognition (OCR), AI, ML, and Robotic Process Automation (RPA). Siddharth informs, Intelligent automation enables the organization to transform from a controlled, coded, and regulated GRC environment to a self-learning, autonomous, and independent one. The software providers in the market are increasingly leveraging these cognitive technologies to provide more automated end-to-end GRC management solutions.”
If you want to know more about how the vendors are leveraging cognitive capabilities and moving the market from Agile GRC 4.0 to cognitive GRC 5.0. you can read the full market insight by our Senior Analyst Siddharth Kumar.
In today’s fast-changing business environment, the focus should be on simplifying the GRC programs that can quickly respond to the changes and adapt accordingly to suit the business needs. Technology also plays a critical role in this manoeuvre. Therefore, cognitive GRC is becoming the choice for most organizations now for developing and implementing the efficient and robust GRC that suits their business goals. In the process, the businesses must connect with the right people and be agile to navigate the business in this constantly changing environment to ensure the most effective GRC management while seizing all the potential opportunities.
Author: Vaishnavi Dave, Content Writer, Quadrant Knowledge Solutions.