One of the most significant challenges that companies face today is risk and compliance management. With a fast-evolving regulatory environment, scrutiny for internal processes, and decentralized operations, many mid-sized companies are working hard to find ways to organize their approach to managing risk. Having a clear strategy in place helps you mitigate risks and make smart decisions that foster your company’s evolution.
Governance, Risk and Compliance (GRC) policies let mid-size companies centralize these issues into one seamless strategy that guides everything in your organization. A strong GRC plan influences all areas of the business, from strategy to product development. As CIO writes, “Think of GRC as a structured approach to aligning IT with business objectives, while effectively managing risk and meeting compliance requirements.” The same can be said about GRC as a framework to manage important decisions and investments across the organization.
In many cases, large organizations have fully developed GRC plans in place; however, for mid-size brands, it is imperative to lay the foundation for these strategies to guide organizations as they continue to grow. What do business leaders and IT managers need to develop their own GRC strategies?
What Is a GRC Strategy and Why Do I Need It?
At a high level, GRC strategies allow organizations to take a deep dive into identifying their areas of risk, understanding what they need to do to stay in compliance and creating policies that ensure consistent governance across the company. As the business environment has become more complex and compliance has become more crucial to day-to-day operations, organizations need a strategic approach for thinking about and enforcing their governance policies.
Risk comes from a variety of areas:
- Information silos and lack of transparency: When areas of the organization operate independently or don’t share critical information, that can lead to compliance risks and inefficiencies that cost both time and money.
- Changing legal situations: Regulatory and legal environments are constantly evolving on issues ranging from data to trade guidelines.
- IT investments that aren’t centralized or aligned with the company’s most important objectives: Ensure that the technology tools you’re using meet industry compliance guidelines, and that dollars spent on technology tools support your organization’s top goals.
- Fragmentation between different parts of the organization: When your leadership doesn’t have a shared vision or plan for achieving goals, it can lead to fragmentation. A GRC policy provides a centralized set of goals and an approach for getting there.
- Leaders making decisions without access to critical governance-related information: Mid-sized organizations can be decentralized. A GRC strategy ensures that governance-related information is available to company managers involved in making decisions and investments.
As different challenges arise, companies that are able to respond effectively — while reducing their risk — have a set plan in place to respond in a timely manner and achieve faster risk reductions. A good GRC framework provides enough context for both agile and informed responses.
Creating a GRC Plan that Works for Your Organization
Moving forward with a GRC plan must start with basic education and awareness. In a blog post, Gartner reports that in one study they conducted, 40% of organizations weren’t using GRC software and 65% of those leaders weren’t aware of the term GRC. When you embrace GRC at the organizational level — and invest in tools that go along with it — you provide a whole new way of approaching issues that come up and affect your company. For mid-sized companies, this can be a conversation that begins with education and exploring how a GRC policy lets you achieve your larger organizational goals.
There can be several steps to implementing a GRC plan:
- Start by identifying need and internal champions: Outlining, implementing and enforcing a GRC strategy is a significant undertaking. It requires financial and human capital resources and may fundamentally impact your core business processes. Start by identifying who in the organization will drive the initiative. Now the goal isn’t to have a huge department in charge of all of this. But it’s about making sure that the right people get the right information at the right time and that the right objectives are established and the right control processes are put in place.
- Don’t start from scratch: As CIO notes, there are several established frameworks within the GRC world that can provide a starting point. Rather than developing your own process from nothing, build on best practices that have been used for a decade in multiple industries. Some options to consider include: COBIT, COSO and ITIL. The framework will help guide you through four specific elements of developing a GRC plan that works:
- Strategic alignment: Determine why GRC is a priority for your organization and how it will help you achieve your most important business objectives.
- Program development: What do the specific elements of your program look like? What guidelines, policies and standards are you putting in place?
- Risk controls: What actual business processes will be affected? What controls, tools and technology are needed at an implementation level?
- Monitoring: Once your GRC plan is in place, how will it be monitored over time? What will you do for regular reporting? Will a larger scale audit happen on a regular basis — such as annual — for continual process improvements?
- Determine whether you’ll seek certification: Another asset in your ongoing development and enforcement of GRC is having a team member with a certification. A number of different certifications exist; this list is a good starting point for highly regarded options. A certification program in GRC helps your team understand what’s necessary for setting up internal governance processes, putting plans into place for their enforcement, conducting audits to ensure they’re being followed and continuously improving the process over time.
- Make it easier to enforce the policies with GRC software: With today’s technological tools, it’s easier than ever before to enforce policies at a practical level. GRC software tools allow companies to configure a data tracking and reporting system that meets their needs. TechTarget sums it up: these “tools allow administrators to identify an organization’s risk exposure, measure progress towards quarterly goals or quickly pull together an information audit. Good governance, defined as effective, ethical management of a company at the executive level, is treated as an objectively measurable commodity. Data retention and risk management are converted to similarly measurable metrics.” Successful data tracking, reporting and auditing is the heart of GRC implementation, and the right technology allows organizations to implement it with ease.
- Be prepared to invest over time: Launching a full-fledged GRC program can be expensive. According to Forbes, mid-size organizations can spend millions per year creating programs that comply with specific compliance requirements. Develop a plan to make incremental investments, beginning with your organizational priorities and expanding over time. Assess where technology can help you save money in the long-term. A GRC program doesn’t have to be an all-or-nothing deal. Instead, it’s about making the commitment to systematically addressing the risks that your company faces and continuously seeking improvement over time.
If you’re looking for better ways to mitigate your company’s risk and improve performance across the business, GRC can help. Mid-size companies are at just the right size to begin putting a plan in place to manage complexity and guide future growth. Launching your own strategy is a multi-step process. Begin by educating yourself about the existing frameworks, and determine what tools and technology can help you with a successful implementation. Mid-size organizations across industries find that it’s well worth the investment, and it sets them up for future growth and the ability to tackle even the most complex compliance challenges.