Making Sense of GRC Related Technology & Solutions

Every organization does GRC (governance, risk management, and compliance), but it does not mean that every organization does GRC well. Complicating this is a maze of GRC technologies. Some are built to solve very specific problems, others focus on department/function wide management of GRC related activities, some are enterprise platforms for a specific purpose (e.g., enterprise policy management, third party management, risk management). And some are Enterprise GRC platforms to try to bring everything together in a single architecture. But then many fail, often watering down GRC to the lowest common denominator and frustrating those in the trenches of business and the back-office of GRC. As a result, many organizations have begun approaching GRC architecture and allowing for a core system to be the hub that integrates with best of breed GRC solutions where they make sense.

Adding to this is the maze of over 800 GRC technology solutions in the market across 17 primary segments of GRC domains with many sub-segments in each. The primary segments are:

  • Enterprise GRC Platforms. Capability to manage an integrated architecture across multiple GRC areas in a structured strategy, process, information and technology architecture (see How to Purchase Enterprise GRC Platforms).
  • Audit Management & Analytics. Capability to manage audit planning, staff, documentation, execution/field work, findings, reporting, and analytics (see How to Purchase Audit Management Solutions & Platforms).
  • Automated Control Enforcement & Monitoring. Capability to automate the detection and enforcement of internal controls in business processes, systems, records, transactions, documents, and information.
  • Business Continuity Management. Capability to manage, maintain, and test continuity and disaster plans, and implement these plans expected and unexpected disruptions to all areas of operation.
  • Compliance Management. Capability to manage an overall compliance program, document and manage change to obligations, assess compliance, remediate non-compliance, and report (see How to Purchase Compliance Management Solutions & Platforms).
  • Environmental Management. Capability to document, monitor, assess, analyze, record, and report on environmental activities and compliance.
  • Health & Safety Management. Capability to manage, document, monitor, assess, report, and address incidents related to the health and safety of the workforce and workplace.
  • Internal Control Management. Capability to manage, define, document, map, monitor, test, assess, and report on internal controls of the organization.
  • IT GRC Management. Capability to govern IT in context of business objectives and manage IT process, technology, and information risk and compliance (see How to Purchase IT GRC Management Solutions & Platforms).
  • Issue Reporting & Management. Capability to notify on issues and incidents and manage, document, resolve, and report on the range of complaints, issues, incidents, events, investigations, and cases.
  • Legal Management. Capability to manage, monitor, and report on the organization’s legal operations, processes, matters, risks, and activities.
  • Physical Security Management. Capability to manage risk and losses to individuals and physical assets, facilities, inventory, and other property.
  • Policy & Training Management. Capability to mange the development, approval, distribution, communication, forms, maintenance, and records of policies, procedures and related awareness activities (see How to Purchase Policy Management Solutions & Platforms).
  • Quality Management. Capability to manage, assess, record, benchmark, and track activity, issues, failures, recalls, and improvement related to product and service quality.
  • Risk Management. Capability to identify, assess, measure, treat, manage, monitor, and report on risks to objectives, divisions, departments, processes, assets, and projects (see How to Purchase Risk Management Solutions & Platforms).
  • Strategy & Performance Management. Capability to govern, define, and manage strategic, financial, and operational objectives and related performance and risk activities.
  • Third Party Management. Capability to govern, manage, and monitor the array of 3rd party relationships in the enterprise, particularly risk and compliance challenges these relationships bring (see How to Purchase 3rd Party Management Solutions & Platforms).

While there is such a breadth of GRC related solutions in the market, many organizations are still encumbered by a labyrinth of chaos in manual processes using documents, spreadsheets, and emails for many of these areas. The disconnected silos of manual GRC processes encumbered with documents, spreadsheets and emails are not sustainable and lead to exposure, failure, and loss. Unfortunately, organizations are quick to react to this and often find themselves neck deep in a GRC platform rollout before thinking through their overall strategy, process, information, and technology needs.

The problem with how many organizations approach GRC (remember, everyone does GRC whether you use the acronym or not) is that it has not been designed properly, particularly when it has been designed around the capabilities of a specific platform. Too often organizations are letting a GRC platform define their GRC strategy instead of letting their GRC strategy shape their GRC platform and architecture. Organizations end up with significant risk gaps within their operating models despite significant investment in ‘leading’ GRC platforms that are scattered and disconnected across the business. This has resulted in a poor return on investment in GRC related projects that fail to drive value or opportunity that GRC transparency should create.

GRC projects fail when:

  • Lack of a GRC strategy and understanding of processes.
  • Letting a GRC solution/platform define your GRC strategy, processes, and information.
  • GRC platforms that under deliver to the range of needs and processes.
  • Trying to meet the needs of departments with a solution that is not flexible that forces everyone to manage GRC to the lowest common denominator.
  • The needs of one department with budget overshadow the needs of other departments.
  • GRC platform implementation that goes over budget and misses deadlines while draining resources.
  • GRC platforms that require extensive and costly build-out to achieve capabilities the organization thought were native in the product.
  • GRC platform that does not integrate well with other systems.

Organizations that have went down the wrong path with a GRC technology strategy may be ready to throw in the towel and call it quits. The truth is the organization can never abandon GRC as it is something every organization does.  It may be done poorly, it may be done well, but every organization does GRC if they call it GRC or something else. While a technology strategy and GRC platform may be scrapped and the organization may retreat to old manual processes, it does not change the fact that the organization has a duty and responsibility for GRC.

There are a couple of key upcoming events to be aware of that can assist organizations on their GRC strategy and the role of technology in that strategy, these are:

  • Findings from the OCEG GRC Technology Strategy Survey. OCEG engages GRC 20/20 to design this survey, analyze the findings, and build the written report. The webcast for this survey is on January 21st.
  • State of the GRC Market Research Briefing. This is GRC 20/20’s flagship Research Briefing that is 2 hours in length and goes into the details of drivers and trends in GRC, market segmentation and forecasting, RFP scopes and trends, and buyer inquiries and what organizations are looking for. This is on February 1st.
  • Enterprise GRC by Design Workshop. This workshop aims to provide a blueprint for attendees on effective enterprise GRC strategies in a dynamic business, regulatory, and risk environment. Attendees will learn enterprise GRC strategies and techniques that can be applied across the organization. The next one is in Rhode Island, CT, USA on February 18th.

Spreadsheets in Financial Control Processes

Also GRC 20/20 is working on a specific research project focusing on the regulatory scrutiny (e.g., SOX) of spreadsheets in financial control processes.  Organizations are facing increased pressures to ensure that they have adequate controls over end user computing controls, particularly spreadsheets. This is very apparent when spreadsheets are used as part of accounting processes. The Public Company Accounting Oversight Board (PCAOB) has requested auditors to increase their focus on ‘System Generated Data and Reports’ driving the application of so-called ‘enhanced audits’ of Sarbanes Oxley (SOX) control processes. This scrutiny is leading to new SOX failings for companies that had previously had no such failings. In particular, these enhanced audits are exposing the role of spreadsheets in context of Internal Control over Financial Reporting (ICFR) and the fact that such spreadsheet controls are often open to manual manipulation.

This survey is intended to gather organization awareness and concern of spreadsheet controls in context of ICFR, audits and PCAOB scrutiny.

, ,

No comments yet.

Leave a Reply