It takes more than the occasional effort to tackle the risks businesses face today. Businesses of all sizes are looking to adopt structured approaches to manage risks systematically and proactively to ensure information security and compliance. Governance, risk and compliance (GRC) is one such approach that ensures business activities, such as IT operations, align with business objectives while also managing risk and meeting compliance requirements effectively.
This blog will explain the nuances of GRC and how it can be used to reduce risk without increasing staff or expenditure.
What is governance, risk and compliance (GRC)?
An acronym invented by the Open Compliance and Ethics Group (OCEG), GRC refers to the integrated collection of all capabilities necessary to support Principled Performance, to reliably achieve objectives, address uncertainty and act with integrity. Some of the capabilities include:
- Governance and strategy
- Risk management
- Internal audit
- Compliance management
- Ethics and culture
- IT and security
GRC is simply an organizational strategy for managing governance, risk management and compliance with industry and government regulations. It helps businesses effectively manage IT and security risks, reduce costs, meet compliance requirements, and improve decision-making and performance.
What are the components of GRC?
The GRC framework is based on three elements:
- Governance: This refers to how an organization is directed and controlled. In the GRC framework, governance entails setting direction (through strategy and policy), monitoring performance and controls, and evaluating outcomes.
- Risk: Anything that threatens an organization from achieving its objectives is a risk. This aspect of GRC deals with identifying, analyzing and controlling risks that could negatively impact achieving strategic objectives.
- Compliance: Ensuring an organization does everything to comply with government and industry regulations, its own IT policies and procedures, or any other specific requirements.
What is the difference between GRC and ERM?
While both share the same goal, which is the continued achievement of an organization’s objectives, they approach it differently. Enterprise risk management (ERM)is a proactive strategy that emphasizes risk-based intelligence by focusing on addressing root cause risks and prioritizing risks effectively. It helps organizations identify and anticipate risks, including financial, operational, reporting and compliance risks.
GRC, however, goes beyond just risk management. It brings all departments together to achieve the same objective. ERM is considered a subset of GRC since risk management is a crucial element of GRC.
Why is GRC important?
Businesses are continuously looking for ways to tackle risks that arise on a daily basis. The rise in the importance of GRC can be largely attributed to:
- Collection and use of sensitive data: Sensitive data, especially personally identifiable information, has brought a significant risk of abuse that businesses cannot ignore.
- Rise in regulatory compliance: Nearlyeveryorganization is expected to complywith some standard, guideline, scheme or regulation from an ever-growing and ever-changing list of regulations.
- Increased digital risks: New digital points of access to a network— such as the internet of things (IoT), third parties and blockchain — are increasing risks exponentially.
- Growing emphasis on risk management in corporate strategy: More businesses are viewing risk management as a key component of their corporate strategy.
- Enhanced analytics: Better analytics make data-driven decisions easier and more accurate.
These changes are pushing more senior leaders to collaborate with various stakeholders across their organization to identify, manage and reduce risk. A comprehensive GRC strategy helps organizations remove silos and increase collaboration to keep risks at bay.
Who uses GRC?
GRC can be implemented by any organization — public or private, large or small — that wants to align its activities with business objectives, manage risk effectively and ensure compliance. Over the years, organizations from several industries, such as manufacturing, business services, retail, finance, healthcare and government, have turned to GRC. They usually develop and use a GRC framework for leadership, the organizations themselves and for IT operations to achieve strategic objectives. The goal is to correlate information related to business processes, policies and controls with the work carried out by IT, finance, HR and C-suite executives.
A GRC framework makes it possible for organizations to carry out functions that include::
- Risk management
- Document management
- Policy and compliance management
- Audit management
- Vendor risk management
Most organizations use GRC to systematically reduce risks, monitor compliance and enforce policies. This is where internal IT teams and an organization’s managed service provider (MSP) come into the picture. They use the GRC platform to carry out the functions mentioned above (or more) and to generate necessary insights (often in the form of reports) for the organization.
What are the benefits of implementing GRC?
Besides solving complex organizational and communication gaps across an organization, a GRC program provides numerous benefits to an organization.
Implementing GRC effectively lowers costs. Define business policies, review and consolidate controls, and visualize a clear GRC roadmap. You can lower costs further by centralizing GRC with a software solution, leading to enhanced cross-functional visibility and a reduction in the manual risks associated with monitoring and management.
Improved operational efficiency
Implementing a GRC framework often involves automating common processes due to continuous monitoring of controls, key risk indicators (KRIs) and exposures to risk. As a result, your business becomes more efficient.
GRC eliminates unnecessary friction between various stakeholders and fosters a better understanding through improved communication. More importantly, it breaks down the silos in which various teams operate.
An integrated approach to GRC ensures management receives holistic insights on the organization’s operations. This gives them a much better vision of the company’s current standing and a better roadmap to future growth.
Superior insights enable leaders to make better decisions about investments, developments and procurement. These decisions lead to better success with product launches, market expansions, technological enhancements and more.
GRC software, tools and platforms
GRC tools allow organizations to manage core GRC functions through a unified platform. They enable your business to manage policies and controls and assess them with respect to regulatory and internal compliance requirements. An effective GRC solution enables users to reduce management complexity, track risks and minimize costs.
The GRC industry has witnessed a rise in cloud-based tools with automation capabilities that make them easier to use and help businesses keep better track of the evolving risk landscape. A business can choose between three major types of GRC tools:
- Integrated GRC software that facilitates enterprise-wide GRC
- Targeted GRC tools that focus on specific business functions
- Point-solution platforms that target a single aspect of GRC
Why do you need GRC software?
GRC software is designed to help organizations navigate the three most challenging aspects of maintaining data protection and information security assurance for the network environments they manage — governance, risk and compliance. They support organizational health by enhancing operational efficiency and eliminating unwanted compliance audits, financial penalties and legal action.
A GRC solution can help:
- Boost governance and leadership: Governance is all about enforcing your organization’s policies, which starts with documenting all those policies. If you are in IT, your responsibility may go beyond simply documenting all the IT privacy and security policies. You may also be asked to provide a mechanism (usually a secure online portal) where your organization can post all HR policies, and where your organization’s employees can log in, review the policies, and attest to their agreement with said policies.
Governance can extend beyond your organization to your vendors too. For example, HIPAA regulations require “Business Associates” to meet the same IT privacy and security requirements as the Covered Entities they work with. Several other governments and industry standards carry similar trickle-down compliance requirements. The best GRC platforms include a vendor risk management portal to take care of this “trickle-down” factor.
- Advance risk detection and visibility: Managing and reducing risk is at the heart of any GRC software. To reduce risk, you must identify the risks inherent in the networks you manage.
Top GRC platforms incorporate one or more mechanisms and methods for performing a risk assessment. While starting out or taking on a new network environment to manage, you want the ability to quickly perform a baseline technical risk assessment to gauge the gaps between your IT requirements and what you have in place. A GRC platform can help you identify the risks and offer remediation options to quickly get the network into compliance.
- Maintain ongoing compliance: Complianceis the act of doing what you are required (or what you’ve agreed) to do. In this context, compliance extends to not only doing it but proving it with appropriate documentation. GRC platforms are designed to generate evidence of compliance. The better ones will be able to automatically generate that evidence through data-gathering software.
For documentation that cannot be automatically generated, the GRC platform should allow you to upload files — including logs, reports and attestations — to verify a given control or requirement is being met. Irrespective of how the evidence is gathered, your GRC platform should be able to generate key reports at any time during the compliance management process and make it easy to update your systems and generate fresh reports.
GRC automation with Compliance Manager GRC
Compliance Manager GRC reduces IT risk by ensuring compliance with government or industry standards, custom IT requirements included in any business contract or an insurance policy, and your own IT security policies and procedures. It automates data gathering, issue management and all the documentation required to prove due care to any internal or external auditor. A simplified and streamlined workflow makes it easy for IT professionals to manage compliance with all their IT requirements at the same time — regardless of the source or type — through a web-based portal accessible from anywhere, at any time, from any computer. Compliance Manager GRC hosts a growing library of built-in government and industry-standard management templates, allowing you to easily clone them or build a template for any other standard with which you must comply. It is the first and only purpose-built, role-based compliance management platform for MSPs and IT departments, with features like:
- Automated data collection
- A large database of common IT controls and requirements
- A built-in user portal
- A dynamic report generator that automatically prepares brandable risk assessments, policies and procedure manuals, plans of action and milestones, and a slew of other useful supporting documents.
Compliance Manager GRC reduces your business’s risk by reducing the complexity of ensuring compliance with all your IT security and privacy requirements. Most importantly, it’s priced to be affordable for all, with scalable licensing for both MSPs and IT departments. Request a one-on-one demo to see it in action.