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Governance, Risk and Compliance (GRC) helps align IT activities, risk management, and compliance with governance processes to achieve business goals.
What is GRC?
Governance, risk, and compliance, commonly referred to as GRC, is a collection of processes and procedures that assist organizations in achieving their business objectives, managing uncertainty, and ensuring integrity and trust.
The primary objective of GRC is to incorporate effective business practices into daily work practices. Although not a recent concept, GRC has gained significant importance as risks like cybersecurity, financial credit, and climate change, have become more abundant and detrimental reputationally and financially.
GRC today encompasses various disciplines, including enterprise risk management, compliance, third-party risk management, internal audit, and incident management. Each discipline has its own priorities and methods, but GRC leaders are now realizing the benefits of sharing data and intelligence to improve outcomes and strengthen the organization.
Modern GRC software can effectively integrate these disciplines, incorporate necessary content, align with your business model and integrate artificial intelligence for automation.
What does GRC stand for?
GRC stands for Governance, Risk, and Compliance and refers to the strategy to implement policies that protect the organization from risk with a process to proactively identify and reduce emerging risks in order to improve overall efficiency.
Governance: Governance refers to the overall operations at an organization such as planning, prioritization, IT management and cybersecurity management that are established to support organizational goals.
Governance defines the responsibilities of key stakeholders, such as the board of directors and senior management and includes the following:
- Ethics and accountability
- Transparent information sharing
- Conflict resolution policies
- Resource management and prioritization
Risk: Risk is any uncertainty that can potentially harm the business and interfere with the business goals. Risk management is a set of activities carried out to identify, assess, mitigate, and respond to risks.
Businesses face different types of risks, including financial, legal, strategic, and cybersecurity risks. Proper risk management helps businesses identify these risks and find ways to remediate any that are found. Companies use an enterprise risk management program to predict potential problems and minimize losses.
Compliance: Compliance refers to the organization's adherence to all the rules and regulations relevant to its system and procedures.
Compliance is the act of following rules, laws, and regulations. It applies to legal and regulatory requirements set by industrial bodies and also for internal corporate policies. In GRC, compliance involves implementing procedures to ensure that business activities comply with the respective regulations. For example, healthcare organizations must comply with laws like HIPAA that protect patients' privacy.
What does GRC look like when done right?
When done right, Governance, Risk, and Compliance (GRC) is a comprehensive framework that ensures organizations effectively manage and align their governance, risk management, and compliance activities. It involves the integration of various processes, functions, and capabilities to provide a structured approach. GRC encompasses internal audit, enterprise risk management, and compliance management to address internal controls, risk identification and mitigation, and adherence to regulatory requirements. By adopting a unified approach to GRC, organizations can gain visibility into risks, make informed decisions, and ensure that their activities, processes, and objectives align with corporate policies and regulatory compliance. It enables key stakeholders to effectively manage risks and drive principled performance, creating a resilient and accountable organization.
How does GRC work?
GRC typically works in a 'top-down' manner. A GRC framework is developed to give the leadership a roadmap to include the right policies and encourage the right practices that support information security and business goals. The framework defines measurable goals in the path of GRC execution.
Today, businesses are becoming increasingly complex. What they need is an effective way to identify and manage key activities in the organization. And of course, in organizations with multiple departments and systems, it becomes important to manage all activities in a cohesive and consistent manner to have better control over the overall organizational operations. GRC software and processes help achieve this. It brings efficiency and transparency to the table and makes people, processes, and technology more productive.
Defining a GRC strategy can be a mammoth task. However, you don't have to do it from scratch. With an automation-enabled platform such as 6clicks, you get ready-to-use content embedded in the platform and the functionality you need for automation that can be customized for the unique needs of your organization.
What's driving interest in GRC?
In today's rapidly evolving business environment, there are several factors that are driving significant interest in governance, risk, and compliance (GRC). One of the key drivers is the crowded and interconnected risk landscape. Organizations face a myriad of risks that are often complex and interconnected. This includes financial, operational, reputational, and cybersecurity risks. The increasing complexity of these risks has made it essential for organizations to adopt a holistic approach to risk management through GRC.
Rising regulatory compliance requirements also play a crucial role in driving interest in GRC. Regulatory bodies are becoming more stringent and demanding in their requirements, especially in industries such as finance, healthcare, and data privacy. Organizations face heavy penalties and reputational damage if they fail to comply with these regulations. GRC enables organizations to ensure compliance with regulatory requirements by providing a structured and integrated approach to managing and monitoring compliance obligations.
The digitization of risk management is another significant factor driving interest in GRC. As businesses increasingly rely on technology and data, the need for effective risk management in the digital realm has become paramount. GRC solutions enable organizations to effectively manage the risks associated with digitalization, including cybersecurity and data privacy risks.
Moreover, organizations are realizing the importance of integrating risk management into their corporate strategy. GRC helps organizations align risk management practices with their strategic objectives, ensuring that risks are considered and addressed proactively in decision-making processes. By embedding risk management in corporate strategy, organizations can enhance their ability to navigate uncertainties and seize opportunities effectively.
Lastly, the evolving sophistication of analytics is reshaping the risk terrain and generating interest in GRC. Advanced analytics and data-driven insights allow organizations to identify, measure, and understand risks more accurately. GRC solutions leverage analytics to provide organizations with real-time visibility into risks, enabling proactive risk mitigation and decision-making.
What is GRC software and what does it do?
GRC software implementation can be a challenge for most organizations because of the complex and volatile requirements.
Modern GRC software is multi-tenanted and cloud-based that simplifies implementation by automating certain processes and providing the means to coordinate and collaborate. It reduces complexity and improves efficiency. A side note: learn more about multi-tenanted GRC software here.
The good news is there are a number of GRC software tools available on the market. If you are looking for help in evaluating different GRC solutions, our GRC evaluation checklist might help. The 6clicks platform for GRC is one of the most efficient and affordable platforms that revolutionize the GRC implementation experience. With a vast content library, dashboard, analytics, automation, and AI, 6clicks brings all GRC activities to a single platform for cyber risk management, operational risk management, enterprise risk management, audit, issue and incident management, vendor risk management and more.
What problem does GRC software solve?
GRC, short for Governance, Risk, and Compliance, is a holistic approach that aims to solve the problem of unprincipled misconduct, mistakes, and miscalculations within organizations. These issues can result in significant losses, amounting to over $1 trillion USD annually. GRC professionals, trained in the principles of Principled Performance, play a crucial role in producing and preserving value, achieving objectives, addressing uncertainty, and acting with integrity.
GRC combines various processes, functions, and capabilities to provide a structured approach to governance, risk management, and compliance. It encompasses the collection of capabilities and tools that enable organizations to effectively identify, assess, and mitigate risks, ensuring compliance with regulatory requirements.
Key components of GRC include internal audit, enterprise risk management, and compliance management. Internal audit evaluates internal controls and provides recommendations for improvement. Enterprise risk management identifies and assesses various types of risks, such as cyber risks, operational risks, and financial risks. Compliance management focuses on adhering to government regulations and industry standards. You can learn more about the core modules and features within the 6clicks platform here.
By integrating these functions, GRC provides organizations with a unified approach to governance, risk management, and compliance. It enables key stakeholders, including the board of directors, senior management, and compliance teams, to have visibility into risks and make informed decisions to mitigate them. GRC also ensures that the organization's activities, business processes, and business objectives align with corporate policies and regulatory compliance. Workflow capabilities within GRC software help automate these processes and activities.
In summary, GRC plays a vital role in mitigating the risks associated with unprincipled misconduct, mistakes, and miscalculations. By implementing a structured approach to governance, risk management, and compliance, organizations can reduce losses, achieve their objectives, and act with integrity, ultimately preserving and enhancing their value.
Why is GRC software important for organizations?
In the early 2000s, organization's faced a number of challenges with information and financial security. This prompted the need for a framework that would bring more consistency to the security strategy and overall operations that would reduce the risk exposure. This is how ‘GRC' as a term came into existence. In fact, Michael Rassmussen, a research analyst coined the term and has since published his analysis of 6clicks here.
Due to its association with risk and compliance, GRC is also closely connected to enhanced cybersecurity maturity. It also drives improved decision-making and efficiency in the organization and breaks down the silos between different departments in an enterprise to bring more consistency to the operations.
Who needs GRC software?
GRC software can be implemented by any business big or small across the private and public sectors. Any business that wants to align cybersecurity with business goals, manage risk, and maintain compliance needs to implement GRC.
The need for GRC software is now more important than ever. With horror stories of businesses facing financial losses, penalties, and reputation damage, it has become imperative to allocate dedicated resources for GRC planning and execution.
Which stakeholders typically get involved with GRC software procurement?
GRC requires cross-functional collaboration across different departments that practices governance, risk management, and regulatory compliance. Some examples include the following:
- Senior executives who assess risks when making strategic decisions
- Legal teams who help businesses mitigate legal exposures
- Finance managers who support compliance with regulatory requirements
- HR executives who deal with confidential recruitment information
- IT departments that protect data from cyber threats
How to build a business case for GRC software
Boards and the C-suite may understand that GRC technology can improve oversight and enhance risk and compliance, but they may hesitate to allocate a budget. The challenge lies in clearly defining and measuring the value of the technology in terms of cost, flexibility, efficiency, and effectiveness, in a manner that convinces those responsible for financial decisions.
Integrated GRC software provides standardization of processes, streamlining of data collection, and enforcement of security measures. Automation of routine tasks enables the risk and compliance team to focus on more valuable work, such as investigating and resolving issues. The inclusion of analytics and centralized data offers up-to-date, data-driven insights, identifies unnoticed interdependencies, and provides early indicators of risk for strategic decision-making.
Real-time reporting extracts the story within your data for better, faster decisions. Dashboards enable continuous monitoring of key indicators and metrics. Integrated GRC software provides hard data on the current status of your risk and compliance program, weaknesses, and necessary actions, all at your fingertips.
An integrated GRC platform provides comprehensive risk visibility, reducing unexpected incidents. Integrated GRC software documents and presents every risk in the context of other risks and the organization's goals.
Top leaders understand the importance of having immediate access to real-time risk data to make informed strategic decisions for the organization's success. With a well-designed GRC strategy and integrated technology, leaders gain visibility into risks and the flexibility to overcome obstacles, ensuring a clear path to success.
Check out the GRC buyer's evaluation guide here.
