Governance, Risk Management And Compliance (GRC): Things To Know
by Arina Smith Business 17 July 2021
If you are a part of a business organization, there are probably multiple challenges you face on an everyday basis. Regulations, managing employees, creating new clients, protecting against cybersecurity threats, etc. are just some of the possible day-to-day challenges.
Most organizations know that managing things on an individual basis and not holistically, would be a nearly impossible feat. Not surprisingly most businesses have some type of defined process that can take challenges holistically. This term is often referred to as GRC (governance, risk management, and compliance).
In this article, we dive deep into the concept of GRC and see how this phenomenon has come to define business operations, streamline efficiency, and boost security levels.
The History and Background of GRC: A Small Intro
The abbreviation GRC was first coined in 2003 by a group called Open Compliance and Ethics Group or OCEG. OCEG created the principles and processes of GRC as a way for businesses to ethically achieve profitability.
A lot of activities of the GRC cover many different facets within the organization. For example, a proper GRC means that your legal teams, HR departments, IT and security personnel, finance, etc. can all coordinate and work towards the execution of the GRC. It also requires the active engagement of business owners, CEOs, and/or any other C-level executives.
GRC had existed in a rudimentary form in all business organizations well before 2003, but in last, almost two decades, it has become more structured, formal, detailed, and effective.
For example, SAP access control has allowed for better overall efficiency, increased security, and higher levels of communication and coordination. This has helped protect against threats and maintain chances for business growth.
Benefits of GRC Implementation for Modern Business Organizations
In this section, we will look at some of the major benefits of GRC implementation for modern business organizations.
1. Long-Term Business Stability
One of the most important advantages of GRC is that it helps in listing present and future difficulties for a business organization. This allows the business to hopefully avoid repeating the same mistakes and being prepared for any issues that arise.
2. Optimization of Business Strategies and Processes
A healthy GRC implementation can help management understand the efficacy of business processes and strategies. In other words, it can show which strategies will deliver the required results and which strategies will no. This optimizes the performance of a business and makes be the use of the employee’s time. It also ensures that resources are not spent on strategies that will not deliver results.
3. Increased Transparency and Compliance Records
Following a GRC process results in the business being very transparent in terms of business records and documentation. This is not only helpful for all the internal employees, but it also helps in allowing for thorough documentation and easy communications with auditors and government regulators. Following GPDR regulations is mandatory in most countries of the world.
4. Reduction of Unnecessary Costs and Wastages
Every business wants to be as competitive and profitable as possible when it comes to its finances. However, many businesses fail to consider areas that drain money unnecessarily. A GRC process can help identify teams and/or strategies that are ineffective and are only draining resources. These resources can then be redirected into areas that can deliver better results for the business organization.
5. Maintaining Consistency in Business Operations
Consistency and lack of interruption to a business are two of the most important priorities of any business. For example, a cyber-attack could cause a business to tumble over within a day. Having a GRC helps businesses maintain the stability and consistency of their plans and strategies. By mitigating any potential threats, businesses can focus on day-to-day activities.
The Bottom Line
For a business organization, ensuring long periods of stability is necessary for sustained growth and profitability. While there might be a lot of external factors that are beyond the control of businesses, it’s important that businesses evaluate internal risks, manage them, and mitigating them.