Choosing a GRC Tool: A 4-Step Roadmap
With almost every organization operating digitally, the type of risks companies are exposed to has evolved — and so has the number of laws governing small to enterprise-level businesses.
The hundreds of laws organizations have to comply with increase the complexity of doing business. Hence, cutting corners in compliance or using outdated strategies to manage risk can expose businesses to significant vulnerabilities.
A 2023 IBM report reported that noncompliance with regulations was responsible for almost $219,000 of the cost of a data breach.
Not only does noncompliance potentially cost organizations a fortune, but in a PwC study, 35% of executives mentioned regulatory risk and compliance as the key factors hindering organizational growth.
Given the significant financial impact of regulatory breaches, implementing effective governance, risk and compliance (GRC) measures is nonnegotiable for business stability.
The Importance of a GRC Platform
There are multiple definitions of GRC platforms, depending upon the source, industry and use case, but all include the concept of aligning business objects with integrity and sustainability.
Having a GRC platform is essential to protect a company’s reputation, employees and future. Conversely, not having a robust GRC solution in place opens you up to multiple risks.
First and foremost, failing to have robust GRC solutions limits your visibility into risk, leading to unnoticed threats and vulnerabilities. This lack of oversight can result in costly legal or regulatory actions, as happened to 19% of risk and compliance professionals surveyed by Navex. Furthermore, noncompliance can lead to severe financial repercussions, with each breach costing organizations an average of $4.45 million.
Without an integrated GRC platform, businesses struggle to manage and anticipate risks, which hinders their ability to stay competitive and compliant. This disorganization affects decision-making, operational efficiency and the company’s strategic goals.
Competitors who invest in advanced technologies and automated solutions have the upper hand, as they will be better equipped for managing regulatory requirements and risks effectively. This positions them as more reliable and secure, helping them attract clients and partners who prioritize compliance and risk management.
Who Is Responsible for GRC in an Organization?
It’s 2024. Businesses that navigate risk and compliance issues merely by categorizing them into high, medium and low risks are left behind. This approach hinders alignment of risk analysis with business decisions.
That’s why businesses are shifting from making one person or team responsible and adopting a collaborative culture where all departments share responsibility.
These responsibilities typically start at the top and spread throughout the organization, ensuring everyone contributes to managing risks and staying compliant.
After talking to approximately 50 organizations, I found the following general distribution of responsibility for GRC:
- Board of directors: Oversees and approves policies and strategic decisions.
- CEO: Ensures GRC efforts are well-resourced and provides leadership.
- Chief risk officer: Leads risk management and reports risks to the board.
- Chief compliance officer: Oversees compliance, training and communication.
- Chief information security officer (CISO): Manages overall security strategy and ensures that security measures are integrated into the GRC framework. This includes overseeing physical security, cybersecurity and incident response.
- CIO/CTO: Manages technology risks, compliance and security.
- CFO: Handles financial compliance and risk management.
- Legal: Ensures adherence to legal requirements and manages legal risks.
- Human resources (HR): Implements HR-related GRC policies.
- IT: Secures data and enforces IT policies and controls.
- Department heads: Manage GRC processes within their areas and identify specific risks.
- Internal audit: Provides independent evaluations and recommendations.
- Employees: Adhere to policies and report observed risks.
- Cross-functional teams: Combine expertise from various departments for specific GRC initiatives.
Even though GRC duties are spread across the organization, C-suite executives have specific responsibilities. While the CISO oversees security strategy and integration into GRC, the CEO shapes strategy and aligns GRC with company goals.
GRC Implementation Roadmap
In their quest to find the best tools and technology, many businesses end up opting for multiple programs.
However, research shows that using a standardized system, instead of multiple tools, makes processes smoother, improves efficiency and avoids integration problems. According to MetricStream’s 2021 State of Compliance report, 44% of companies struggle with compliance assessments and control testing due to multiple initiatives. And in the Thomson Reuters Risk & Compliance Survey, 49% of professionals agreed that having a standardizing framework can reduce complexity and costs.
The success of a GRC program depends on having a holistic strategy based on a roadmap like the one below, not just choosing and deploying tools.
1. Establish Your GRC Requirements
Every organization should align its GRC requirements with its mission, vision and goals. As Ameet Jugnauth, board vice president of the ISACA London chapter, said:
“To establish your GRC, understand your business and environment (both internal and external), assess your risk appetite and align with government expectations.”
To set clear GRC requirements, ask:
- What are our core business goals, and how do they shape our GRC needs?
- What internal and external factors affect our compliance and risk management?
- How does our risk appetite match our GRC policies and procedures?
- Which regulations or industry standards must we follow?
- What are the key risks in our environment, and how should we manage them?
- How can we measure our GRC effectiveness and make improvements?
2. Choose the Right GRC Technology
Choosing the right GRC technology is crucial but can be time-consuming and costly.
Start by identifying which technologies can contribute to your business goals. It’s always worth pinpointing tasks for automation or areas with security and compliance gaps.
I will talk more about how to choose the right GRC software for your business in the next section. For now, let’s stick to the steps of the roadmap.
3. Prepare Software for Integration
Once you have selected software, the next step is integrating it with existing policies and processes. Most GRC software providers offer consultations and demos to support smooth integration. To make the process even simpler, you can hire a technician or engineer to assist with setup and implementation.
4. Keep Track of GRC Progress
After implementation, assign internal roles and responsibilities to help ensure effective use of the software. Continuously monitor the GRC system’s performance using defined metrics. Regularly assess risks, update controls and adjust policies to stay aligned with evolving regulations and industry standards.
Choosing the Best GRC Platform for Your Organization
I typed “GRC solutions or software” into Google search, and literally every result was a different software claiming exceptional features.
However, I can assure you that hardly one of them will help your organization maintain GRC.
Why? Because not every GRC tool is designed to cater to your organizational needs. Each has a different target audience.
For example, a GRC tool tailored for the healthcare industry focuses heavily on HIPAA compliance, offering features like patient data encryption. Meanwhile, a solution for financial services might prioritize SOX compliance, emphasizing audit trails and financial reporting.
If you integrate that software without prior research, your organization’s compliance could suffer. You might end up with features that don’t align with your specific regulatory requirements, leading to inefficiencies and potential compliance gaps.
That’s why you must be extremely careful when choosing a compliance service provider for effective risk management and compliance. Here’s what to look for when choosing the right GRC software for your organization.
1. Complexity
Dig deep into the tool’s complexity and analyze if it fits your company’s size, industry and operations.
If your organization belongs to the healthcare industry, it will need a sophisticated tool for compliance. On the other hand, a smaller retail business will need something simpler.
2. Deployment Options
Once you have narrowed down the list based on complexity, choose between on-premises and cloud solutions. On-premises solutions run your GRC system on your own servers and hardware.
Cloud solutions are hosted by a third-party provider and accessed over the internet. They offer flexibility and scalability with lower upfront costs but ongoing subscription fees.
If you’re from the financial sector, on-premises security solutions are a better choice. This gives you full control over sensitive financial data, crucial for meeting strict security regulations.
For a startup, cloud solutions like AccuKnox are often better. They help save money on expensive hardware and IT staff. Startups can quickly scale their services as they grow, paying only for what they need.
3. Vendor Evaluation
Look for a vendor with proven GRC expertise. Check their industry focus and client success stories. If they’ve helped similar companies, that’s a strong indicator they can help you.
4. Stakeholder Buy-In
Engage key users from different departments early on. Highlight benefits like saving time and reducing risks. For example, show how IT and HR can collaborate more effectively with a robust GRC tool.
Automate GRC Monitoring, Auditing and Reporting
Having a GRC platform in place is necessary, but not easy. Coming to a point where you are 100% on track can take years, especially if you operate each compliance check manually. Not only is this time-consuming, but manual operation can lead to potential errors. It can also produce incomplete results, as a manual approach causes many organizations to review only a small portion of activities, leaving some risks unnoticed.
Hence, I always say: Automate the process as much as possible.
Automated detection and risk prioritization help you tackle issues more effectively. With AccuKnox enterprise cloud security, it takes only a few hours. Once you have integrated it into your system, it continuously monitors and sends alerts, so you’re always in the loop. Plus, AccuKnox ensures you stay compliant with important standards like CIS, HIPAA and PCI-DSS.
