There is an ever-increasing recognition among corporate executives and directors that GRC (Governance,Risk, and Compliance) needs to play a more central role in the organizations management and overall strategy. Shifts and changes in risk, technology, globalization, data, and distributed operations pose serious challenges to organizations of all sizes. Keeping this growing complexity in sync with the organization holistically becomes even more challenging when the organization’s risk management and compliance processes are inhumed deep within the individual departments of the organization.
Business is no longer defined in the traditional brick and motor terms that we once were accustomed to but is now rather a complex web of interconnected relationships and interactions with third parties. Organizations are in a consistent state of change as business operations and third-party relationships and interactions grow, and the complexity and intricacy of managing potential risk exposure grows along with those relationships and interactions.
Organizations of all sizes benefit from implementing an integrated approach to governance, risk, and compliance that allows different processes and departments to have their view of risk that can roll into enterprise risk management and reporting to support business objectives. This is accomplished through a common and. shared GRC strategy, process, and technology architecture to support overall business operations and risk management processes. Understanding the full picture of GRC strategies and processes, as well as selecting the right solution and technology architecture, is key to meeting the risk management needs of all organizations.
Even the smallest of organizations often have a complicated web of third-party relationships and interactions i.e. global supplier, client relationships, business partners etc. Midsized organizations specifically are encumbered by a unique challenge, as they face many of the same problems as large organizations but lack the resources and staff to adequately address it. They naturally try to react and put out fires, addressing risk and compliance in solitary approaches, but they really need to step back and think strategically and not tactically. They should look to how they can strategically address. risks across the organization.
The great Chinese general and renowned military strategist Sun Tzu once stated, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” If small and midsized organizations wish to remain competitive in such a dynamic and volatile risk environment, then they have an obligation to oversee GRC as an integrated part of business strategies and operations, and not have a reactionary approach to risk and compliance issues and processes. Tactics without strategy is dead.
GRCis often misapplied as a result of these uncoordinated and nonstrategic approaches confined in silos and corporate egos that get in the way of developing a sound GRC strategy to protect the organization from risk exposure and achieve business objectives. Risk is pervasive; there can be numerous departments throughout these organizations that manage risk with completely different approaches and thoughts on what risk is and how it should be measured and managed.
The depth and breadth of risk environments that midsized organizations have to monitor can extend throughout political, regulatory, and operational risks. Managing business change and risk in these scattered approaches has buried many midsized organizations. Developing a GRC strategy and technology architecture to link and measure risk to strategic objectives and monitor performance against those objectives therefore is critical. The outcome of this is improved decision-making, better return on investment across the business, improved profitability, and a better customer experience.