In the recent past, due to increased regulations and demand for transparency, most businesses are striving to operate efficiently, share information effectively, and report activities in a manner that minimizes wastage. Also, businesses have been employing different ways to manage the broad range of issues that impact on the efficiency of the business. GRC is one of the most utilized strategies that enable an organization to achieve its objectives and address risks. It has three components that include:
Governance :
Involves the formulation of policies that direct and control an organization. It is the method of governing a business by instating laws and regulations to employees and stakeholders. Also, it encompasses action plans and performance measurement that help organizations achieve their objectives.
Risk management:
It is the process of identifying, analyzing and evaluating followed by coordinated efforts to minimize and control uncertainty in the business. Businesses are faced with imminent threats from different sources that may impede operations. Risk management is also involved in the evaluation of opportunities. For instance, new projects and programs are considered to be risky because they are based on assumptions.
Compliance:
It is the process of ensuring business operations aligns with laws, policies, and regulations. Due to the increased regulations, most businesses are employing various controls to avoid violation of government laws. Also, organizations have internal controls and standards that govern the employees and stakeholders.
Benefits of GRC In the Business:
Initially, implementing GRC platforms was challenging, and most organizations did not consider it. However, due to the advancement of technology, integrating the platform across different departments has become easy. For instance, the GRC software is providing businesses with a proactive and effective management approach. Below are some benefits of integrating GRC in the organization.
1. Cutting Cost:
Integration of GRC helps to significantly cut on spending and also focus on activities that boost revenue. Large organizations are likely to benefit more since wastage will be reduced in plenty of areas. This helps to improve productivity and efficiency.
2. Centralize GRC Processes:
There are various GRC processes such as audit, information security, risk assessments, etc. that are involved in the running of an organization. In most case, different approaches such as Sharepoint and emails are used to share results. However, GRC tools can be used to configure all the processes in a central place and a user-friendly format for easy retrieval. This also helps to reduce duplication of tasks.
3. Improved Reputation:
Integrating a GRC program is likely to boost your organization reputation. Potential customers and stakeholders will be willing to work with you if you publicize your policies and how they work. For instance, lenders and government agencies may show interest if your fiscal systems and internal controls are robust. Sharing the policies indicate that you are transparent and willing to work with interested parties.
4. Fewer Lawsuits:
Failing to comply with government regulations may result in lawsuits and even closure of your business. For instance, every organization is required to conduct an external audit every financial year. Also, there are certain rules and regulations pertaining to hiring employees. Integrating GRC in the organization will help to avoid conflicts with regulatory agencies.
5. Reduce Risks:
Sometimes it can be challenging to identify and address risks using conventional approaches. However, GRC provides a comprehensive preventive approach that helps to address uncertainties and threats.
