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Governance, Risk Management and Compliance (GRC): The Dangers of Not Getting it Done Right
All businesses have some vulnerabilities and are challenged by a variety of risks. Some of the risks businesses face include enterprise risk, operational risk, project risk, IT risk, and financial risks.
The GRC market is expected to grow to $11.5 billion by 2019 as a result of nearly 15 percent annual growth over the next four years, according to a study by Micromarket Monitor.
Governance, Risk Management, and Compliance (GRC) solutions are designed to mitigate risk and help businesses steer clear through the various threats which they face. Governance is the overall management of a businesses so as to achieve a set of goals and objectives. Risk Management is the prediction and management of threats that could stop a business from achieving its desired goals. Compliance with both government laws and regulations and company policies and procedures keeps businesses from running afoul of state and federal regulations.
Who or what is affected by GRC? Forrester analyst Christopher McClean said that it is “everybody in the organization. Every individual has risk implications tied to him or her.”
The dangers of not getting GRC right include the following, according to an SAP/Loudcloud study: loss of business and revenues (45 percent), reputational damage (42 percent), business disruption (37 percent), lawsuits (32 percent) and financial penalties (31 percent). Companies whose valuations are based on the high value of their brand are particularly vulnerable.
The range of issues that fall under the umbrella of GRC is very large, so much so that Gartner recently broke down their analysis of GRC into seven different submarkets:
- IT Risk Management
- Operational Risk Management
- IT Vendor Risk Management
- Business Continuity Management Planning
- Audit Management
- Corporate Compliance and Oversight
- Enterprise Legal Management
