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By Kunal Nagarkatti, Director-Sales, Clover Infotech
With the market witnessing potential entrants every day, aiming to be the market leader, expansion and efficiency have become an inseparable part of business strategy for every organization. And it is no more restricted to operations, but demands an entire business ecosystem undergoing a 360 degree transformation. However, the ceaseless aspiration for ‘constant growth and global expansion does overwhelm an organization with its magnitude and ambiguities. A large organization undergoing such a transition also has to deal with enhanced governance complexities and increased vulnerability to risks and compliance regulations.The number of organizations venturing into global markets has risen exponentially, posing immense pressure on them in terms of managing their operations, enforcing controls and mitigating risks. To add to this,adhering to regulations (sector-specific, local and international), diverse policies and laws also continue to remain a daunting challenge.
Constantly changing regulations and policies have made it virtually impossible for organizations to not be at fault. Also, while having to focus on revenue generating areas of the business, regularly updating and upgrading IT and other support functions consume considerable amount of resources and time. Hence, such support functions turn into major risk and compliance concern areas.
Non-compliance is a serious concern that could hamper business growth and efficiency, even jeopardizing the organization's existence. Apart from hefty penalties,organizations could also face grave consequences like being dropped from the stock exchanges, seizure of business operations and imprisonment of the company’s directors.The expanding business periphery and evolving work processes add to risk vulnerability. Today, organizations aren’t restricted to a defined work sphere – region, technology or even time bound. Businesses are rapidly adopting bring your own device (BYOD) policies and remote working as a means of increasing profitability by reducing resource expenditure. Cloud has also enabled easy shareability and mass storage, with easy access from anywhere in the world. And with major players battling to gain a technological edge, services are no more restricted to a single platform.
Businesses going digital
Digital dominance is becoming the new battleground for businesses to prove their potential and also to create a platform for expansion, business acquisitions, lead generation and customer management. The key danger that needs to be comprehended, is that in an attempt to achieve business profitability, organizations unknowingly fall prey to being overtly transparent. While doing so, they may leave behind a trail of critical information accessible to people on the social as well as other web platforms. Additionally, with the rapidly changing digital world, it has become practically impossible to maintain the much necessary degree of compliance and governance.
Hence, an integrated governance, risk and compliance (GRC) infrastructure is crucial – to ensure a streamlined work process, make quicker and better decisions, and improve business efficiency without compromising on transparency.
GRC and its components:
GRC is a comprehensive approach that accelerates business growth, while also managing risks and compliances.
. Governance describes the approach through which senior executives direct and control the entire organization,using a combination of information and control structures
. Risk Management is the set of processes through which management identifies, analyzes,and, whenever necessary, responds to risks
. Compliance means to conformwith stated requirements (defined in laws, regulations, contracts,strategies and policies), to assessthe state of compliance, risks and potential costs of non-compliance,and hence prioritize, fund and initiate any preventive and corrective actions deemed necessary
Why businesses need GRC? Business efficiency through compliance:
Fully documented processes and transaction audit trails maintained as per compliance requirements can lead to better information management:
. Make critical information readily available to decision makers
. Reduce manual paper processingand routing
. Eliminate storage issues
. Faster access to key documents
Faster and better business decision making
Effective governance and data availability would help in eliminating time spent on information gathering, compiling, processing, and reporting compliance status – resulting in avoiding of penalties and difficulties.
Leveraging the governance, risk and compliance (GRC) infrastructure, corporate management can adopt the standards mandated by regulatory bodies. An integrated process would mean lapses being minimized as work processes and governance become more transparent and data driven. Also, by following industry best practices, organizations can outline governance processes and maintain a regulation-adhering environment that would serve as an ideal framework around which they could mitigate risks and achieve operational excellence through better business insights.