What is GRC and what are its benefits?

GRC is the acronym for (Governance, Risk and Compliance). It is the set of practices, processes, and technologies that aligns business objectives, identifies and manages risks, and ensures that the organization complies with regulatory and internal requirements. Through GRC methodologies and software, companies can do all this in an integrated way. 

Through Governance, Risk and Compliance, it is possible to improve decision-making, reduce losses due to non-compliance, and increase organizational resilience. 

See how this framework impacts the operation of companies and find out how to implement GRC policies and systems in highly regulated markets. 

What does GRC mean?

In practical terms, GRC is an integrated framework that connects corporate governance, risk management, and compliance programs so that strategic decisions consider the various types of risks, controls, and regulatory requirements in a coordinated manner. 

As the acronym itself indicates, it is divided into three parts: Governance, Risks, and Compliance. In this way, a company can have a cohesive infrastructure to handle the tasks of these three spheres in a connected way. 

This integrated view avoids redundancies between the various areas that are connected to GRC, such as audit, legal, IT, and operations. In addition, it ensures that controls are applied where they really impact the business objectives, ensures the quality of the products and, in the end, strengthens the reputation and market presence of organizations. 

Below, you can better understand each of these pillars. 

Governance 

Governance is responsible for defining the structure of decisions and strategic impacts. It involves decision-making, with well-defined roles and responsibilities (stipulating who decides what), policies, and data governance within the organization. 

Risks 

It is the part of the GRC responsible for analyzing, identifying, evaluating, mitigating, and monitoring threats that affect the most varied aspects of a company’s operation.  

It is within the Risk Management area that a company must catalog the various types of risk it faces, such as compliance risk, financial risk, operational risk, and even risks associated with suppliers and other third parties. Additionally, it should outline the necessary measures to address all these dangers. 

Compliance 

In compliance, the regulatory requirements and compliance controls connected to these requirements are being worked on. This involves all the controls, evidence, and processes that ensure compliance with laws, industry standards, and even the company’s internal policies to be in regulatory compliance.

Benefits of GRC for Regulated Organizations 

When implemented with executive governance, the GRC methodology brings strategic benefits to the entire operation of a company. In addition, it can be enhanced by the use of a GRC system, thus allowing you to automate tasks, monitor indicators, and create workflows, among other resources.  

Through GRC actions, a company can make better decisions, reduce non-conformities, be more successful in audits and strengthen its reputation. Below, you can learn more about the main benefits of the methodology. 

Data-driven decisions 

By having a connected structure, your company can make better decisions, as it has diverse data sources and, in addition, talk to each other to create complex patterns and data. 

Through solid governance, risk monitoring, and surveillance of standards and laws, it is possible to prioritize initiatives based on data and indicators – including in real time. In this way, GRC focuses on the exposure (and mitigation) of risks and the impact of the operation on the company’s objectives. As a result, you make better-informed and more accurate decisions. 

Cost reduction and operational efficiency 

By making better decisions, you have more operational efficiency and, consequently, fewer expenses. It’s simple: your actions are more fine-tuned and strategic, and thus there is less waste of input, time, and even tools. 

This economy is even present in another aspect: non-conformities. By keeping a close eye on compliance management, you: 

• centralizes evidence and controls; 

• reduces rework in audits and regulatory reports; 

• It avoids failures and errors related to compliance, which generate fines and/or sanctions from regulatory entities. 

Easier compliance and increased market confidence 

This economy is not only present “from the inside out”; it also happens “from the outside in”. In other words, good corporate governance, risk, and compliance methodology strengthens a company’s reputation.  

This is because automated processes and continuous monitoring reduce the response time to requirements and strengthen quality management and control. As a result, the company is better protected against non-conformities and thus runs less risk of being exposed as a brand linked to violations and fines. 

The top three challenges in GRC adoption 

Even with such important benefits, many GRC programs fail. Often this occurs for foreseeable and, more than that, avoidable reasons; Therefore, it is essential to recognize these challenges and know how to overcome them. 

Below, we show the three most recurrent obstacles and those with the greatest potential to curb your governance, risk, and compliance actions. 

1. Organizational silos and fragmented governance 

If, on the one hand, the GRC methodology helps to integrate areas and create a cohesive and efficient operation, on the other hand, building these connections can be a great challenge, especially in companies without great digital maturity. 

It is quite common, especially in companies that operate in highly regulated markets, for areas to maintain isolated processes and data. This split action impedes the integrated visibility that is critical to GRC. 

Overcoming this problem first requires the creation of an organizational culture that facilitates and values the integration between areas, from strategy planning to the implementation of actions. To do this, create multidisciplinary committees, use tools that integrate data, and conduct specific GRC training. 

2. Data quality and integrity 

This siloed action can even be present in the way information is cataloged, analyzed, and made available within companies. Access to reliable data, accurate metrics, and documentation — such as Standard Operating Procedure (SOP) and Work Instruction (IT) — is critical to GRC enforcement. 

The lack of easily accessible and reliable data can precisely hinder decision-making, as they are based on worthless indicators. Thus, the company no longer has one of the main benefits of Governance, Risk and Compliance methodology. 

3. Regulatory complexity and cost of implementation 

Especially in markets where there is a large amount of legislation, industry standards, and regulations, it can be difficult to ensure that the operation complies with all these standards. More than that, even keeping up to date on constant updates and additions to this library of rules becomes a constant challenge. 

A good way to prevent this from happening is to have the support of consultants and specialists who help evaluate the operation and point out possible points of adequacy. In addition, the use of GRC tools allows you to automate this process of analysis, treatment, and even updating of internal policies aimed at regulatory compliance. 

How to implement the GRC methodology 

To overcome these possible adversities, it is essential to have an efficient structure for adopting (and improving) GRC strategies. However, this becomes difficult in highly regulated markets, which have several quality and compliance controls. 

In these cases, there is no single way to implement GRC in a company. It all depends on the nature of the operation, the market in which it operates, the tools already used, and the objectives that are intended to be achieved with this implementation. 

To help your company in this search, we have prepared a structure with six steps that guide the implementation of GRC. The important thing is to remember that these steps are a guideline, a base; Adapt and amplify each step to suit your company’s needs.  

1. Governance 

The first step is to start defining the “G” of GRC. That is, stipulate the company’s governance structure that will define priorities, budget, and scope of the project, as well as evaluate its success. 

Good practice is to include people from the compliance, finance, operation, and quality sectors in the governance of the project. In addition, it is important to have people in management positions (such as CFO, CRO, and CCO) who help strengthen GRC and assist in the dissemination of the project internally. 

2. Diagnosis 

After stipulating the scope of the GRC methodology management structure, it is time to conduct a deep and strategic analysis of your company. Make a diagnosis of how the company manages, maps, and remedies risks (of the most varied origins and types), what are the existing controls and how the current processes are managed and executed. 

Identify what are the current levels of security, effectiveness, and digitalization of each of these aspects. With this study, you will be able to point out the gaps in the implementation of GRC, as well as the order of priority of the risks found. 

3. Automation and quick wins 

After understanding your company’s current compliance and risk situation, it’s time to stipulate the basis of GRC and seek quick and easy gains. Define critical risk/compliance controls, create the essential reports to track the operation, and map out high-impact processes. 

With this map of what is most urgent and important, automate controls and thus reduce exposure to risks and failures. This helps strengthen GRC’s value delivery early on. 

4. Technological integration and adoption of GRC system 

But to ensure that these automations really deliver the expected benefits, it is important to have ways to manage them. In addition, it is essential to ensure that the operation of GRC measures is connected to each other and to other areas of the company. 

To do this, use a GRC system that operates in an integrated way with other tools — or that belongs to an all-in-one solution. This type of tool makes the use of GRC scalable and with the ability to automate on several fronts. 

5. Data governance 

Ensuring that data is accessible, reliable, and managed correctly is the next step in implementing a GRC. To do this, involve areas such as IT, Legal, and Compliance, and, together, map all sources of information and which ones are useful, who should access them, and how this will be done. 

This way, you can have secure, quality data from single sources and with visibility in all relevant areas. Thus, it is possible to make more informed decisions, perform internal audits accurately, and strengthen compliance and quality management in the operation. 

6. Continuous improvement cycle 

Finally, keep in mind that this process aims to implement GRC, but the improvement of it must continue. Stipulate continuous improvement practices to review and then improve GRC measures. 

To do this, monitor performance indicators such as; 

• time to remediate non-conformities; 

• number of critical incidents; 

• the cost of each non-compliance (whether time and/or money); 

• audit results. 

Consolidate all lessons learned and the results of these indicators to evaluate the overall performance of GRC and thus find points for improvement. Also, remember to report this data to the members of the governance board and other areas/people relevant to the project. 

Learn more: How to implement compliant software via delivery 

How to choose a GRC tool 

As you have already seen, technology can be a great ally in GRC strategies. A GRC tool can integrate data with ERPs, IAM, SIEM, and supplier processes, facilitate audits, and generate reports, among other advantages.

But for that, you first need to know how to choose the ideal solution. The market has several GRC applications, so finding the right one for your company can be a challenge. To solve this dilemma, we have prepared some of the most important features that GRC software needs to have. 

Integrated risk management 

With integrated risk management, you connect strategic, operational, financial, regulatory, technological, and third-party risk directly to your company’s business objectives. The main features that this integration ensures are: 

• Single risk register with attributes. Thus, it is possible to define owner, process, unit, probability, impact, category, associated controls, and evidence for the various types of risks. 

• Heat maps and dashboards that categorize risks by aggregation level (such as business unit, region, risk type). 

Workflows and automations 

Workflows and their associated automations transform what were once manual activities — such as evidence gathering, approvals, and remediation — into fast, traceable processes. This reduces incident response time and reduces the operational cost of managing risks and non-conformities. To do this, look for features such as: 

• Visual workflow models to create flows intuitively. 

• Routing rules and SLA definition with deadlines and automatic scaling. 

• Automatic notifications and alerts when there are pending actions and/or critical risks. 

• Automatic actions, such as assigning an action plan, creating a ticket in ITSM, or requesting evidence. 

• Templates for auditing and incident response, with automatic completion of fields with risk data or the help of Artificial Intelligence (AI) for completion. 

• Workflow execution logs with their respective status and assignees. 

Real-time indicators 

Prioritize GRC tools that provide real-time performance indicators. This provides continuous visibility of the company’s exposure to risk, which makes it easier to make faster and better decisions. These indicators can have features such as: 

• Executive dashboards with a consolidated view and the possibility of viewing details by risk, process, unit, etc. 

• Customizable KPIs, such as time to remediation of non-compliance, percentage of automated controls, residual exposure, among others. 

• Alerts are based on triggers such as the number of incidents and risk exposure rate. 

Evidence and audit trails 

Evidence and audit trails ensure that controls are effective and that the organization can efficiently prove compliance in the case of audits. This reduces regulatory effort and, consequently, exposure to sanctions and fines. To do this, have resources such as: 

• Secure storage of evidence, such as documents, logs, and reports, with their respective metadata. 

• Versioning of evidence through audit trails and hashes for integrity. 

• Relationship between evidence, controls, risks and internal policies. 

• Structured export to audits and regulatory bodies. 

Integrations with ERP, ITSM, and ECM 

These integrations reduce the manual effort of consolidation and governance. They also increase data fidelity and allow GRC to be the single source for risk and compliance decisions within the enterprise. Seek to integrate tools such as: 

• ERP to have data on financial controls, transactions and authorizations. 

• ITSM, which allows you to transform action plans into operational tickets, with incident tracking and SLA. 

• ECM to perform the linking of policies, contracts, and evidence that are present in documents. 

• APIs and middleware (ETL): For integration with legacy sources, data lakes, and analytics tools. 

Conclusion 

Understanding what GRC is critical for organizations that want to protect value, scale with integrity, and make data-driven strategic decisions. Governance, Risk and Compliance measures represent much more than compliance. They form a core mechanism of competitiveness and sustainability, especially in regulated sectors. 

Companies that bet on this methodology transform risk and compliance into strategic decisions and competitive advantage. Therefore, leaders must prioritize executive accountability, the diagnosis of maturity, and the implementation of critical controls supported by technology to maximize the benefits of GRC. 

Looking for more efficiency and compliance in your operations? Our experts can help identify the best strategies for your company with SoftExpert solutions. Contact us today!

FAQ – Governance, Risk and Compliance (GRC)