Governance describes the activities that ensure business is done according to established standards and goals; however, risk involves strategically creating value and protecting value, said SAP.
According to Salman Akorede, GRC Presales Consultant, SAP West Africa Region, compliance refers to the controls in place to ensure compliance with laws, regulations and directives affecting businesses.
Speaking on why effective GRC a challenge for so many businesses, he said, organizations are confronted with an increasing need to respond to their stakeholders – government and regulatory agencies, and react to changes in their internal operational environments – mergers and acquisitions, processes, business relationships, strategy, information technology, financial reporting requirements and employees.
He added that changes in their external environments – economic uncertainties, geo-political, environmental, societal, industry and market forces, are part of the issues.
Akorede said, “This is an extremely complex environment and all these changes translate into risks and the critical need to make appropriate responses, with changes to business policies and procedures in a timely and accurate manner by using current and reliable information.
“In Nigeria, as well as elsewhere in the world, governmental regulations and compliances are only increasing. Everyday there are more organizational and industry risks that have to be managed together with other operational risks. These governance, risks and compliance challenges are often managed at department, operational, functional or role levels rather than through an integrated and coordinated approach as offered by a GRC technology solution.
“Managing risk and compliance in silos as described above is complex, confusing and costly. For each new regulation or risk discipline, organizations typically implement a new technology point-solution. This fragmented approach clearly limits an organization’s ability to streamline risk and compliance processes and reduce costs. It also obscures the opportunity to integrate risk and compliance to gain a holistic view of the organization’s risk landscape”.
He hinted that this is a problem for organizations, because fractional, disintegrated and disconnected functional business activities, information and data are spread across many people and systems.
Organizational practices across the enterprise will therefore be inconsistent. Without an integrated solution, organizational practices may also not be in alignment with set missions, goals and objectives.
He added that, in response to the challenge of managing the multitude of risks, forward thinking organizations are embracing integrated Governance, Risks and Compliance (GRC) technology initiatives to prevent unplanned financial losses and erosion of shareholders’ wealth.
“By contrast, some organizations still have a siloed view when it comes to these solutions and view GRC initiatives as reactive and isolated quick-fixes. These organizations are not necessarily aware that implementing disconnected applications for selected processes, departments and systems only adds to fragmented and incomplete GRC management and reporting.
“By following a unified approach to governance, risk and compliance using integrated technology, organizations can quickly maximize strategic and operational performance, cost-effectively manage regulations and policies and proactively mitigate business risks.
“SAP solutions for GRC help companies to proactively balance risk and opportunity, including access control, process control, risk management, audit management, fraud management and global trade services in an integrated manner on a single harmonized IT platform”.
Ultimately, SAP’s goal is to enable organizations of all sizes to pinpoint all relevant risks and potential compliance issues to enable them to make optimal decisions in light of both the opportunity ahead and the related risks.