The acronym eGRC is becoming increasingly prevalent ' but what does it mean? How does eGRC differ from the more familiar GRC; what do you need to know about it, and how should your organization adopt eGRC strategies?
What is eGRC?
GRC (governance, risk and compliance) is a well-recognized term; eGRC is less so. In a corporate landscape dominated by the need for risk mitigation, it's not surprising that strategies designed to bolster organizations' governance, risk and compliance are proliferating.
- GRC refers to the way organizations structure their governance, risk management and regulatory compliance. A GRC strategy aims to bring cohesion and consistency to a business's governance, risk and compliance policies, which historically were all too often fractured and disjointed.
- eGRC is a subtly different concept. The difference is in the 'e' and the meaning behind its use. The 'e' in eGRC (sometimes styled 'EGRC') stands for 'enterprise,' and the distinction is between governance, risk and compliance strategies that might be siloed or business-stream specific and strategies that span the business.
Governance, Risk and Compliance ' A Minefield of Acronyms
One of the challenges when understanding the requirements relating to GRC or eGRC, and devising a strategy to respond, is the many terms used to describe similar concepts.
GRC and eGRC we have defined above. Then you may also hear:
- ERM: Enterprise risk management. ERM refers to business-wide risk management strategies that cover the entire organization. ERM infers a holistic, enterprise-wide approach to risk identification and mitigation, rather than one that focuses on specific threats or risks. You can read more about the difference between ERM and GRC in our recent blog on the subject.
- IRM: Integrated risk management. Similarly, IRM is defined by its overarching approach to risk. IRM is often focused around technology, a strategy that enables company-wide visibility of governance processes via automation and technology integration (and again, IRM is distinct from GRC ' read more on those differences here.)
- ESG: Environmental, social and governance concerns. These are an increasing focus of organizations' risk management practices due to a growth in public awareness and scrutiny, increasing investor activism and an escalation in requirements relating to reporting and regulations.
- CSR: Corporate social responsibility. Although the term is increasingly being usurped by ESG, CSR remains part of the lexicon for any business wanting to understand, measure and improve its impact on the environment and wider world.
Why Is eGRC Important?
Both GRC and eGRC enable organizations to take a strategic, methodical approach to managing risk based on data aggregated across the business. A cohesive risk management strategy, monitored via robust governance protocols, will improve compliance with internal and externally mandated requirements.
The benefit of the 'e' in eGRC is the enterprise-wide nature of the strategy. In theory, all good governance, risk and compliance strategies should encompass all the business's operations. Yet, unless you follow best practices in GRC, approaches can be piecemeal and fragmented.
This can lead to inconsistency in measurement and a lack of actionable data. Without a structured, pan-organizational risk management framework, an organization's GRC strategy, as CFO magazine points out, 'remains fragmented and provides poor visibility of risks.'
This incomplete picture of risk potentially leaves you open to difficulty in providing the board and senior leaders with an aggregated view of your risk profile, a lack of accountability, and an inability to translate risk performance into actions for improvement.
Create enterprise-wide risk management, governance and compliance policies underpinned by a robust, flexible GRC platform. However, an organization can build consistent and well-understood workflows to follow protocol and identify variances that indicate problems.
Taking an organization-wide approach makes GRC data reliable, reducing the risk of reporting errors and non-compliance. Strategic decision-making is based on accurate information and a 'big picture' risk vision. Your ability to report and tackle risk is enhanced.
How to Integrate GRC Across the Enterprise
True eGRC requires an approach that is consistent ' and consistently robust ' enterprise-wide. Traditional siloed programs can hinder this; you may need to unpick previous protocols and start afresh to build a genuine eGRC strategy.
Understanding enterprise-wide GRC best practice is vital here; external partners can help deliver invaluable eGRC knowledge and capabilities to support your efforts. This brings structure and discipline, increasing consistency and reliability in your processes and measurement. Putting in place watertight processes enables you to use real-time data and forecasting to act on the latest picture of risk performance.
Why Do You Need eGRC Software?
Software with eGRC capabilities allows you to standardize procedures, model scenarios and prepare for future threats. Your internal controls can be developed in line with external obligations, and workflows can be designed to ensure accountability, efficiency and compliance.
How GRC Software Can Support Your eGRC Strategy
As with many challenges, technology can help with eGRC. Most critically, the software must be able to apply the principles of eGRC ' a genuinely enterprise-wide approach to governance, risk and compliance ' which will significantly enhance your ability to deliver accountability, efficiency and compliance. A flexible, scalable GRC platform will give credence to these eGRC capabilities ' but software without expertise will not deliver the results you need.
The Significance of the 'E' in eGRC: Why Integrating GRC Across the Enterprise Is Paramount
This expertise ' the ability to apply eGRC thinking to your GRC strategies ' is the real key for organizations looking to bring structure to their governance, risk and compliance efforts. A comprehensive and cohesive approach provides assurance that you have covered all aspects, that your tactics are working and that your GRC reporting is reliable, based on robust data.
Making your strategy truly enterprise-wide ' integrating and embedding GRC throughout your entire enterprise ' elevates it to eGRC, which will enable you to achieve tangible benefits from your endeavors.
Further Reading on eGRC and GRC
You can read more about best practices in governance, risk and compliance in our free Guide, The Future of GRC, which highlights best practices in creating and acting on a holistic view of GRC.
You may also find it helpful to sign up for our GRC Newsletter; it summarizes the latest insights for successful enterprise governance risk and compliance programs, ensuring you're up to speed on the newest developments. You can sign up for the newsletter here.