Monday, May 17, 2021

Raise Concerns to Enhance GRC

Governance controlling and enforcement takes a new meaning such as agility, intelligence, and creativity in the dynamic era of digitalization.

Every business is different with its own set of issues, problems and concerns regarding its strategic and inherent risks. There's a clear connection between bad governance and poor performance, good governance practices can improve business maturity, and high mature businesses usually have much better performance and longer lifespan than average businesses.

 However, in today’s business dynamic, governance shouldn’t add a heavy layer of control and enforcement which causes discomfort or even bureaucracy. What is the "spirit" in today's governance body? What are the perspectives for the future of governance? What’re thought-provoking questions to enhance GRC disciplines?

How to define more global universal business cases? A business case provides the description and reason for starting an initiative to solve certain problems. Thus, for solving large scale, complex problems, defining a more global universal business case is crucial for uncovering a problem, defining the scope, and making an objective business requirements assessment. From a business portfolio management perspective, the project/program scope is typically always the area where there can be many issues with interpretation, decomposition, assumptions, and lack of continuity and understanding between the stakeholders. Business leaders should listen to a wide range of feedback from business users, question the business’s requirements and justifications of business initiatives, offer customers a set of choices, and take the premium solution to solve their problems.

From the point of the business strategy changes, all tasks/requirements should be assessed and ranked in different dimensions. Most commonly, the narratives within strategic business cases reflect multifaceted business value pathways, responding to mandates by external parties; making business requirement assessments with outline points such as the customer expectations and gaining a competitive advantage; upgrading existing technologies; making business process improvements; generating options for provisioning future business capabilities. Developing a compelling strategic business case is especially critical when an initiative is difficult to monetize. That is, attaching believable dollar values to identified benefits flows.

How to revitalize the regulation change, GRC enforcement into processes? Process is important as "glue" which coordinates other ingredients to produce a particular business result. Sound GRC enforcement disciplines are to improve process management effectiveness and eliminate risks. There should be a governance mechanism embedded in all crucial business processes, and there are governance practices to enforce accountability at every level of the organization. And there are varying governance activities such as delegation of authority, auditing, or strategy monitoring, etc to improve business effectiveness and efficiency. The flavor of GRC practices depends on the nature of the business and the level of the organizational maturity. If your organizations are highly regulated, then GRC would focus on compliance and audit foremost. If you are less regulated, you can use the GRC to facilitate discussion of common risks and issues across the enterprise and avoid duplicating efforts for risk remediation.

It’s important to focus on proactive planning and process optimization. strong business process governance has a better chance to deliver better performance results. In many organizations, much of GRC management is reactive in the sense that there is a lot of rushing around trying to fix problems instead of preventing risks. Although the governance structure is independent of the management structure, the governance process/mechanism can be embedded into the business process seamlessly. Corporate governance has a direct link to each business and its processes. Not only from the financial results, but also from the involvement and signs being displayed about what guidance, values, and principles governing the company's commercial activities. By enforcing GRC principles and practices, the process effectiveness and efficiency achieved through standardization and optimization directly impact strategy management success.

How to optimize the process design via enforcing GRC with advanced analytics capabilities:
The smart process needs to have dynamic aspects to it. It is rigorous; it can handle ad-hoc and exceptional matters smoothly and it ‘knows’ enough to be able to handle failures effectively. One of the important aspects when designing a process for GRC management is to perform a risk analysis, to avoid or minimize risks. GRC related analysis traces through the manner by which the organization’s business processes are ‘touched’ by business initiatives. Generally, this occurs by initiatives impacting the transaction handling, decision making, and coordination associated with affected business processes. For example, some organizations apply the technique called touch point analysis to identify and trace through the manner by which an initiative impacts an organization’s bottom line.

It makes sense to have governance processes that are more information-based, lightweight, continuous, and that focus more on results and adapt to changes rather than static plans. Data based insight also helps the business optimize crucial processes, predict or detect fraud or bad behavior, break down functional silos to manage data more holistically, to enforce GRC discipline with advanced analytics capabilities.

Governance controlling and enforcement takes a new meaning such as agility, intelligence, and creativity in the dynamic era of digitalization. High mature organizations provide views, methods, and rules that address the different aspects of governance. enforce their governance, risk management and compliance disciplines to both capture growth opportunities and manage risks intelligently.


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