Understanding Enterprise Governance Risk and Compliance
Enterprise governance risk and compliance is — or should — be a major concern for organizations in all business sectors. Forbes called the 2021 jump in cybercrime “alarming,” with data breaches surpassing the prior year’s figure by October 2021. Meanwhile, The Insurance Journal reported that cybercriminals took in over $1.3 billion in “ransoms,” with 2021’s figure surpassing the 2020 figure by over $90 million — a number that’s expected to rise as more data becomes available.
Many have blamed the jump in cybercrime on the COVID-19 pandemic since the events have driven more business operations and economic activities into the cyber realm. The pandemic also impacted jobs worldwide, prompting many to find more “creative” ways of turning a profit.
These factors have prompted companies to place greater focus on enterprise governance risk and compliance. Governance Risk and Compliance (GRC) is a multi-faceted topic that holds the potential to impact a company’s IT infrastructure in significant ways.
Enterprise Compliance and IT Infrastructure
Regulatory compliance is a major issue facing companies of all types and sizes, from small startups to Fortune 100 enterprises. For example, the investing, banking and financial sector faces regulations from the government and independent regulatory organizations. Meanwhile, the healthcare and insurance industries are subject to HIPAA privacy regulations, among others.
Enterprise compliance regulations affect IT operations in many ways, including:
- What data is retained and for how long;
- How data is protected, encrypted, and secured;
- How written communications and messages are transmitted;
- What information is accessed and by whom;
- How data modifications are documented and tracked;
- How IT professionals audit data and generate corresponding reports;
- What level of encryption and security is used to protect data; and
- How data is stored (i.e. digitally in the cloud, in paper documents, etc.)
Enterprise governance risk and compliance plans must address all of these issues and any others that may be unique to a given business niche.
Failure to comply with enterprise data compliance regulations can result in tremendous fines. For instance, JPMorgan agreed to pay $200 million in fines after the company reportedly allowed its employees to use WhatsApp to communicate with clients. The use of the messaging mobile app resulted in an inability to document conversations with clients, violating the requirements that were set in place by U.S. banking regulators at the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission.
Cyber Security and Enterprise Governance Risk and Compliance Frameworks
Beyond affecting communications and data storage/handling, enterprise governance risk and compliance extends into the world of cyber security too. Savvy enterprises are integrating governance risk and compliance-related features and risk assessment tools into their ERP platforms, CRMs and other IT infrastructure components. These features and functionalities can include:
- IT auditing tools;
- Encryption and data-related controls;
- Risk assessment tools;
- Reporting tools; and
- Security tools and monitoring.
Many enterprises opt to augment their IT infrastructure to include frameworks such as those developed by the U.S. National Institute of Standards and Technology (NIST) and the International Organization for Standardization (ISO). Designed for enterprises and larger, government organizations, NIST 800-53 is a security control platform that facilitates the integration of measures that comply with stringent federal requirements.
The less-technical and risk-focused ISO 27001 framework is designed for a broader range of business ventures, both large and small.
Larger enterprises may even develop their own enterprise governance risk and compliance tools, particularly in cases where they have already developed a bespoke ERP platform. A customized GRC toolset can be a more efficient and cost-effective solution in cases where a company has unique needs and/or a highly customized ERP software interface.
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Implementing Enterprise Governance Risk and Compliance Tools
Whatever solution company leaders choose, integration and implementation are complex processes that require guidance from experienced GRC consultants and developers. The process usually includes the following:
- Evaluation and Consultation – An experienced enterprise governance risk and compliance expert will sit down with company leaders and experts within the company’s various divisions to achieve an understanding of the risks and regulatory and compliance issues. What regulatory bodies govern the industry? What rules and regulations does the company need to follow? What is the best technology to help reduce risk and maintain regulatory compliance?
- Planning – Based on the results of the evaluation and consultation process, the enterprise GRC consultants will guide the creation of a plan for the development of governance risk and compliance tools to suit the company’s unique needs.
- Development – The best GRC toolsets are developed to meet the exact and unique needs of a business. In some cases, a stand-alone platform may be the ideal solution. In other instances, GRC tools may be integrated as part of a larger ERP platform, CRM, or other enterprise software interface. Whatever the case, a GRC tool set’s scope is typically detailed in a comprehensive software requirements document that’s used to guide the development process.
- Implementation and Deployment – A well-developed piece of technology will fall short of delivering maximum ROI if you don’t address implementation and deployment. The best enterprise governance risk and compliance experts will take the time to understand a company’s current operations, how the GRC tools will be utilized and what process changes will be required to make the deployment a success. Then, they can create a plan to address technical implementation, staff training, and post-deployment support among other processes.
In today’s rapidly evolving business world, enterprise governance risk and compliance is more important than ever before. Using technology to maintain regulatory compliance and reduce risk adds an element of stability to an uncertain environment. Plus, the ROI can be dramatic when you consider that a single fine from a regulatory body or cyberattack “ransom” can total millions of dollars.
At iTech, we understand the tremendous risks facing today’s enterprises, positioning us to provide comprehensive governance risk and compliance solutions to clients in all business sectors. Contact us today to learn more about how iTech can provide the tools you need to maintain full compliance while simultaneously protecting from today’s high-risk cyber threats.