Minimizing Risk and Maximizing Compliance with RSM

Improving Governance, Risk, and Compliance (GRC) capabilities is of paramount importance for the success and sustainability of modern organizations. Effective introduction, implementation, and embedding of risk management systems within an organization’s strategic and operational decision-making processes are essential.

Organizations today face an evolving business landscape with numerous challenges, making strong GRC models critical for avoiding risks, achieving business objectives, and creating value.

One of the core reasons to improve GRC capabilities is the need for alignment with business strategy. These models must not operate in isolation but rather be integrated with the overall business strategy to enable its success.

Internal Assessments

Many SAP organizations are turning to partners like RSM to help them assess their own operations and controls to help determine their risk appetite and maturity, introduce a risk management framework, and understand the challenges they face. This understanding allows for the preparation of a risk management strategy that covers people, information systems, and internal control procedures.

Furthermore, enhancing GRC capabilities directly impacts an organization’s ability to identify, evaluate, and manage risks effectively. Organizations are increasingly expected to demonstrate that they have evaluated their exposure to risks and have implemented appropriate controls to prevent negative scenarios.

RSM can work with organizations to identify the risks they face and evaluate potential threats. This includes a wide range of risks, such as those related to new digital technologies triggering new regulatory requirements, and unanticipated challenges arising from transformational events like mergers and acquisitions.

Improving GRC also strengthens an organization’s regulatory and compliance posture. The rapid evolution of complex regulatory requirements is a constant challenge. By improving GRC capabilities, organizations can better prepare for, comply with, and forecast long-term regulatory compliance and anti-money laundering (AML) regulations.

This is particularly crucial for highly regulated operations. Moreover, improved GRC can address both domestic and global requirements, including anti-corruption compliance, trade sanctions, export controls, and industry-specific regulations.

Overcoming Threats

Beyond compliance, enhanced GRC capabilities are vital for protecting the organization from various threats. This includes developing and implementing effective risk management strategies to meet regulatory and standards compliance objectives, which often overlap with cybersecurity efforts.

Improved GRC can also safeguard against potential risks brought by third-party vendors through better understanding and management of these relationships. Services such as fraud prevention and investigation, and anti-money laundering (AML) services fall under the umbrella of risk advisory, highlighting the importance of GRC in these areas.

Moreover, investing in GRC improvements can lead to increased efficiency and potential cost reduction. For instance, implementing a new enterprise resource planning (ERP) system, which can be challenging, benefits from improved GRC capabilities to assess and mitigate technology, process, and risks to realize the system’s full potential.

Smart automation within risk management processes can remove tedious tasks, allowing teams to focus on higher-value projects and improve operational value. Even processes like Sarbanes-Oxley (SOX) compliance can become more sustainable, reducing the time spent on preparation and mitigating the risk of errors.

What This Means for SAPinsiders

Set up a strong GRC framework. Companies must foster a culture of risk awareness throughout the organization. For a risk management strategy to be truly successful, the philosophy must be embedded at all levels. Board members and senior management must understand and support risk management.

Training is a pillar of GRC success. As risk management responsibilities are devolved, training becomes imperative to ensure everyone involved understands their role and expectations. By improving GRC capabilities, organizations can cultivate a deeper knowledge and understanding of risks, which enhances strategic decision-making and can even create new opportunities. Companies can reach out to partners like RSM to help them set up training to ensure all team members are on the same page.

GRC cannot be overlooked. Improving GRC capabilities is not merely a matter of ticking boxes for compliance. It is a fundamental necessity for navigating the complexities of the modern business environment. By aligning with strategy, managing risks, ensuring compliance, protecting against threats, enhancing efficiency, and fostering a risk-aware culture, organizations can significantly improve their overall performance and achieve sustainable success. Collaborating with experienced GRC partners can provide the necessary guidance to achieve these vital improvements.