GRC vs. IRM: Elements and 3 Key Differences
What is Governance, Risk Management and Compliance (GRC)?
Governance, Risk, and Compliance (GRC) is an organizational strategy that creates one organizational function handling governance, corporate risk management, and compliance with regulations and industry standards. GRC has also come to refer to an integrated suite of software functions used to implement and manage corporate GRC programs.
GRC’s set of practices and processes provide a structured approach to aligning IT with business goals. GRC can help businesses effectively manage IT and security risks, reduce costs and meet compliance requirements. It also provides valuable information about risk in your organization and the methods used to address it, improving business performance.
Related content: Read our guide to GRC tools
What is Integrated Risk Management (IRM)?
Integrated risk management is strongly focused on the “risk” component of GRC. It is an approach that encourages consideration of risk by all parts of the organization.
IRM improves decision-making and performance by enabling an organization to manage its risks and gain a comprehensive understanding of how those risks impact business processes.
IRM is an important part of modern governance best practices. It is a set of practices, processes, and technologies that can improve decision-making and business performance by promoting a culture of risk awareness.
Elements of GRC and IRM
The three components of GRC are defined as follows:
- Governance defines how the organization is managed in accordance with approved policies and strategies.
- Risk management defines how an organization identifies risk, classifies and prioritizes risk, and carries out strategies to control risks to its operations.
- Compliance defines how an organization adheres to industry standards, government regulations, and voluntary best practices.
Traditionally, different parts of the organization performed each of these activities. In the GRC approach, the three still exist as distinct components, but they interact and work together to support business processes more effectively.
The main goal of Integrated Risk Management (IRM) is to enable and support a culture of risk awareness. It provides a comprehensive view of how organizations manage their risks to improve decision-making and performance.
Gartner defines IRM using the following principles:
- Strategy—provides a framework for governance and risk ownership that aims to improve business performance.
- Assessment—enables risk identification, assessment and prioritization.
- Response—specifies implementation of risk mitigation mechanisms.
- Communication—provides the most effective way to capture risk response and inform stakeholders.
- Monitoring—provides processes for systematically tracking risks based on governance objectives, risk ownership, responsibility, and compliance requirements.
- Technology—provides a concrete architecture for implementing an IRM Solution.
What are the Benefits of a GRC Platform
GRC management tools solve regulatory challenges while reducing the need for manual data entry. These tools can track obligations, mark compliance gaps, and automate tasks supported by flexible workflows. These features help improve team productivity and eliminate human error.
Easy Onboarding and Integration
Difficult recruitment processes and complex implementations are common concerns for large organizations adopting GRC tools. Modern GRC management tools eliminate silos, providing users with a unified interface for managing compliance data, improving productivity.
Real-Time Reporting and Monitoring
With a modern GRC platform, you do not need to wait for teams to run reports, analyze data, and provide insights. These platforms provide instant visibility into operations and compliance status. They typically include live dashboards and automated reporting capabilities, supported by automation and integration with existing datasets.
GRC management tools provide a customizable way to identify, measure, and remediate risk across the enterprise while complying with internal and external regulations. The software solution allows users to input analytical grids, custom fields, and custom views to manage and gain control over their datasets.
What are the Benefits of IRM Platforms?
Bringing Multiple Teams Together
IRM strives to bring multiple teams together. Individuals on different teams often have different priorities, different values, and sometimes completely different cultures; this is especially true if you include third-party vendors. When IRM becomes a central priority, all teams jointly understand and consistently implement risk management practices.
Automation of Vulnerability Detection and Mitigation
IRM platforms integrate with tools that quickly triage potential vulnerabilities, identify threats based on triggers, and respond immediately to issues. Automated response can save time for security teams and provide visibility into security controls for compliance and management teams.
Top-Down Awareness of Risk Management
Organizations typically plan their IRM strategy from top to bottom. CEOs and other senior decision-makers are driving culture and infrastructure change. Top-down cultural changes are often easier to manage and last longer. IRM platforms support a top-down approach by providing dashboards and visualizations that all stakeholders can understand – from the CEO to compliance and operational teams.
3 Key Differences Between GRC and IRM
Architecture and Design
In a GRC program, the primary concern is regulatory compliance. The GRC team is keen to handle this daunting task because it is a prime concern for the executive team. Therefore, GRC plans are designed as closed systems isolated from the rest of the organization and managed by the GRC technology implementation team.
An IRM strategy integrates into the organizational structure. It is open, accessible, and tailored to the departmental activities of the entire organization. IRM allows you to engage all stakeholders who can influence your organization’s risks and focus on managing those risks. IRM is also aligned with strategic business objectives, making it primarily business-oriented rather than technology-oriented.
Content and Use
In traditional GRC-centric organizations, risk management focuses on compliance activities. Therefore GRC tools and strategies are only really used by teams specializing in compliance. Those teams are responsible for managing compliance for the rest of the organization.
In organizations practicing IRM, IRM tools and strategies are designed for use with cross-functional teams, including employees who do not specialize in compliance and even third-party partners and vendors. This broad involvement in risk management is critical to effectiveness.
Features and Functions
GRC tools and strategies are expanded by the organization as needed. As regulators or industry bodies introduce new requirements, GRC specialists deploy new tools or strategies to ensure compliance. GRC tools and practices operate in a separate, isolated environment.
IRM tools and strategies fully integrate with existing business processes. They are exposed to a broad range of non-expert users, making it difficult to deploy additional tools. IRM relies on a single, integrated, comprehensive platform to manage all organizational risk concerns. This integrated approach makes risk management a manageable, structured task that stakeholders across the organization can engage and monitor.
GRC and IRM with Pathlock
GRC and IRM are a hassle, with seemingly endless amounts of manual work piling up by the day. Organizations typically have 200+ key internal controls to prove each type of compliance, and each control takes 40 or more hours to test. Furthermore, testing on these controls may only be done once a year. This is an error-prone process that only looks at 3-5% of the activity in a given enterprise.
Pathlock shifts organizations towards a continuous compliance approach, which proactively monitors controls and reports on violations of those controls in real-time. Organizations can have complete visibility to their risk and compliance status at all times, so they are always prepared for the next audit.
Pathlock radiates GRC and IRM information to the most critical tools in your landscape for real-time status on your key controls. Pathlock integrates with ServiceNow, MetricStream, Archer, SailPoint, Okta, SAP GRC, and more.
Pathlock’s catalog of over 500+ rules, Pathlock can provide out-of-the-box coverage for controls related to SOX, GDPR, CCPA, HIPAA, NIST, and other leading compliance frameworks.
Real-time Risk Mitigation
Pathlock allows users to quickly investigate and respond to potential risky transactions by reviewing access, de-provisioning users, forcing 2FA, or even allowing Pathlock to respond intelligently in real-time, terminating suspicious sessions and blocking transactions in real-time
Pathlock’s out-of-the-box integrations have your key business applications covered. Monitor and enforce controls across SAP, Oracle, Salesforce, Workday, NetSuite, Dynamics365, and more.
Lateral SOD Correlation
All entitlements and roles are correlated with a user’s transactional behavior, consolidating activities and showing cross-application SOD’s between financially relevant applications
Continuous Control Monitoring
Pathlock identifies the largest risks by monitoring 100% of financial transactions from applications like SAP in real-time, surfacing violations for remediation and investigation
Interested to find out more about how Pathlock is changing the future of GRC and IRM? Request a demo to explore the leading solution for enforcing compliance and reducing risk.