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2017 GRC Market Drivers, Trends, Personas & Profiles

January 2017Michael Rasmussen, J.D., GRCP, CCEP

GRC Economist & Pundit @ GRC 20/20 Research, LLCOCEG Fellow @ www.OCEG.orgLicensed Subscriber Use Only, Do Not Distribute

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Two Things to Note . . .

§ Organizations evaluating or considering GRC solutions are free to ask GRC 20/20 on our understanding and comparison of solutions in the market to meet your GRC requirements.

§ Inquiries are single focused questions that can be answered in under 30 minutes.

§ Complimentary inquiry is only available to organizations evaluating or considering GRC solutions for their internal use.

Complimentary Inquiry

§ GRC 20/20 has an extensive library of RFP requirements across a range of GRC capability areas presented in this presentation.

§ GRC 20/20 can be engaged in RFP development and support projects to streamline your process, gain perspectives learned from other organizations, and to keep solution providers honest in their responses.

RFP Development & Support



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1) GRC Market Definition, Overview & Segmentation

2) GRC Market Drivers & Trends

3) Personas

4) Technology Profiles

Our Objectives . . .




GRC is the integrated collection of capabilities that enable an organization to:

G) reliably achieve objectives R) while addressing uncertainty and C) acting with integrity.

SOURCE: OCEG GRC Capability Model

The Official Definition of GRC . . .



Realize that everything connects to everything else.Leonardo da Vinci



The Organization Has to be Able to See . . . q The Tree. The individual area of riskq The Forest. The interconnectedness of risk



Change is the Greatest Challenge Impacting GRC Management

contact Carole S. Switzer [email protected] for comments, reprints or licensing requests ©2012 OCEG visit www.oceg.org for other installments in the Anti-Corruption Illustrated Series

011100111001010100

External Risk ChangeMonitor change in the external risk environment to determine how uncertainty in economic, geo-political, environmental, industry, societal, and market forces affect current and needed policies.

MARKET FORCES

INDUSTRY

TECHNOLOGY

COMPETITIVEFORCESGEO-POLITICAL

SOCIETAL FORCES


$

Internal Risk/Business ChangeMonitor changes to the internal environment to identify how changes to strategy, mergers & acquisitions, processes, technology, business relation-ships, and employees affect current and needed policies.

MERGERS &ACQUISITIONS

STRATEGY

PROCESSES

IT

EMPLOYEES

FINANCIALPOSITION

BUSINESSRELATIONSHIPS


Regulatory/Legal ChangeMonitor change in the legal and regulatory environment to determine how pending legislation, court decisions, new/changing regulations, and enforcement actions affect current and needed policies.

COURT RULINGS

ENFORCEMENT

LEGISLATION

REGULATIONS

MONITOR



Inevitability of Failure: Too Many Approaches There are too many departments sending too many communications in different formats. GRC management is buried in documents, spreadsheets & emails.

Ø Wasted resources through redundancy & overlapØ Excessive emails, documents, and paper trailsØ Poor visibility & reportingØ Files and documents out of syncØ Overwhelming complexityØ Lack of accountability



Varying Levels of GRC Management

Top-down federated GRC management strategy across the entire organization.Enterprise

Division or business unit management strategy

Management being done at a department, function, or process level

DepartmentFunctionProcess

Managed in context of a specific focus, regulation, or issues

RiskRegulation

Issue

Division Business Unit



What is Your Approach to GRC Management?

§ An integrated approach that balances GRC management centralization with distributed participation and collaboration

Federated GRC Management

§ Disconnected departments managing GRC related activities in different ways with little or no collaboration with other departments

Distributed GRC Management



GRC Strategy Within Organizations

GRC Strategy

GRC Technology

GRC Information

GRC Process



360° GRC Contextual Analytics & Intelligence Capabilities

Integrated and mapped together to provide context

Analyzed to understand relationships

Action Items

Distributed & DisconnectedGRC Data PointsLicensed Subscriber Use Only, Do Not Distribute


GRC Information Architecture Provides 360° Contextual Intelligence

Strategic

Financial

Operational

Preventive

Corrective

Detective

Complaint

Investigation

Event

Strategic

Process

Department

Regulatory

Values

Contractual

Code of Conduct

Training & Awareness

Policies & Procedures

Owner

Employee

Subject Matter Expert

Controls

Risks

Issues

Roles

Objectives

Policies

Obligations

OrganizationEntity

Asset

Process

process optimizationAll non-value-added activities are eliminated and value-added activities are streamlined to reduce lag time and undesirable variation.

better capital allocationIdentifying areas where there are redundancies or inefficiencies allows financial and human capitalto be allocated more effectively.

higher quality informationIntegrating GRC information allows management to make more intelligent decisions, more rapidly.

.

protected reputationReputation is protected and enhanced because risks are managed more effectively.

improved effectivenessOverall effectiveness is improved as gaps are closed, unnecessary redundancy is reduced, and GRC activities are allocated to the right individuals and departments.

reduced costsReduced costs help to improve return on investments made in GRC activities.



The GRC Market: Technology, Information,& Professional Services

843 technology solution providers that offer solutions related to GRC

GRC Technology Solutions

112 providers with 384 content/intelligence solutions across a range of GRC areas

GRC Intelligence & Content Solutions

1,000+ professional service firms offering services related to GRC

GRC Professional Services Solutions



GRC Technology Segment Description

Enterprise GRC Capability to manage an integrated architecture across multiple GRC areas in a structured strategy, process, information and technology architecture.

Audit Management Capability to manage audit planning, staff, documentation, execution/field work, findings, reporting, and analytics..

Automated Control Capability to automate the detection and enforcement of internal controls in business processes, systems, records, transactions, documents, and information.

Business Continuity Management Capability to manage, maintain, and test continuity and disaster plans, and implement these plans expected and unexpected disruptions to all areas of operation.

Compliance Management Capability to manage an overall compliance program, document and manage change to obligations, assess compliance, remediate non-compliance, and report.

Environmental Management Capability to document, monitor, assess, analyze, record, and report on environmental activities and compliance.

Health & Safety Management Capability to manage, document, monitor, assess, report, and address incidents related to the health and safety of the workforce and workplace,

Internal Control Management Capability to manage, define, document, map, monitor, test, assess, and report on internal controls of the organization.

IT GRC Management Capability to govern IT in context of business objectives and manage IT process, technology, and information risk and compliance.

Issue Reporting & Management Capability to notify on issues and incidents and manage, document, resolve, and report on the range of complaints, issues, incidents, events, investigations, and cases.

Legal Management Capability to manage, monitor, and report on the organization’s legal operations, processes, matters, risks, and activities.

Physical Security Management Capability to manage risk and losses to individuals and physical assets, facilities, inventory, and other property..

Policy & Training Management Capability to mange the development, approval, distribution, communication, forms, maintenance, and records of policies, procedures and related awareness activities.

Quality Management Capability to manage, assess, record, benchmark, and track activity, issues, failures, recalls, and improvement related to product and service quality.

Risk Management Capability to identify, assess, measure, treat, manage, monitor, and report on risks to objectives, divisions, departments, processes, assets, and projects.

Strategy & Performance Management Capability to govern, define, and manage strategic, financial, and operational objectives and related performance and risk activities.

Third Party Management Capability to govern, manage, and monitor the array of 3rd party relationships in the enterprise, particularly risk and compliance challenges these relationships bring.

GRC Technology Market Segment Definitions



GRC Intelligence Segment Description

Audit Content & Intelligence Content providers of audit templates, forms, and intelligence.

Business Continuity Content & Intelligence Content providers of business continuity templates, forms, and intelligence

Compliance Content & Intelligence Content providers of regulatory libraries, regulatory intelligence, compliance forms and templates.

Environmental Content & Intelligence Content providers of environmental intelligence, forms, and templates.

Health & Safety Content & Intelligence Content providers of health & safety libraries, content, forms, and templates.

Internal Control Content & Intelligence Content providers of internal control libraries, forms, and templates.

IT GRC Content & Intelligence Content providers of IT GRC/security control libraries, threat and vulnerability intelligence, forms, and templates.

Legal Content & Intelligence Content providers of legal databases, libraries, legislation tracking, forms, templates, and spend intelligence.

Policy & Training Content & Intelligence Content providers of policy libraries, training courses, and policy and training related content, forms, and templates.

Risk Management Content & Intelligence Content providers of risk intelligence feeds, risk libraries, loss data, risk forms, and templates.

Third Party Management Content & Intelligence Content providers of third party management intelligence, due diligence, watch lists, negative news, ratings, monitoring, forms, and templates

Issue Specific Content & Intelligence Content providers of content and intelligence related to specific issues, regulations, and risks (e.g., bribery/corruption, conflict minerals, labor)

Industry Specific Content & Intelligence Content providers of industry specific content and intelligence.

GRC Intelligence Market Segment Definitions



GRC Professional Services Segment Description

Audit Services Services focused on external audits as well as internal audit staffing and management.

Consulting Services Services focused on GRC related management and strategy consulting.

Legal Services Services focused on legal matters and advice related to GRC.

Outsourced Services Services that are outsourced such as specific GRC functions, monitoring, certification, etc.

Systems Integration Services Services focused on implementation, build out, and development of GRC related information and technology architecture and solutions.

GRC Professional Services Market Segment Definitions



Platforms

SolutionsTools

GRC Technology Market: Types of Technology

Platforms provide a breadth of capabilities that span solution areas in a segment enabling them to be a platform to manage a GRC segment extensively.

Platforms

Solutions are technologies that are more focused in what they do. They tend to solve specific problems and come at a segment from a narrower perspective. They can compliment a platform or run independently from it.

Solutions

ToolsTools are technologies that assist or enable a segment, but do not fit adequately in any of the definitions for platforms or solutions. Every GRC segment has a Miscellaneous Tools category to catch all the related technologies that assist and add value, but do not have enough market presence in a segment to get their own solution or platform identification.






3) Personas





GRC Technology Market: Enterprise GRC Platforms & Architecture

Enterprise GRC Platform & Architecture

Enterprise GRC Platforms

GRC Data Integration Solutions

GRC Analytics & Reporting Solutions

Enterprise GRC Platforms & Architecture technologiesdeliver a range of cross-department functionality across GRC functional areas into an integrated technology ecosystem. For some this is single GRC platform for the entire organization. For others it is an integrated architecture in which there can be a core platform but often extends and integrates into a range of other solutions and data sources.

To be an Enterprise GRC Platform requires a single platform architecture that has multi-department (e.g., enterprise wide) use across the following areas, at a minimum:

– Enterprise/Operational Risk Management, – Compliance Management– Internal Control Management– Issue Management (e.g., incident, case, investigations) – NOTE: most Enterprise GRC Platforms offer a range of

additional module beyond these.

Organization & Process Modeling Solutions

Miscellaneous GRC Platform & Architecture Tools



Four Critical Capabilities Areas that Define an Enterprise GRC Platform

Risk Management

Internal ControlManagement

Issue Reporting & Management

ComplianceManagement

Enterprise

GRCLicensed Subscriber Use Only, Do Not Distribute


AuditManagement

Business Continuity

Management

Compliance Management

Health & Safety Management

?IT

GRC

InternalControl

Management

IssueManagement

AutomatedControls

Policy Management

Quality Management

RiskManagement

Third Party Management

What Are the Critical Components of Your GRC Platform?

EnvironmentalManagement

LegalManagement

Physical Security

Management

Strategy & PerformanceManagement

???

????

100%of Enterprise GRC RFPs

1 to 49%of Enterprise GRC RFPs

50 to 99%of Enterprise GRC RFPs



Basic Enterprise GRC PlatformsBasic Enterprise GRC Platforms focus on the workflow, forms, and tasks of enterprise GRC. The value focus is on automation by getting rid of the inefficiencies of documents, spreadsheets, and emails and replacing this with a solution that can collect information, manage workflow and tasks, and simplify reporting.Value = tends to be the lower cost solutions to acquire, focus is more on the small to medium sized enterprise deployments

Basic Enterprise GRC Platforms

Capabilitiesü Core Enterprise GRC modules of risk, compliance, internal

control, & issue managementü Workflowü Task managementü Survey & assessmentü Forms managementü Reportingü Often has other modules, but capilities are limited to those

defined above

LimitationsØ Tends to have a flat view of risk in which the entire

enterprise is mapped into one risk model and assessment process

Ø Lacks risk normalization and aggregation capabilities

Ø Limited capabilities to integrate with other systemsØ Reporting is rigid and unflexibleØ Lacks depth in risk analytics and modeling capabilitiesØ Often difficult to adapt to your environment



Common Enterprise GRC PlatformsCommon Enterprise GRC Platforms have the range of features commonly found in Enterprise GRC RFPs. They build upon the foundation of workflow, tasks, surveys, and forms with features to provide greater integration with other systems, analytics, and reporting.

Common Enterprise GRC Platforms

Capabilitiesü Core Enterprise GRC modules of risk, compliance, internal

control, & issue management and a range of other GRC modules

ü Has workflow, task, survey, assessment, forms, and reporting capabiliteis of Basic solutions

ü Has capabilities for risk normalizaiton, aggregation, and supports more risk analysis methodologies

ü Integrates easily into broader IT environmentü Advanced reporting

LimitationsØ Often does not fit the needs of more advanced risk

management programsØ Solution offers some content feeds, but does not have a

strong array of content offerings across areas of GRC



What Differentiates Basic, Common & Advanced GRC Solutions?

Characteristics: Advanced Enterprise GRC PlatformsAdvanced Enterprise GRC Platforms are Common Platforms that have distinguished themselves from competitors by offering advanced capabilities in different areas.

Areas of Advanced Capabilities (note, a solution might have one or more of these):ü Enterprise Architecture & Business Process Modeling. Ability to visually layout business processes in a GRC context and

for GRC documentation.ü Risk Analytics & Modeling. Advanced risk analytics and modeling supporting a range of methodologies and quantificationü GRC Mobility. Mobile architecture capabilities that easily extends new GRC applications and interfaces to mobile devicesü GRC Content & Intelligence. An array of GRC content and intelligence offerings integrated as part of the platformü Easy to Configure & Extend. The solution is highly extensible and can be built out to support new GRC processes without

coding, and does not require a high degree of IT expertise. ü Risk Normalization & Aggregation. The solution supports advanced capabilities to normalize and aggregate risk across the

environmentü Robust Data Analytics & Reporting. The solution has a strong data warehouse architecture and can aggregate and report on

a range of GRC risk and reporting needs involving data gathering and analysis across disparate systems.Licensed Subscriber Use Only, Do Not Distribute


Driv

ers

Drivers & Trends: GRC

Exponential growth in regulatory, risk and business change is making scattered GRC processes and information constantly behind and exposing the organization.

1Constant Change

The growing array of 3rd party relationships with increased regulatory and risk exposure is bearing down on organizations to include in GRC strategies.

2Growing Relationships

Many organizations still find they are encumbered by silos of information that is disconnected, and often have several disconnected GRC platforms in different areas.

3Scattered Information& Platforms

Those that have implemented a GRC platform in the past decade are often finding that the solution is out of date and cumbersome to use when compared to the new generation of solutions.

4Growing Beyond Initial GRC Platforms

There is growing demand and need for the integration of external content and intelligence feeds into the GRC architecture.

5Need for External GRC Content

Tren

ds No platform does everything. Organizations are looking toward an information and technology architecture that integrates GRC, though there often is one central core platform.

1GRC Architecture

Enterprise GRC Platforms are no longer self-contained solutions to manage GRC workflow and tasks, they require strong integration capabilities into a range of business systems.

2

Integration

In a GRC architecture approach, organizations are looking toward a common hub and core for Enterprise GRC but allow for best of breed solutions where they make sense.

3Best of Breed Where it Makes Sense

There is growing demand in RFPs for GRC solutions to have business process modeling capabilities to visually layout and document how business processes function in a GRC context.

4Business Process Modeling

Enterprise GRC is no longer for the back-office, but needs to be intuitive and easy to use for the front-office. New releases are showing improved user interface and mobility options.

5GRC Mobility & Engagement



34%C o m p l i a n c e

28%R i s k M a n a g e m e n t

11%I T

5%O t h e r

GRC 20/20 Inquiries by Role

16%A u d i t



EUROPE

28%

41%8%

6%

6%

8%

GRC 20/20 Inquiries by Geography

NORTH AMERICA

CENTRAL/SOUTH AMERICAMIDDLE EAST

OCEANIA

ASIA

3%

AFRICA



Preference of SaaS or Traditional Software for GRC

30

S31% Prefer SaaS

39% Do Not Prefer

3% Unsure21% Neutral

9% Don’t Know

Do you prefer SaaS GRC (hosted externally) or traditional software (internally hosted)?

All Responses

45% Prefer SaaS

27% Do Not Prefer

3% Unsure22% Neutral

6% Don’t Know

Those Leading GRC Strategy

290 respondents from organization using or considering GRC solutions/technology



Top 8 Criteria Looking for in New GRC Purchases

Ease of Use

Price

Functionality

Configurability

53%

41%

40%

39%

Industry Focus

Customer Service

Integration Capabilities

Company Stability/Viability

26%

23%

21%

16%




Level of GRC Integration

10%

25%

37%

28%

We have integrated processes and technology across many or all organizational silos of operation

We have integrated processes across many organizational silos, but we have not yet completely addressed integrating technology that supports these processes

We have standardized some processes and use of technology but not across the entire enterprise

Our processes and technologies

remain largely siloed

Pick the statement that best describes your organization's state of integration of GRC capabilities. (The more integrated you are, the more you share information and use standardized approaches to how you manage and provide assurance about performance, risk and compliance.)




Level of GRC Integration Compared to 3 Years Back

23%

44%

22%

11% Yes, substantially more

Yes, somewhat more

No, but it is planned

No, and we have no current plans

for change

Is there greater GRC integration in your organization today than there was three years ago?




Satisfaction of GRC Integration from those Who Integrated

22%

67%

11%Provided benefits that exceeded expectations

Provided benefits that met expectations

Failed to meet expectations

Where your organization has integrated processes for governance, assurance and/or management of performance, risk and compliance (GRC), the results have:




Reduced gaps in risk and compliance processes (70%)1

Reduction in redundant or duplicative activities (59%)2

Greater ability to repeat processes in a consistent manner (54%)3

Greater ability to gather information quickly and efficiently (54%)4

Reduced impact on operations from siloed and uncoordinated risk assessments (52%)5

Greater ability to present consolidated, meaningful information and analyses (46%)6

Reduced costs of GRC processes (42%)7

Reduced impact on operations from siloed training on compliance requirements (32%)8

Beneficial outcomes from those who have integrated GRC processes




No established strategy for integration (46%)1

Inability to secure program/department cooperation (38%)2

Lack of champions (37%)3

Belief it is too complex to undertake integration (36%)4

Lack of a compelling business case or method to demonstrate ROI (31%)5

Inability to secure necessary budget (20%)6

Not knowing how to start or implement (19%)7

Available technology/software not aligned with GRC needs (16%)8

Greatest barriers to integrated GRC in siloed organizations







3) Personas





Internal Audit

§ American Institute of Certified Public Accountants

§ Assoc. of Certified Fraud Examiners§ Assoc. of Chartered Certified

Accountants§ CPA Canada§ Financial Executives International§ Institute of Internal Auditors§ Institute of Management Accountants§ Information Systems Audit & Control

Association

Industry Specific Associations:§ Assoc. of College and

University Auditors§ Assoc. of Credit Union Auditors§ Assoc. of Healthcare Internal Auditors§ Assoc. of Local Government Auditors§ National Assoc. of Financial Services

Auditors

§ Audit Planning§ Documenting Risks and Internal Controls§ Planning & Preliminary Fieldwork§ Audit Scope§ Audit Execution & Fieldwork§ Sampling & Testing§ Workpapers & Record/Time Keeping§ Audit Findings & Reporting§ Risk Assessment

RELATED HATS (SOMETIMES AUDIT DOES THESE AS WELL):§ Compliance§ Ethics§ Fraud§ Investigations§ Risk management

§ Audit is often struggling to manage audits in spreadsheets,documents and emails.

§ They then begin looking for an overall solution to manage audits in an integrated audit management platform to manage audit planning, scheduling, resources, workpapers, execution and reporting.

§ About 50% of audit departments desire their own segregated audit management platform and the other 50% look to have audit management as part of a broader GRC platform.

§ With the number of new audit solutions available in the market there has been a lot of churn in the market and some moving from more established legacy players.

§ Audit analytics is a growing area of audit solutions.

The Internal Audit role in a organization provides independent and objective assurance of business activities and processes with a goal to improve an organization's operations. Internal Auditors monitor, assess, and analyze organization risk and controls as well as review and confirm compliance with policies, procedures, and laws. Internal audit provides the board, the audit committee, and executive management assurance that risks are mitigated and that the organization's corporate governance is strong and effective.

1) Audit Management Platforms2) Audit Analytics3) Risk Management Solutions4) Internal Control Management5) Automated / Continuous Control Monitoring

NETWORKING: BIG PICTURE: WHAT INTERNAL AUDIT DOES PURCHASING BEHAVIOR:

OVERVIEW: TOP GRC SOLUTION AREA NEEDS:



Corporate Compliance & Ethics

Industry Associations:§ Association of Certified Fraud

Examiners§ Ethics & Compliance Association§ Open Compliance & Ethics Group§ Society for Corporate Compliance &

Ethics

§ Anti-Bribery & Corruption. § Regulatory Change Management. Keeping up with business and regulatory

change.§ Policies & Training. Keeping policies current and delivering effective training.§ Regulatory Exams. Increased regulatory scrutiny in context of regulatory

examinations with focus on role of board of directors plays in overseeing compliance.

§ Vendor Risk Management. Increased regulatory requirements on vendor risk management, particularly US OCC requirements across the entire lifecycle of third party relationships.

§ Consumer Protection. Need to enhance compliance infrastructure to support aggregating and reporting on customer data as well as manage customer complaints and reporting.

§ Corporate compliance and ethicsdepartments tend to have a legalbackground and are not as tech savvy as other areas of GRC.

§ They are challenged with many issues, regulations, that are constantly changing.

§ As a result, they tend to focus on the immediate problem at hand and do not always think big picture. Much of their buying is on tactical solutions to solve very specific problems.

§ This has led to a lot of redundancy and overlap.

§ Solution providers need to know how to sell to the tactical issues they face, but need to be able to help educate compliance roles to how a broader information and technology architecture for compliance can benefit them.

The Corporate Compliance (& Ethics) role is tasked with addressing the major compliance issues the organization faces. This role reports into Legal in about ½ of organizations and it reports outside of legal, typically to the CEO and Board, in others. This function is typically led by a Chief Compliance Officer (CCO) or Chief Compliance & Ethics Officer (CECO) and primarily responsible for major compliance issues as well as coordinating compliance across other organization functions.

1) Compliance Management Platform2) Regulatory Change Management Solutions (Content & Technology)3) Enterprise Policy & Training Management Solutions4) Issue Reporting (Hotlines) & Management5) Customer Complaint Management6) Compliance Forms & Reporting7) Third Party Management

NETWORKING: BIG PICTURE: WHAT KEEPS THEM UP AT NIGHT PURCHASING BEHAVIOR:




Information Security

Industry Associations:§ Association of Information Security

Professionals§ Information Security Forum§ Information Systems Audit & Control

Association§ Information Systems Security

Association§ ISC2§ The SANS Institute

§ Regulatory Growth & Change. The volume and pace of regulatory changehas CISO’s stretched thin in trying to keep pace. This comes with an increase in regulatory exams and interactions.

§ Vendor Risk Management. There is growing requirements to oversee vendor risk management in financial services (e.g., OCC in banking in the US) which falls directly on the CISO role to lead.

§ Managing Security Incidents, Identity Theft & Fraud. The variety, complexity, and growth in identity theft and fraud has CISO’s stretched thin in discovering, responding to, and containing IT security incidents.

§ Cloud Computing. While financial services has been more reluctant than other industries to embrace the broad trend in cloud computing there has been no holding it at bay and it requires the CISO role to govern.

§ Confusing Reporting Lines. Many CISOs in financial services find themselves in confusing lines of reporting often with dual reporting into IT and operational risk management.

§ Mobility. The growth in financial services mobility apps has CISOs challenged to ensure that new mobile platforms and apps are appropriately secure.

§ The CISO role has been a coreleader in enterprise GRC strategyand platforms.

§ This is often the case because IT security has implemented an IT GRC platform that they desire to see grow into an Enterprise GRC platform.

§ About 75% of Enterprise GRC platform RFPs have an IT GRC component to them.

§ The core capabilities in IT GRC that the CISO looks for are vulnerability / threat management, IT asset management, policy management, risk management, compliance management, and vendor management.

§ IT audit is also a very important focus, and while reporting into IT audit it works closely with the information security department in providing assurance to the organization.

The Information Security role is led by the Chief Information Security Officer (CISO). This role sometimes has a dual reporting responsibility to both IT and operational risk management. The role is tasked with managing risk to information and technology systems and complying with regulations that impact information and technology. The role works closely on privacy with the Chief Privacy Officer, and the role of CISO and CPO are combined in some organizations.

1) IT GRC2) Information Security Architecture3) Policy Management4) Third Party Management (Vendor Risk Management)5) Enterprise GRC6) Incident Management7) Business Continuity





Risk Management

Industry Associations:§ Global Association of Risk Professionals§ Institute of Risk Management§ Professional Risk Managers

International Association

§ Risk Normalization & Aggregation. Enterprise & operational risk manage-ment is complex with a variety of methodologies and analysis techniques. Risk managers are challenged as they seek to implement risk models that work at functional levels but provide objective risk insight when aggregated and rolled up across the organization.

§ Risk Modeling & Analytics. Risk officers and managers are constantly revising their modeling techniques and capabilities.

§ Model Risk Management. There is growing regulatory concern and requirements in managing the risk to the variety of models being used across the organization.

§ Information Security. Risk managers in financial services have information security risks as one of their top priorities and challenges.

§ Risk Interrelationships. With the complexity of risk areas and segmentation there is a concern that a view of risk becomes myopic and not taking into full consideration the cascading impact and interconnectedness of risk.

§ Risk management is a leadingadopter of GRC platforms togather a range of risk data and analytics in a single platform.

§ However, there is growing awareness for a broader risk architecture or GRC architecture as there are many risk solutions that are very specialized that a single platform cannot adequately address.

§ It is critical to discuss the core needs of an enterprise risk/operational risk platform as well as the distributed needs and how all of the components work together.

The Risk Management function is a complex set of oversight that involves the Chief Risk Officer at the top and lines of strategic, treasury (e.g., credit, market risk), and operational risk management. Within insurance it becomes very confusing as the Chief Risk Officer role is most likely focused on actuarial and not a broad enterprise and operational understanding of risk. Risk management requires a high degree of collaboration across many islands of risk scattered across the financial services organization.

1) Enterprise & Operational Risk Management2) Model Risk Management3) Risk Modeling & Analytics4) Loss Collection & Analytics5) Information Risk Management & IT GRC





Procurement

Industry Associations:§ Association of CAUCUS Technology

Acquisition Professionals§ Association of Certified Procurement &

Operations Professionals§ American Purchasing Society§ Chartered Institute of Procurement &

Supply

§ Growing Regulations on Vendor Risk Management. Procurement professionals find that they are under scrutiny by regulators and have to respond to a growing array of regulatory requirements (e.g., OCC vendor risk management, anti-bribery & corruption).

§ Collaborating or Competing With IT Security. The lines of responsibility for vendor risk management are often confusing and procurement finds itself working with IT security and at times is in conflict in approach and platform needs.

§ Conducting Due Diligence. The demand as well as breadth of due diligence requirements has procurement tasked with figuring out how to scope and provide a comprehensive approach to 3rd party due diligence and be able to do so on a regular basis, not just onboarding.

§ Vendor Portal & Onboarding. With a growing number of third party relationships, procurement is trying to find ways to manage these relationships when it is not being given more resources to do so. This includes implementing vendor portals that include self-registration and automation capabilities.

§ The needs of procurement and IT security often find themselvesat odds with each other as they look for solutions with different capabilities.

§ IT often comes into vendor risk management mandating their choice of platform without considering the needs of procurement.

§ Successfully approaching third party management requires a collaboration with procurement, security, compliance, legal, and business operations.

The Procurement role has become critical to GRC strategies with the growing demands of vendor and supplier risk and compliance being put on organizations by the regulators, particularly the OCC in the United States. This role is often tasked with shared vendor risk management responsibilities alongside information security as well as compliance/legal.

1) Third Party Management2) Due Diligence Content & Services3) Vendor / Third Party Portals4) Policy Communication, Training & Attestation5) Compliance Forms Management








3) Personas





GRC Technology Market: Audit Management & Analytic

Audit Management & Analytic

Audit Management Platforms

Audit Analytic Solutions

Miscellaneous Audit Tools

Audit Management & Analytic technologies are used by auditors to manage and perform audits.

– Audit management solutions are used to manage audit cycles – this includes audit planning, resource scheduling/calendaring, work paper management, audit execution, audit process management, and audit reporting. They also support a risk-based approach to audit planning to prioritize audits based on the risk to the business.

– Audit analytic solutions utilize data analytics and and continuous auditing (automated control enforcement & monitoring) to extract insights from operational and financial data to assist in audits and provide assurance.



Audit Management Capabilitiesq Audit planningq Risk-based approach to auditsq Workpaper managementq Audit calendaring & resource schedulingq Audit executionq Audit reportingq Mapping of risk and control objectivesq Branch/store audit supportq Mobility apps for audit (e.g., tablets, smartphones)q Offline audit capabilitiesq Business process management capabilitiesq User interfaceq Embedded audit analyticsq Internal control managementq Risk managementq Compliance management

Audit Analyticsq Integration into environmentq Ease of scriptingq Integration into audit platformq Testing & samplingq Analysis scripts and authoring environmentq Architectureq Support for different processesq Visualizationq Validationq Integrating external data sourcesq Continuous auditing supportq Reporting

Anatomy of an Audit RFP

NOTE: these are just a selection of some common elements from GRC 20/20’s RFP template containing over 200 requirements for Audit Platforms



Miscellaneous Environmental Tools

GRC Technology Market: Environmental Management

Environmental Management

Environmental Management Platforms

Air, Water, Waste Management Solutions

Energy & Carbon Management Solutions

Environmental Management technologies help monitor, analyze, record, and report organizational activity focused on compliance with environmental laws and regulations, related corporate policy related to managing environmental controls and conditions, and assessing the environmental impact of the corporation’s operations, strategies, and plans.

Land Use & Permit Solutions

Sustainability & Environmental Reporting Solutions

Chemical Management Solutions

Health & Safety Management

Health & Safety Management Platforms

Health & Safety Forms & Document Solutions

Occupational Safety Solutions

Health & Safety technologies manage the regulatory and policy-based guidelines and processes for protecting and reporting on the workforce, workplace, resources-under-management and external environment impacted by an organization’s activities.

Health & Safety Incident Solutions

Hazard Analysis Solutions

Chemical Management & Labeling Solutions

Miscellaneous Health & Safety Tools



EH&S Management

EH&S technologies manage the regulatory and policy-based guidelines and processes for protecting and reporting on the workforce, workplace, resources-under-management and external environment impact of an organization’s activities. This enables organizations to manage:§ EH&S management process of projects, staff, resources,

projects/assessments, compliance risk, reporting, as well as related compliance forms & workflow.

§ Obligation management to document EH&S compliance obligations (e.g., regulations, contracts, values) and manage change to obligations and their impact on the organization.

§ Assess, document, and report on EH&S through compliance and reporting.

§ Provide a defensible record of EH&S compliance of who did what, when, how, and why at any given point in time.

§ Document issues and managing issues through to resolution.

Solution Area Definition

q Manage overall EH&S management program planning, staff, projects/assessments, and activities

q Maintain a register of all EH&S compliance obligations that is mapped to policies, risks, controls, subject matter experts.

q Manage change to obligations as regulations, enforcement actions, standards, and related sources change.

q Provide for assessments and evidence of EH&S complianceq Model and manage EH&S riskq Have a defensible audit trail of EH&S compliance to

demonstrate an effective programq Track EH&S compliance attestations and regulatory

reportingq Document regulatory and stakeholder interactionsq Manage and process EH&S related formsq Provide regulatory intelligence feedsq Report & remediate issues of EH&Sq Manage exceptions and exemptions

Critical Capabilities



GRC Technology Market: Compliance Management


Compliance Management Platforms

Compliance Assessment Solutions

Stakeholder & Regulatory Interaction Solutions

Compliance Management technologies support the overall coordination of legal, regulatory, contractual, values, ethics, and corporate obligations and responsibilities with associated compliance documentation, assessments, tasks, and records. This includes the ability to monitor, document, and manage changes to the regulatory environment and other obligations; to document all obligations of the organization; to perform compliance assessments against obligations; manage regulator and stakeholder interactions on compliance; and report on the state of compliance to regulators and stakeholders.

Compliance Forms, Reporting & Filing Solutions

Social Responsibility & Reporting Solutions

Regulatory Change Management Solutions

Miscellaneous Compliance Tools




Compliance Management solutions provide the capability to manage an overall compliance program, document and manage change to obligations, assess compliance, remediate non-compliance, and report. This enables organizations to manage:§ Compliance management process of projects, staff,

resources, projects/assessments, compliance risk, reporting, as well as related compliance forms & workflow.

§ Obligation management to document compliance obligations (e.g., regulations, contracts, values) and manage change to obligations and their impact on the organization.

§ Assess, document, and report on compliance through compliance assessments and reporting.

§ Provide a defensible record of compliance of who did what, when, how, and why at any given point in time.

§ Integrate with policy and issue management as these are core areas of a compliance program.


q Manage overall compliance management program planning, staff, projects/assessments, and activities

q Maintain a register of all compliance obligations that is mapped to policies, risks, controls, subject matter experts.

q Manage change to obligations as regulations, enforcement actions, standards, and related sources change.

q Provide for assessments and evidence of complianceq Model and manage compliance riskq Have a defensible audit trail of compliance to demonstrate a

effective compliance programq Compliance attestations and regulatory reportingq Document regulatory and stakeholder interactionsq Manage and process compliance related formsq Provide regulatory intelligence feedsq Remediate issues of non-complianceq Manage compliance exceptions and exemptions




GRC Technology Market: Policy & Training Management

Policy & Training Management

Policy & Training Management Platforms

Policy Management Solutions

Policy Forms & Disclosure Solutions

Policy & Training Management technologies mange the development, approval, distribution, communication, forms, maintenance, and records of organization policies, standards, procedures, guidelines and related training and communication awareness activities. This includes solutions used to train individuals on policy and risk areas to employees and extended business relationships. Elements of gamification, eLearning, learning management, document/content management are part of this segment from a GRC perspective. Forms and disclosure management solutions (e.g., conflict of interest, gifts & entertainment/hospitality) are included in this segment as they relate and support organization policies.

Training Management Solutions

Training & Gamification Solutions

Miscellaneous Policy & Training Mgmt Tools



Policy Management: Critical Capabilities

Policy management solutions provide the capability to mange the development, approval, distribution, communication, forms, maintenance, and records of policies, procedures and related awareness activities. This enables organizations to manage:§ Policy management process of development, approval,

communication, monitoring, and maintenance. This includes workflow, task management, and content management capabilities with version control

§ Policy portal for individuals to be able to access policies relevant to their role and responsibilities, access related resources and forms, and complete tasks related to policies and training.

§ Policy evidence to provide a system of record and audit trail of all interactions, development, approvals, communications, training, exception, exemptions related to policies.


q Manage policy lifecycle from development through maintenance and policy retirement

q Workflow, task management, and content managementq Integration w/ HR systems & business systems to identify

change where policies/training need to be communicatedq Policy portal for individuals to access policies, training,

forms, and related tasksq Forms development and management for forms related to

policiesq Editing capabilities and version control of policy contentq Ability to map policies to other GRC content and recordsq Regulatory change management to keep policies currentq Exception/exemption management of policiesq Integration of training and LMS capabilitiesq Audit trail of evidence of all policy interactionsq Mobility capabilities




GRC Technology Market: Issue Reporting & Management

Issue Reporting & Management

Incident/Investigations Management Platforms

Hotline & Issue Intake Solutions

Complaint Management Solutions

Issue Reporting & Management technologies provide issue intake and investigations management. Issue reporting solutions (e.g. hotline, whistleblower) provide a confidential, independent resource for individuals to report observations related to issues as well as potential acts of fraud, theft, inappropriate or illegal behavior, negligence or other impropriety. Investigations management solutions are used to manage investigations, issues, incidents, events, or cases: they specifically provide consistent documentation and processes for the management of events — from reporting, to managing and documenting the investigation, to recording the loss and business impact.

Corrective Action/Preventive Action Solutions

Forensics & Evidence Collection Solutions

Impact & Loss Analysis Solutions

Miscellaneous Issue Reporting & Mgmt Tools



Enterprise GRC Core: Issue Reporting & Management

Issue Reporting & Management solutions provide the capability to notify on issues and incidents and manage, document, resolve, and report on the range of complaints, issues, incidents, events, investigations, and cases. These solutions enable companies to manage:§ Issue management and resolution processes across the

organization (e.g., legal, compliance, HR, security, health & safety, quality) from the intake through the investigation and resolution.

§ Issue intake and consolidation through hotlines, management reporting, surveys, and other notification pathways.

§ Issue history to collect incidents over time and the details and analysis of business impact to feed into risk models.

§ Investigation management to manage the lifecycle and process of incidents, investigations, and processes.

§ Incident analysis for root cause and CAPA.

Solution Area Definitionq Map issues to risks, policies, objectives, obligations, and

controls to show relationships and impact of issuesq Provide issue intake (anonymous and non-anonymous) as

well as a portal to collect issues reported to managementq Structured and legally defensible investigation process and

documentationq Issue escalation when investigation grows beyond what

originally thoughtq Manage investigative resources, skills, and utilizationq Collect a detailed history of issues, particularly frequency

and impactq Conduct remediation and CAPA in context of issues and

findingsq Loss analytics and root cause analysisq Variety of templates and interfaces for managing

different types of issues




GRC Technology Market: Internal Control Management

Internal Control Management

Internal Control Management Platforms

Financial Close & Reporting Solutions

Miscellaneous Internal Control Tools

Internal Control Management technologies provide the ability to define, document, map, monitor, test, assess, and report on controls within the organization, including process and systems documentation. These solutions document internal controls, provide control assessments/self-assessments, and manage this through workflow, tasks, and reporting. Internal Control Reporting Solutions



Internal Control Management

Internal Control Management solutions provide the capability to manage, define, document, map, monitor, test, assess, and report on internal controls of the organization. This enables organizations to manage:§ Internal control program of staff, projects, resources,

assessments, and reporting§ Central register of internal controls in which controls are

mapped to risks and obligations so a single control can be implemented to address similar requirements.

§ Control assessments to query areas of the organization on control effectiveness and attestations

§ Automated controls established for continuous detective, and preventive controls.

§ Exceptions, exemptions and corrective controls so documentation is in place and does not get missed.

§ Remediation process related to weak or missing controls


q Central control register that can be mapped to objectives, risks, policies, issues, obligations, and organization hierarchy.

q Survey and assessment capability to query state of controls across organization and record attestations.

q Exception and exemption process to document control and manage process.

q Business process modeling and documentation to visually layout business processes with identified controls in process.

q Reporting on controls, including deficiencies and weaknesses

q Document control testing and findingsq Support or integrate with automated control solutionsq Remediation management to address control

issues




GRC Technology Market: IT GRC Management

IT GRC Management

IT GRC Platforms

Asset Discovery & Management Solutions

Vulnerability & Threat Management Solutions

IT GRC Management technologies are used to govern and direct information and technology (IT) strategies in the context of business. The governance function of IT is the alignment, strategy, and direction of IT to support the business. A core component of IT GRC Solutions is the ability to manage and monitor security, risk, and compliance across IT systems throughout the organization and across significant business relationships.

IT Project, Change & Service Delivery Solutions

IT Incident & Event Management Solutions

Security Event & Information Mgmt Solutions

IT Security Solutions

Miscellaneous IT GRC Tools



Critical Capabilities that Define an IT GRC Platform

Ability to catalog and manage IT physical and logical assets in context of IT and the business.

Ability to assess and manage IT risks in context of the business, and present risk exposure to risk owner for acceptance or mitigation.

Ability to document, assses, and provide an evidence trail of IT

controls and compliance to standards and regulations impacting IT and manage

compliance in context of changing obilgations and a changing IT

environment.

IT Risk Mgmt IT Control Mgmt

IT Asset MgmtAbility to discover and remediate

vulnerabilities and related threats across IT physical and logical assets, often

through integration into security tools/architecture.

IT Vulnerability Mgmt

ITGRC

IT Incident Management

IT Policy Management

Vendor Risk Management (3rd Party)

Business Continuity & Disaster Recovery

IT Audit Management

Additional Capabilities Often Are:

The scope of capabilities in the components of IT GRC will depend if your strategy is focused on IT security management or a broader understanding of IT GRC.

Four Critical Capability Areas that Define an IT GRC Platform:

Security Architecture Integration



Risk Management

Risk Management

Enterprise & Operational Risk Mgmt Platforms

Finance & Treasury Risk Management Solutions

Risk Management technologies support the identification, assessment, evaluation and response, and monitoring of risks and opportunities of risk across the organization. This includes the ability to monitor changes in the external and internal contexts to alert an organization to changing risk conditions (e.g., geo-political, economic, competitor, technology, and natural disaster) that can impact business. These systems help identify specific causes and execute historical review, simulation, interpretation and projection of impacts on an organization’s operations or assets given the potential consequences of events and the likelihood of events occurring sequentially or simultaneously. This category includes enterprise risk management systems, operational risk management systems, as well as specialized risk applications. Finance/Treasury Risk Management - involves an array of applications and systems used to identify and manage the risk factors, causes and response procedures in an organization’s financial and treasury management. These include risk technology focused on specific areas such as liquidity, credit, market, and commodity risk management that help identify risk and execute historical review, simulation, interpretation and projection of impacts on an organization’s financial assets given the potential consequences of events and the likelihood of events occurring sequentially or simultaneously.

Risk Assessment Solutions

Insurance Risk & Claims Management Solutions

Risk Analytics & Modeling Solutions

Model Risk Management Solutions

Project Risk Management Solutions

Loss Collection & Analytic Solutions

Miscellaneous Risk Management Tools



Risk Management

Risk Management solutions provide the capability to identify, assess, measure, treat, manage, monitor, and report on risks to objectives, divisions, departments, processes, assets, and projects. This enables organizations to manage:§ Risk management process of risk identification,

assessment, quantification, treatment and monitoring activities in context of objectives, including the overall management of the continual, cyclic, as well as dynamic processes of risk assessment, analysis, decision making, and response (e.g., acceptance, mitigation, transfer, avoidance).

§ Risk monitoring on changes in external and internal contexts to alert the organization to conditions that can impact objectives.

§ Risk evaluation to identify specific causes and evaluate historical review, simulation, interpretation and projection of impacts on an objectives and assets.

Solution Area Definitionq Manage overall risk management program planning,

staff, projects/assessments, and activitiesq Support for multiple risk management frameworks,

methodologies, and analysis techniquesq Set and map objectives and context (e.g., internal,

external) of riskq Enable the organization to identify, categorize, map,

and show risk relationships in registersq Enable the organization to gather information and

assessment of risks in a variety of approachesq Analyze risk from different perspectives and implement

risk treatmentq Provide monitoring and reporting on risk, including risk

normalization and aggregation enterprise reportingq Ability to analyze scenarios and evaluate risk losses

and events, and revise risk models as necessaryq Dashboarding and metrics (e.g., KRIs) on risk




GRC Technology Market: Third Party Management

Third Party Management

Third Party Management Platforms

Procurement & ERP Third Party Solutions

Third Party Management technologies provide organizations the ability to govern third party relationships (e.g., vendor, supplier, contractor, consultant, service provider, outsourcers, agent) and the lifecycle of onboarding, contracts, due diligence screening, performance monitoring, risk management, compliance management, quality and service level management, and off-boarding. The third party GRC specific solutions record, and maintain the communication, attestation, and assessment of policies, contractual compliance, risk and compliance assessments, and audits across extended business relationships. Third party screening solutions are used to vet third parties and validate them against databases such as politically exposed persons, watch lists, social accountability, and more.

Third Party Risk Management Solutions

Screening & Due Diligence Solutions

Miscellaneous Third Party Management Tools



3rd Party Management: Critical Capabilities

3rd Party Management solutions provide capabilities to govern, manage, and monitor the array of 3rd party relationships in the enterprise, particularly risk and compliance challenges these relationships bring.This enables organizations to manage:§ 3rd party management process of onboarding,

approval, due diligence, communications, assessment, evaluation, issue management, and off-boarding. This includes workflow, task management, and content management capabilities.

§ 3rd party portal for 3rd parties to be able to submit and share information, take assessments, provide attestations, and other related requests and forms, to complete tasks.

§ Provide evidence to provide a system of record and audit trail of all interactions, assessments, audits/inspections, and interactions with 3rd parties.

Solution Area Definitionq Onboarding process to register suppliers and have

them submit necessary documentationq Due diligence process during onboarding and

periodically or continually thereafterq Risk assessment and analysis of 3rd party relationshipsq Policy communication & attestation to 3rd partiesq Training & awareness of 3rd paritiesq Compliance assessment and analysis of 3rd party

relationshipsq Issue management through issue

reporting/identification, response/investigation, and resolution.

q Forms & disclosure management for 3rd parties to fill out forms and submit information

q Audit & inspection management of 3rd parties in context of right to audit clauses

q Management of the off-boarding process




Two Things to Note . . .

§ Organizations evaluating or considering GRC solutions are free to ask GRC 20/20 on our understanding and comparison of solutions in the market to meet your GRC requirements.

§ Inquiries are single focused questions that can be answered in under 30 minutes.

§ Complimentary inquiry is only available to organizations evaluating or considering GRC solutions for their internal use.

Complimentary Inquiry

§ GRC 20/20 has an extensive library of RFP requirements across a range of GRC capability areas presented in this presentation.

§ GRC 20/20 can be engaged in RFP development and support projects to streamline your process, gain perspectives learned from other organizations, and to keep solution providers honest in their responses.

RFP Development & Support


Questions?Michael Rasmussen, J.D.The GRC Pundit & OCEG [email protected]+1.888.365.4560

Some of the content we have evaluated is OCEG content which GRC 20/20 has an established relationship to use. Please do not copy slides or graphics without permission. GRC 20/20 highly recommends you consider OCEG membership at www.OCEG.org.

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