The Internet of Things is growing at a breakneck pace, with the total number of connected devices expected to increase to 25.44 billion by 2030. Each new endpoint represents a new potential access point for criminals. And as supply chains continue to expand, threat surfaces grow with them.
In 2021, businesses across all industries generated an average total of 2,000 petabytes of data a day. This included not only structured data such as documents and multimedia files, but also unstructured data — chat logs, app usage statistics, and so on. From an analytics perspective alone, this data will be worth at least $77 billion by next year.
Though hackers are unlikely to be interested in marketing or usage data, your ecosystem is still a treasure trove. And the less you know about where and how your data is stored and accessed, the easier it will be for someone to compromise something critical. Governance, risk, and compliance (GRC) has long existed as a means by which businesses can address this.
Recently, analyst Gartner proposed what it asserts is a new, modern alternative to GRC, known as integrated risk management (IRM). What followed was something of a face-off between Gartner, leading the IRM push, and rival analyst Forrester, which opted to remain with GRC. A third analyst, GRC 20/20, also threw its hat into the ring on the side of GRC.
Which analyst is correct? Which of the two approaches to risk management is a better option for your business? And are there really tangible differences between the two, or does it ultimately just come down to marketing?
What Is Governance, Risk, and Compliance?
“GRC is the integrated collection of capabilities that enable an organization to reliably achieve objectives, address uncertainty, and act with integrity,” reads the OCEG website. “GRC [is]…a shorthand reference to the critical capabilities that must work together to achieve Principled Performance — the capabilities that integrate the governance, management and assurance of performance, risk, and compliance activities.”
This is the most frequently-cited definition of GRC pulled from Open Compliance and Ethics Group (OCEG), the global nonprofit responsible for both coining the acronym and establishing a set of open-source GRC risk management standards.
To put the above in slightly simpler terms, let’s break GRC down to its core components.
- Governance: Refers to the rules, processes, and standards by which a business operates. In the context of GRC, governance involves establishing and enforcing controls, monitoring performance, and ensuring organizational activities are aligned with IT and business objectives.
- Risk: Involves identifying, analyzing, and mitigating potential threats to the business. Risk management proactively identifies risks that may compromise crucial assets or impede strategic objectives.
- Compliance: Typically viewed as ensuring an organization follows the rules and standards set out by regulatory agencies. However, adherence to industry frameworks and governance standards are equally important.
GRC has also evolved considerably over the years. When it was initially defined in 2002, it was largely focused on helping fintech businesses comply with the Sarbanes-Oxley Act. Since then, newer iterations of the framework have added audit management, broader risk management, and compliance with other regulations. The most recent iteration, GRC 4.0, emphasizes the need for modern, agile GRC tools as opposed to the legacy GRC solutions many businesses still leverage.
GRC 5.0, which is predicted to come into effect at some point in the next two years, will be focused on cognitive processing and artificial intelligence.
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What is Integrated Risk Management (IRM)?
Introduced by Gartner in 2018, the definition of IRM is slightly more complex than that of GRC. At its core is an integrated view of an organization’s unique risk profile, and how well it manages risk. IRM also focuses on risk management practices/processes, establishing a risk-aware culture, and technologies such as an integrated risk management platform.
Its ultimate goal beyond more effective identification and remediation is to improve both decision-making and performance.
According to Gartner, IRM consists of the following components:
- Strategy: Establishing, implementing, and adhering to a governance and risk ownership framework.
- Assessment: Continuous risk analysis and prioritization.
- Response: Mitigation controls and mechanisms.
- Communication & Reporting: Tracking an organization’s risk management efforts so they can be efficiently and effectively reported to stakeholders.
- Monitoring: Ecosystem-wide processes and technologies enabling an organization to track governance, risk, accountability, compliance, and effectiveness.
- Technology: Either designing or locating an integrated risk management solution, then implementing it into a business’s infrastructure.
The basic idea behind IRM is that in order to fully understand and address risk in a large-scale context, a business must first arm itself with a comprehensive view of its entire ecosystem. Beyond internal systems, IRM requires that a business has a complete view of risk and compliance across all partners, suppliers, and external users/endpoints. Gartner also defined six key IRM use cases:
- Digital risk management
- Vendor risk management
- Business continuity management
- Audit management
- Corporate compliance and oversight
- Enterprise Legal Management
What’s The Difference Between GRC and IRM?
How different GRC and IRM are from one another is largely a matter of how you define each approach. Per Gartner, the creation of IRM was driven by the fact that GRC is too narrow in scope, largely concerned with regulatory compliance alongside risk management. Other factors, such as business mandates, are a secondary consideration at best.
Perhaps this is true of legacy GRC. Remember, however, that GRC has evolved, and continues to do so. Modern GRC accounts for business mandates and strategic objectives in much the same way as IRM.
Similarly, IRM establishes that the entire organization is responsible for risk management. GRC traditionally places responsibility entirely on the shoulders of an organization’s security or risk management team, yet this is rarely the case today.
As you can see, the differences between the two are incredibly subtle. One might even venture that they’re largely semantic. An integrated risk management approach starts with planning, implementation, and visibility, which are all part of a business’s initial GRC evaluation too.
GRC vs. IRM: Which is Better for Your Business?
Ultimately, if you’re trying to decide whether your business should implement GRC or IRM, you’re asking the wrong question. They are, for all intents and purposes, two sides of the same coin — two different descriptions of the same fundamental process.
Instead of getting caught up in minutiae, you should instead focus on defining, understanding, and conceptualizing what risks your business may face.
Are you looking for a platform that can help you transition to the next generation of GRC or IRM? Centraleyes can help.
As the world’s most advanced cloud-based integrated risk management solution, we provide your business with everything it needs to quantify, measure, and manage risk. Whether you’re in the public sector, a heavily regulated industry, or the private sector, we’ll help you reimagine your approach to GRC and IRM through simplified onboarding, powerful automation and data visualization, and a real-time snapshot into your GRC.
Book a demo today and see what a next-generation GRC solution looks like.
Start Getting Value With
Centraleyes for Free
See for yourself how the Centraleyes platform exceeds anything an old GRC
system does and eliminates the need for manual processes and spreadsheets
to give you immediate value and run a full risk assessment in less than 30 days
