Risk management is an evolving process. Over the last few years, the myriad of requirements has exploded, and many organizations fear they are unable to keep pace with change. According to “The State of Risk Oversight,” 70% of organizations report the risks they face are increasingly complex and numerous compared to five years ago, and only a quarter believe their IT risk management solutions are robust enough to support them.
Encouragingly, in a bid to tackle this disconnect, increasing numbers of Boards are taking an active role in the oversight of IT risk management. But is it enough?
Figure 1 below demonstrates the challenges of regulatory, technological and business governance, which are challenging more organizations.
Figure 1: evolving IT risk management challenges cause organizations increasing levels of pain.
The problem is that traditional approaches to IT risk management aren’t effective. Miscommunication, a lack of departmental collaboration, fragmented systems and duplicated or lost information, mean the controls required to inform the business and mitigate risk don’t materialize. And this means the business is less likely to achieve its overall strategic objectives.
Gartner agrees. In its report, “Transform Governance, Risk, and Compliance to Integrated Risk Management,” it shows that nearly three-quarters (74%) of organizations believe forecasting critical IT risks over the next three years will be increasingly difficult due to a lack of cross-organization collaboration.
To achieve next-level compliance, it’s clear you need better oversight of all the IT risks affecting your business, including your third-parties. Once you understand all the challenges you face, you can implement the controls to inform your decision making, protect your investments and safeguard your reputation and operations.
The trouble is that when trying to resolve their IT risk management challenges, many organizations employ a “technology-first” mindset – if they implement an enterprise solution, they must be protected. Not true. Technology only works if it’s implemented correctly, and to implement it correctly, you need to understand the big picture.
By taking a step back to identify all the IT risks your organization is exposed to, the interdependencies between your business functions and any existing vulnerabilities, you gain an understanding of your current IT risk posture. Then you have to question your risk appetite and start to identify how you can implement integrated risk management and governance risk and compliance software.
As demonstrated in figure 2, moving towards the ‘ideal’ scenario where everything works in harmony means that your organization now has a common language when talking about IT risk management, the control activities are effective, your business functions (pillars) are working together, and the whole business is able to operate ethically and with integrity.
Figure 2: taking an integrated approach to IT risk management moves you towards the ‘ideal’ business scenario.
Our GRC Practice Director, Alex Hollis, has over 16 years’ experience in IT, mobile technology and software development, having spent the last seven years specializing in governance, risk, and compliance software (GRC). In this series of blogs, he will guide you through the challenges of integrated risk management and how to overcome them.
In the first installment, he discusses the challenges of business silos and how to integrate your business pillars to them.