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GRC Tuesdays: Moving to the Cloud for Compliance Is No Magic without Integration and Automation Part One

compliance_circular_word_cloudsIn governance, risk and compliance (GRC), like in other area of the business, we’re witnessing a strong trend towards Cloud-based technology offerings, particularly in the area of compliance and internal control systems. High promises  of efficiency gains, better quality in compliance processes, and even increased performance for the business are being made. It almost sounds as if—by a sort of magic—moving to the Cloud would solve the pains of managing compliance and controls that too many companies today still  experience (too many manual tasks, high costs, insufficient assurance, and so on). Obviously, this seems worth taking a closer look, beyond the promised “wonders” at what is really provided. Since  more and more companies plan to adopt a Cloud-based solution for their compliance and controls, it’s important to ascertain  whether the most critical needs will actually be addressed.

Asking the Right Questions Whatever the Architecture

Looking deeper into the value proposition of a number of new Cloud-based offerings (whether they come from new, “pure -Cloud” players or are promoted by the more traditional GRC niche players), it strikes me that the presentation of the core capabilities hasn’t really evolved from what is already provided today with on-premise architectures.

Undeniably, Cloud solutions provide technology advantages and gains in terms of collaboration, faster implementation of new features as they are delivered and reduced maintenance costs. But when we examine the more core functional capabilities offered, we don’t really see anything new around automation and continuous monitoring of controls, integration with core business systems, or embedding of controls into critical business processes.

It seems all too clear that the outdated ways of managing compliance and controls with traditional niche GRC solutions have simply been transposed to many of the new Cloud-based offerings. This means, among other things, that their users will continue to:

  • Operate their GRC processes in isolation, disconnected from their ERP and other core business systems, unless they take on the burden of building and maintaining interfaces.
  • Spend excessive amounts of time and efforts on manual tasks to evaluate and test their controls.
  • Have to look for problems after-the-fact in masses of data, instead of being alerted when they occur.
  • Face the risk of undetected compliance failures and other issues, due to piecemeal compliance processes.

As a result, they may find out after moving their GRC to the Cloud that the gains, confined to the more technical aspects, are all in all small compared to the persistent cost and effort of managing their compliance and controls in a still disconnected, exceedingly manual, and discontinuous way. We are far from the promises of efficiency and even further from the claims of increasing business performance that flourish in the “GRC in the Cloud” marketing space.

What Can Companies Do?

Whether companies prefer to stick to an on-premise architecture or decide to move to the Cloud for their GRC, they need to ensure that the chosen solution:

  • Provides out-of-the-box integration.
  • Allows time-consuming tasks such as testing to be automated.
  • Delivers a management-by-exception pattern through continuous monitoring of controls.

More than ever, these capabilities remain critical to help them achieve sustainable compliance, reduce their risks, and drive tangible efficiencies.

Furthermore, by choosing software that can embed controls into their critical business processes, businesses have a real opportunity to increase the performance of their operations—and not just by magic.

Is It Time to Move to the Cloud?

Provided the above-mentioned conditions are met, choosing a Cloud-based architecture can actually boost the advantages that a truly integrated, automated GRC system already delivers.

Join me here next week,  where I’ll discuss examples of the compounded benefits that such a solution offers in Part Two of this blog.

What Do you Think?

Share your thoughts with me here or on Twitter at @JPugnet .

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