The ERM Current™

Governance, Risk & Compliance (“GRC”) software has become a hot topic in the world of risk management over the past several years.  Many business people often ask what is GRC software and what is its purpose?  GRC software is akin to Enterprise Resource Planning (“ERP”) software in that it is intended to provide a single repository for disparate information in order to enable better analysis and decision making.  However, while ERP software is focused on integrating financial and operations management activities, GRC software is focused primarily on integrating risk management activities.  An article in the September 2009 issue of Insurance Networking News provides additional insight into the evolution of GRC software and its usefulness in the aftermath of the recent financial meltdown.

Much as the Greek goddess Athena emerged from the forehead of Zeus, the marketplace for governance, risk and compliance (GRC) software was birthed in an epic headache. The accounting scandals and subsequent bankruptcies of Enron and WorldCom prompted the creation of the Sarbanes-Oxley Act (SOX) and GRC software soon emerged to help companies comply with the regulations.

“If you look at the genesis of the GRC market, it was brought on by the passage of SOX in 2002,” says Tom Eid, VP research, at Stamford, Conn.-based Gartner Inc. “The first GRC solutions emerged in 2004, and at that point the focus was really on the finance and audit function.”

Five years and one credit crisis later, the risk management component of GRC seems poised for a similar boom. While no legislation has yet passed as a direct result of the financial services meltdown, few expect this to persist for too much longer. Bills intended to rewrite the regulation of financial services in general, and insurance in particular, are winding through both houses of Congress. Leaving aside the diverging opinions on the merits of the bills, a broad consensus exists that more regulations-and a larger emphasis on risk management by regulators-are inevitable.

“The administration continues to make the case that they need some sort of consolidated oversight over insurance and financial services at the federal level,” says Gary Bhojwani, president & CEO of Minneapolis-based Allianz Life. “They are talking about true regulatory oversight, whether they get it is a whole other discussion.” While the industry awaits development in Washington, rules propagated by standards bodies such as the Financial Accounting Standards Board are already being enacted, and rating agencies are putting a renewed emphasis on risk.

With so many different regulatory bodies and agencies placing new demands on businesses as well as the ever-increasing complexity of business transactions, the need to integrate risk management activities in a cost-effective manner is very real.  Wheelhouse Advisors is equipped to help companies build enterprise risk management programs and implement GRC software to enable the integration.  To learn more, visit www.WheelhouseAdvisors.com.

A recent article in Treasury & Risk Magazine highlights the fact that technology spending will certainly be impacted by the current financial crisis.  The article suggests that large-scale enterprise resource planning (“ERP”) software implementations will most likely take a back seat to implementations of risk management related software products.  Here is an excerpt from the article.

Likely to fare better in the financial services meltdown is enterprise risk management (ERM) software, the tools many say could have mitigated the global credit collapse. “Never before has there been such a need for prudent financial risk management,” said Carol Beaumier, executive vice president with software provider Protiviti Inc. “Even the strongest of companies will find themselves subject to increased market pressures and regulatory scrutiny.”

With investment dollars limited due to the tightening of corporate budgets, strong business cases must be made to reap the maximum benefits of any ERM related software implementation.   Wheelhouse Advisors provides cost-effective services to build a solid business case as well as evaluate, select and implement the appropriate ERM software solutions to achieve optimal results for your organization.  Visit www.WheelhouseAdvisors.com to learn more.

When you think of a swamp, what comes to mind?  Murky, squishy, and difficult to find your way through? Well, the same can be said for today’s Governance, Risk & Compliance (“GRC”) software marketplace.  There are many vendors crowding the market with all sorts of products that address various components of GRC. However, it is extremely difficult for companies to determine what software may be best suited for their processes and environment.  That’s because the software market and the products themselves are evolving continuously.  

Wheelhouse Advisors can help you determine not only your requirements, but also the solutions that are best suited for your company.  It starts with gaining a solid understanding of your GRC process design and overall vision for the desired end state.  With that in hand, Wheelhouse Advisors can then work to help you successfully navigate through the swamp to find a software product that will enable your program to reach its fullest potential.  

Visit www.WheelhouseAdvisors.com to learn more about how we can help your company Navigate Successfully™.