Investing in GRC Software: An ROI Analysis
There are always questions of how an investment in Governance, Risk, and Compliance (GRC) benefits an organization. The answer for how to measure ROI isn’t always easy. Far too many organizations see it as purely preventing potential future losses. Of course, that is true, but there are still a lot of tangible benefits that organizations can realize – if they take the time and effort to do so. But, if the organization does, they will find that the rewards far outweigh the costs.
A traditional Return on Investment (ROI) calculation doesn’t take into account alternative investments, which is where evaluating the “value” of GRC is realized. There are the compulsory pieces that the organization must adhere to, but the business must evaluate how to best use the capital it is given. In this case, the concept of Net Present Value (NPV) is one way to evaluate the efficacy of investing in GRC and its outcomes.
In our white paper, we illustrate how one organization applied some diligence to articulate the business and financial benefits of investing in GRC and GRC software. Although the valuation will have initial upfront costs, the organization should expect to receive measurable benefits in subsequent years. Efficiencies are gained through risk management process improvements, control optimization, better capital and resource allocation, and operational improvements.
Although there isn’t a “one-size-fits-all” approach to implementing GRC, there are leading practices that organizations can glean through other organizations’ implementations.