In our last article, we looked at how a combined governance, performance, risk management and compliance strategy (GPRC) can deliver positive outcomes across a range of business functions. In this piece, we’ll look more specifically at how GPRC impacts organizational efficiency and corporate performance, in both a practical sense and, more broadly speaking, in its effect on the wider organizational culture.
Time and cost savings
Perhaps the most immediately visible benefit is the tangible saving in time and cost resulting from the implementation of an integrated GPRC strategy. Adopting a joined-up approach to these four key disciplines results in less duplication of work between departments or divisions, and less overall time spent on risk management or internal control tasks.
These savings have a knock-on effect in relation to growth - reducing the cost of developing new products or services, entering new markets or implementing new processes. The result is a boost in enterprise performance across the board, with lower barriers to exploring new areas of business growth.
From an operational perspective, a combined GPRC strategy lays the groundwork for effective task and process automation, when compared to the more traditional siloed approach to managing these factors. This in turn contributes to reduced costs, both internally, in terms of staffing and administrative overheads, and externally, by reducing the organization’s reliance on external auditors.
In addition, the automation of key processes leads to fewer negative outcomes, for example, reduced error rates or instances of non-compliance, all of which have a positive benefit in terms of reducing overall management and executive workload and eliminating unnecessary resolution costs.
Analysing organizational risk in the context of performance, governance and compliance leads to greater efficiencies than when risk management is treated as a standalone discipline.
For example, maintaining a cohesive and comprehensive overview of how emergent risks affect and are affected by their interaction with these other disciplines results in improved compliance. This, in turn, has a significant positive effect on operational costs, reducing the likelihood of negative audit findings, regulatory breaches or legal proceedings.
The resulting improvements to risk management enhance the organization’s risk profile, thereby reducing the cost of capital funding and insurance, freeing up a substantial budget to invest in efficiency improvements in other areas.
Ownership and vision
As well as having an immediate impact in terms of the efficiency of day-to-day management and operational work, an integrated GPRC outlook reduces the silo effect, enabling managers to recognize interconnections between different departments or business functions and synchronize their activity, goals and objectives with company strategy.
Similarly, at the board or C-suite level, introducing GPRC allows for more informed, data-driven decisions based on a clear vision, and ensures that the overarching strategy is linked accurately to the best interests of the business.
Overall, GPRC helps to embed ownership at the heart of the organizational culture, empowering individuals at all levels to confidently identify and advocate for greater efficiency in their own areas of responsibility, while developing an improved understanding of the overall business context of each initiative.
Combining data and inputs from governance, risk management, compliance with performance also helps to facilitate continuous process improvement. More accurate root cause analysis, more informed planning and more accurate modelling all lead to faster identification and implementation of efficiency gains.
Additional efficiencies can be realised in the CPI process itself, as potential improvements can be rapidly evaluated against strategic objectives, assessed in terms of impact, precisely costed and prioritized accordingly.
Increasing efficiency within your organization
If you’re interested in finding out more about how an integrated approach to GPRC can help your organization to introduce greater efficiency, manage costs and improve processes, you can register for our free upcoming webinar on junio 21, 2021, at the link below.