Today I’ve seen a blog entry which claimed that GRC is dead. That reminded me about the closing keynote of our European Identity Conference 2009 where I had a discussion with Paul Heiden of BHOLD Company about GRC. Paul claimed that GRC is just dealing with FUD (fear, uncertainty, doubt) and that there is no real business value in this.

So – is the market for GRC solutions (Governance, Risk Management, Compliance) dead before it really blossomed?

Yes, if GRC is limited to auditing, with focus on some dashboards and some information extraction for auditors.

No, if GRC is understood as something which goes well beyond this and isn’t limited to a narrow one-way-road. And that is how we understand the GRC market and how we have defined this market segment in our GRC Market Report 2008.

There are some real value propositions for GRC solutions, beyond “avoiding penalties” as the classical negative inhibitor:

• On the lowest level, one standardized approach to GRC issues tends to be more efficient than many point solutions.
• Much more important is the ability to not only audit but control – Enterprise Authorization Management (or Entitlement Management) is one of the key elements of GRC solutions, providing business control for the access to IT resources.
• This is, by the way, much more efficient than the granular, isolated management of access controls on lower levels. A relatively small number of business roles and rules usually covers a significant part of all access controls on lower levels in the infrastructure, down to the system level. These lower level controls can be derived, with some added exceptions.
• The probably most important aspect is that GRC done right enables a more efficient management, focused on exceptions. Defining and measuring risks provides this ability.

From our view, GRC has to be understood as an initiative which is at the core of Business-IT alignment. GRC has the potential to fulfill these (today in most cases unfulfilled) promises of building a link between business and IT.

Key Risk Indicators (KRIs) are metrics for Risk. Most of the metrics discussed today focus on either pure business aspects or, with IT and Identity Risk Management, on technical aspects. How long does it take to provision accounts in different systems? How many orphaned accounts do you have in different directories? …

But: There is another layer of KRIs which has to be monitored. For example: How long does it take until an organizational change is known to the provisioning system? The provisioning process might be extremly fast – if it isn’t started, it is still far too slow.

Thus, I propose to define four layers of KRIs:

• Business KRIs
• Business-IT KRIs which measure the interaction of Business and IT
• High level IT KRIs like the orphaned accounts or the performance of provisioning processes
• System level IT KRIs for specific aspects of the single systems

That maps perfectly to my three layer view of Identity Management, with the GRC layer (Business to IT), the provisioning layer (High level IT), and the system level. KRIs on different levels can be combined for a complete view on risks. That is inevitable because, like mentioned above, there might be a low risk on one level but the overall risk might be still high.

In general, using KRIs is an interesting approach not only to know about risks but to measure and improve your organization – and not only IT.