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3 Key Elements to Bolster Your Risk Management Strategy

by Brian Shannon | SAPinsider, Volume 15, Issue 4

October 1, 2014

Risk will always be part of your organization’s operations, but there are some essential steps you can take to help manage risk and comply with audits. Read this article to find out how you can implement a comprehensive risk management strategy to protect your company and prepare for future challenges.

 

Risk is unavoidable in your business decisions and operations, but it can be managed with the right technology and the right strategy. SAP solutions for governance, risk, and compliance (GRC) enable organizations to manage risk and comply with highly complex financial, compliance, and regulatory audits. However, rapidly evolving audit requirements are changing the way that organizations do business, and merely implementing GRC solutions is not enough. By putting a comprehensive risk management strategy in place now, organizations can protect themselves from future risks. A successful risk management strategy incorporates three essential elements: roles and responsibilities, policies and procedures, and technology.

1. Roles and Responsibilities

While organizations generally understand and control financial risks, risks in other areas of the business are sometimes overlooked. It can be difficult when controlling data to comply with regulations — such as the Payment Card Industry Data Security Standard (PCI DSS) for credit card data or the Health Insurance Portability and Accountability Act (HIPAA) for health data — because responsibility can fall across different departments. To mitigate these broader risks, organizations must develop an information lifecycle strategy and ensure that the correct roles and responsibilities are in place.

At a minimum, organizations should consult members of the finance, legal, and IT departments to determine how specific regulations and requirements affect the way data is handled in SAP systems. Establishing specific risk management roles and responsibilities will ensure that the required controls are not only put in place, but monitored over time, and can be quickly and easily reported on in the event of an audit.

2. Policies and Procedures

Aligning organizational policies and procedures with requirements is important to any risk management strategy. SAP solutions for GRC can help organizations codify policies and procedures, and respond to audit requests in a timely manner. Organizations can also leverage the existing capabilities in SAP applications to enforce policies and procedures and mitigate risk. Optimizing existing processes in SAP systems by automating manual steps and ensuring that the SAP system is always the system of record improves controls, increases productivity, and lowers the total cost of operating SAP systems.

By putting a comprehensive risk management strategy in place now, organizations can protect themselves from future risks.

3. Technology

When putting together a comprehensive risk management strategy, it is important to consider software that can be used to enhance what is available in SAP solutions for GRC, specifically in the following areas:

  • Data capture: Organizations should consider tools  that capture information required for audit purposes, such as process diagramming solutions, which automatically document process steps and system integration points; and optical character recognition (OCR), which automatically enters large volumes of audit documentation into the SAP system.
  • Reporting: Audit regulations are constantly changing, so it’s important to invest in flexible tools to meet current and future audit reporting requirements, such as the Data Retention Tool (DART) to meet US-based financial audit requirements.
  • Data storage: Data archiving is an important consideration to reduce the cost of long-term data storage. Moving archived or infrequently accessed data to cloud storage is another way to reduce costs.
Learn More

Building a risk management strategy that incorporates these three essential elements enables organizations to mitigate risks and meet the challenges presented by financial, compliance, and regulatory audits. For more, visit www.dolphin-corp.com or download our white paper, “Auditing 101: What Every Organization Running SAP Applications Needs to Know to Prepare for Financial, Compliance, and Regulatory Audits” at http://bit.ly/dolphinforaudits.

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Brian Shannon
Brian Shannon

Principal Business Process Management Strategist
Dolphin Enterprise Solutions Corporation



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