In today’s fast-paced corporate world, firms are increasingly struggling with risk management, governance, and compliance (GRC). Businesses utilize organized techniques to address these issues, such as aligning their processes, people, and technologies to ensure that they can make excellent risk-based decisions. To address these specific issues, these groups employ GRC and third-party risk management (TPRM) techniques.
Let’s explore the key differences between GRC and TPRM.
What Is GRC?
Governance, risk, and compliance (GRC) are the three most important components in an organization’s search for risk-based decision-making strategies.
- Governance: Governance defines corporate goals while influencing business processes and organizational monitoring to guarantee they are met. The governance arm sets the organization’s governance framework.
- Risk: Risk encourages the application of risk management principles to defend the organization’s goals, including IT risk management to mitigate cybersecurity threats.
- Compliance: Compliance ensures the organization follows regulatory and industry guidelines, as well as other risk management concepts. Compliance is the safest way to ensure that an organization follows best practices and meets regulatory requirements.
What Is TPRM?
Third-party risk management (TPRM) refers to the management of risks using outsourced services, products, or processes. An organization essentially leverages the advantages of working with third parties even as they strive to protect the assets and sensitive information that these third parties expose them to.
GRC vs Third-Party Risk Management
From the start, GRC and TPRM provide organizations with distinct risk management advantages. However, there is a corresponding gap between TPRM and GRC.
Some noticeable distinctions include:
- GRC is a comprehensive framework that provides governance, risk management, and compliance within an organization.
- TPRM focuses on identifying and mitigating risks associated with external third parties, though it operates within broader risk management strategies rather than as a standalone framework.
Is GRC and Third-Party Risk Management Truly Comparable?
GRC and TPRM appear to differ on various levels. For example, GRC is not just a framework but a comprehensive strategy employed to manage activities spanning governance, risk management, and compliance within an organization.
TPRM does not interfere with GRC in any manner. Instead, it exists as a subset that supplements the risk-management benefits provided by GRC. TPRM focuses on risks created by an organization’s relationships with third parties.
Enhance Your Risk Management Strategy Today
An organization can leverage the benefits of GRC and TPRM to improve its management, governance, and compliance challenges. GRC and TPRM share various similarities and outcomes, and they can be used concurrently as they can manage and mitigate risks in their respective environments. ComplyAssistant’s GRC risk management software can help with your compliance needs.