Over the last two decades, there has been a general move towards the process-view of organizations. This has been reflected in the various process improvement approaches – Reengineering, Six Sigma, etc. You can also see it as many companies have restructured themselves around their business processes instead of their technical disciplines. Payroll, which has historically been within Accounting, has moved to Human Resources. Accounts Payable, also an historic part of Accounting, has moved to Procurement. Even the recent legislation regarding financial reporting controls has caused companies to take this process-centric view. While we can debate whether or not the legislation was beneficial, I feel strongly that the ensuing focus on business processes has been – and will continue to be – a good thing. I believe that the building blocks of a company are its business processes. They are the cogs and gears that ultimately generate economic value. And when a company seeks to optimize its processes, greater economic value can be generated.
One business process that is clearly gaining in importance is Governance, Risk and Compliance (GRC). A lot of companies are still trying to get their hands around what it really is. In my view, this process is all about a company identifying what it wants to do and then clearing the obstacles to execution. The impact is widespread within a company. What a company wants to do is defined not only at the strategic level but also at the process level. As such, GRC has a lot of interaction with the other business processes within a company.
So how does all of this relate to software? Risk assessments, internal audits, compliance with external regimes, compliance with internal regimes, policies and procedures, etc. These are all components of GRC and there is a lot of information involved. And on top of the information overload, there are transactions in this process. So, any technology solution must address the maintenance of a wealth of information, the handling of transactions as well as analytical requirements.
My perception is that there has been a gap in the GRC software market space for a comprehensive solution. Many of the products in the market space are strong and capable single-purpose solutions and I wouldn’t knock any of them. But my vision is to have a complete end-to-end GRC solution that is not based on the evolution of an existing product but that is based on the actual business process. Favored Solutions has given me the opportunity to build a comprehensive solution from the ground up. By design, we did not release a product in the first two years of the Sarbanes-Oxley era as we did not want to be pigeon-holed as a SOX tool. We wanted to let the GRC market space mature as well as settle down before completing our design and release. I think it was a wise decision. And as the GRC business process matures for companies, I want to remain relevant and current with our products and services. We know from experience that things will not sit still and I want to be on the edge of change and innovation.
Alvin T. Haynes
(Chief Executive Officer)