The Hindu Business Line : Demand for governance, risk and compliance products on the rise

Bangalore, March 14 The demand for governance, risk and compliance (GRC) software products has increased significantly over the past year, and software makers say the high growth rate of Indian businesses, stiff competition and large inflow of foreign funds have been the key drivers.

Governance is a set of policies and processes that direct the administration of an organisation to optimise economic results and protect stakeholders’ interest. In India, Clause 49 of the listing agreement contains provisions related to corporate governance.

Mr Atul Sareen, Vice-President, business process platform & GRC sales, SAP India Pvt Ltd, said the number of customers using SAP GRC solutions increased to 24 by the end of 2007 from only two at the end of 2006. The company hopes to have 60 or 70 customers by next year, he said.

With more FII investment, accountability to foreign shareholders has become an necessity prompting companies to invest in compliance solutions, he said. Also, standardised procedures of corporate governance are a must for raising overseas long-term capital, he added.

Competition driven

Ms Shellye Archambeau, chief executive, MetricStream Inc, a provider of GRC and quality management solutions, said the rise in demand for GRC solutions is more competition driven than merely the need to comply. Indian companies trying to become global leaders is one of the main reasons why they are investing in compliance solutions.

Paper-and spreadsheet-based processes are resource intensive and increases the cost of compliance, said Ms Archambeau, who pegs the global GRC business at about $100 billion. MetricStream launched its solution for SEBI Clause 49 compliance in December last year. The company has its research and development centre here.

Mr Shankar Bhaskaran, Head of Asia Pacific, MetricStream, said according to a survey conducted by the company, 25 per cent of a company’s IT budget is reserved for GRC. By 2008-09, this would increase to 40 per cent.

Mr Sareen said SAP recommends customers to first implement the application access and authorisation control solution. It helps in the segregation of duties so that a particular employee does not have conflicting roles and responsibilities. For example, he said, in an organisation a person creating purchasing orders should not be the one approving it. The customer is then recommended to implement the process control solution, which allows the company to automate the monitoring, testing and assessment and certification of enterprise-wide business processes, Mr Sareen said.

Finally, the company is advised to implement the risk management application.

Mr Manoj Sethi, Vice-President, commercial and information technology, Subros, a car- air conditioning manufacturer, said access control ensures an employee has access only to information his job responsibility demands. This is very useful because attrition rates are high and it is a considerable loss if information is leaked.

Also, anybody who now demands authorisation has to go through a process, Mr Manoj said. This has led to clear policies and systems and minimised information leak.

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