The merging of governance, risk management and compliance methodologies continues to gain visibility in both business and academic circles. Known as GRC, this tri-partied coalescence of best practices is now starting to get thorough support from business intelligence (BI) vendors around the globe. Much of the BI-centered GRC focus revolves around performance metrics and leading/lagging indictors that are rooted in traditional statistical or data mining-practices. However, there is an increasing proclivity to treat GRC more holistically.

To achieve such a capacious GRC purview, associated BI regimens are being expanded to include real-time business process intelligence and performance monitoring. While the costs of implementing and electronically enabling better GRC mechanisms often scare organizations away from investing in holistic solutions, keeping with the status quo (minimal or no improvements/investments in better GRC business processes or supporting technology platforms) can put an organization out of business.

The last 12 months have shown us what happens when business conglomerates, such as the highly leveraged entities of AIG, Lehman Brothers and Bear Stearns, don’t take to heart their promises of better governance and risk management to regulators, shareholders and board members. Simply following existing compliance and internal audit procedures was not enough; nor was paying lip service to the need for greater controls over risk and governance.

The hard truth is that unless an organization invests real time, money and energy into a GRC platform—one that is robust with regards to data storage and delivery, dashboard-enabled and can understand how enterprise processes map to strategic business assets—they will never be “too big to fail.”  And they will always have greater than anticipated exposure to unforeseen adverse happenings in the global marketplace.

The fact of the matter is that many times companies do not have the means to measure the productivity of a particular business process at an acceptable minutia or granular level. For many, key performance indicators (KPIs) will most often attempt to measure productivity from the higher perspectives that are required by the most senior of managers.  However, these KPIs will tend to not scale downwards to capture intelligence on lower-level business processes and vital operational functions. But this is changing quickly due to the ever-increasing popularity of Lean Sigma tools and methods among global businesses.

In addition to Lean Sigma, other popular process improvement schemas such as activity-based costing (ABC) and total quality management (TQM) also train their attention on the fine points of business processes. In particular, Lean Sigma’s impact on business process performance management (BPM) and optimization has received the steadfast attention of the BI marketplace. Some of the more farsighted BI tool vendors have been quickly ramping up their product offerings and dashboard technology to embrace BPM and better track the cause-and-effect relationship of operational tasks on strategic success and overall performance.

In order to glean a better understanding of corporate risk and compliance progress, as well as opportunities in governance, a business organization must have transparency into the specifics of each mission-critical process. In order to measure the effectiveness or risk of a business operation, a multitude of questions must be answered on a process-by-process basis. For example:

• How long does it take to complete a process on average?
• What is the variance on this average time to completion by time of day, week, month or year?
• What is the variance by geographic region, business unit, accounting period, risk quotient and beyond?
• What bottlenecks in a process are most pronounced and provide the biggest obstacles to regulatory compliance?
• How often does a process fail to complete or throw exceptions?
• Where are these failures occurring? Are the resulting exceptions being handled optimally?  
• Which individuals are the most efficient at ensuring the completion of a task?
• Is responsibility and accountability for a process sufficient? Is there room for improvement in governance of the process?
• What is the real cost of a business process in terms of people and raw materials?
• What is the environmental impact of a process? (Considerations of green BI will become a huge part of GRC agendas in the future.)
• What is the cost to change or modify the process? To enhance? To Maintain? In terms of regulations?

In order to best understand and measure the performance of your business processes, you will need to have a well-documented and organized repository of vital corporate business rules. Business rules should be tightly coupled to business processes, with a minimal amount of “documentation lag” between the time a process is changed and the time it is updated in the repository.  In other words, when a process changes, so should all associated metadata and rules.