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Is continuous controls monitoring at the top of your GRC agenda?

Is there a groundswell in business for using continuous controls monitoring to beef up corporate governance risk and compliance programs? Analysts and vendors have certainly launched a full-out campaign for its relevance.

AMR Research Inc. in Boston named CCM one of the top GRC software investments companies will make in 2010, right behind compliance management software and business process management BPM products.

Gartner Inc. analyst French Caldwell called out CCM for business and financial applications as a top trend when I spoke to him in December for our preview of the major GRC issues in 2010.

Of course, IT has long used controls automation for configuring servers, conducting audits, maintaining security and so on. CCM was used in complying with the Sarbanes-Oxley Act requirements for segregating duties. But CCM is increasingly being used for business performance issues — for example, to eliminate duplicate payments in real time rather than on a quarterly basis; or to ensure that invoices are paid on schedule but not in advance, to keep that working capital.

“Controls automation is moving up the stack. It’s making sure the business rules are being followed,” Caldwell said, adding that the big enterprise resource planning vendors such as SAP AG and Oracle Corp. are doing just that.

So are the point solution vendors. John Becker, CEO of Approva Corp., a CCM software provider, makes a case for his software in a white paper coming out in a March issue of Compliance Week. Unlike other GRC technologies, Becker argues, CCM delivers “tangible, hard-dollar savings,” and in his white paper he offers up some choice examples, presumably from Approva customers:

  • Lower procurement costs: A telecom company reduced expenses by $2 million by flagging purchases that did not take advantage of available discounts, and preventing unnecessary purchases that circumvented corporate policies.
  • Improved order accuracy and on-time shipments: A manufacturer of construction Lower procurement costs: A telecom company reduced expenses by $2 million by materials reduced the number of sales orders that were delayed and required manual rework by 60% by identifying incomplete and inaccurate information when the sales order was created, and flagging open sales orders that were not shipped within 20 days of their original commitment.
  • Reduced accounting errors: A manufacturer in the midwestern United States reduced the number of financial reporting anomalies requiring manual follow-up and investigation by more than 50%, and significantly increased confidence in the accuracy of its financial reports.
  • Lower audit and compliance costs: The internal audit organization of a $1 billion software company reduced the time its external auditor spent testing its controls by 80% for each key control that they automated.
  • Reduced risk of fraud: A home improvement retailer reduced the risk of employee theft by monitoring the distribution of free samples to identify suspicious orders, excessive shipments and samples with alternate ship-to addresses.

So, is this all hype, or as the lobbyists like to say, a “conflict confluence of interest” for analysts and vendors? I’m curious if readers are seeing an uptick in continuous controls systems for GRC at their companies.

And I need to ask a really dumb question to boot: Would moving to the XBRL electronic data format for financial and other reporting accomplish the same transparency?

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