Enterprise risk management (ERM) leaders are facing challenges in understanding the pricing of government, risk, and compliance (GRC) tools, as the costs vary widely. According to Gartner, it is crucial for ERM leaders to familiarize themselves with four distinct pricing-tier categories of GRC solutions and use a scoping framework to estimate potential costs before selecting a vendor.
Recent studies have highlighted the lack of alignment between risk assessments and decision-making within organizations. Only 27% of heads of ERM report that senior executives consistently follow the recommendations in risk assessments, while just 31% express high confidence in their risk assessment processes keeping pace with evolving risks. Chief Strategy Officers are also facing hurdles in meeting strategic objectives, with 44% admitting to being behind and only 19% feeling confident in embedding risk management activities into strategy execution.
On the technology front, IT leaders are increasingly adopting generative AI solutions beyond ChatGPT, with 60% already using them and 28% planning to incorporate them by 2024. However, only 18% of IT leaders express high confidence in leveraging technology for risk management purposes and seizing associated opportunities.
To navigate the complex landscape of GRC tool pricing, Joel Backaler, a Director Analyst in the Gartner Audit & Risk Practice, emphasizes the importance of understanding the four pricing-tier categories that vendors typically fall into. These categories include Enterprise GRC solutions, Agile GRC solutions, Adjacent GRC point solutions, and Disruptor GRC vendors. Each category offers distinct features and price points catered to different organizational needs.
Enterprise GRC solutions, which are ideal for large complex organizations, offer extensive customization options, support for multiple risk modules, and advanced analytics capabilities. Agile GRC solutions provide essential functionalities with easier implementation and scalability, making them suitable for midsize to large organizations looking for effective risk and compliance management at a lower cost.
Adjacent GRC point solutions focus on specific capabilities that overlap with core GRC functions, such as business continuity management and regulatory change management. Disruptor GRC vendors, on the other hand, are emerging players in the market that leverage the latest technology and data interoperability to address gaps in the GRC landscape, offering room for price negotiation and product enhancement requests.
Using disruptor tools not only allows heads of ERM to access new functionalities at a lower cost but also empowers them to influence vendors’ product roadmaps. By becoming flagship customers, organizations can drive enhancements and shape the future direction of GRC tools to better suit their needs.
In conclusion, with the increasing complexity of risk management and compliance challenges, ERM leaders must carefully evaluate the pricing and features of GRC solutions to make informed decisions that align with their organization’s needs and budget constraints. By understanding the pricing-tier categories and leveraging disruptive technologies, organizations can optimize their risk management processes and enhance their overall strategic performance.