Companies see regulatory changes as the second biggest risk facing global businesses, second only to the economic slowdown, according to a recent survey by insurance brokerage Aon Corp. Reflecting these concerns over new regulations and legislation is the rising profile of governance, risk and compliance (GRC) software, a term applied to products that help companies deal with areas as far ranging as Sarbanes-Oxley compliance, risk management and IT governance.

That breadth of functions can make the category a bit hard to pin down. John Hagerty, a vice president and research fellow at AMR Research, puts total 2008 spending on GRC products at $32.1 billion and estimates there are hundreds of GRC providers. Various GRC products perform such distinct tasks that it's hard to compare them, Hagerty says. "The GRC marketplace is a collection of functions that don't all interact with each other."

GRC products got a big boost earlier in this decade from the Sarbanes-Oxley Act, and since then, other regulations have helped fuel demand. But slower economic growth may temper companies' willingness to invest big bucks in GRC products, Hagerty says. When the economy was flourishing in the middle of the decade, "someone just had to breathe the word compliance and everyone jumped," he says. "And someone would invoke risk, and people would jump. In flush times, people were able to use compliance and risk as levers to get projects moving."

Continue Reading for Free

Register and gain access to:

  • Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
  • Informative weekly newsletter featuring news, analysis, real-world cas studies, and other critical content
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.