GRC (Governance, Risk and Compliance) is the organization’s capability to ensure the achievement of its objectives reliably, mitigate the risks and act with integrity for the achievement of the goals.
Governance relates to Processes adopted by the top management to drive the company towards the achievement of the goals. With Sales being the most important revenue generation stream for any company, the process of customer prospecting, targeting and communication vary for every organization depending on their service. The processes are designed to extract maximum value from the customers and deliver it to stakeholders.
For example, for an industrial product, the process of prospecting new customers is about finding potential businesses for which the product can be a valuable addition to their business. However, for a pharmaceutical firm, it is about prospecting the medical practitioners for communicating the benefits of the product. These two businesses communicate in different ways and the processes are different from each other. For pharmaceutical industries, it needs to develop sales structure which facilitates more of personal selling in contrast to industrial selling, which requires communicating with multiple stakeholders.
Risk Management refers to predicting the risks in advance and managing it in order to reliably achieve its objectives. The risks can be classified into two types – Systematic Risk and Unsystematic Risk. Systematic Risk refers to uncertainties mainly driven by economy changes as a whole. For example, an increase in interest rates on loans would drive businesses to hold on their strategic investments which would affect the sales of their partners. Unsystematic risks refer to risks arising due to the inefficient execution of work processes in the organization. It can be the inability to retain customers, missed opportunities or lack of efficiency to maintain customer contact.
A well-defined sales organization must have sales managers monitor sales flow, conversion rates, and yields, with a constant eye on any opportunities for improvements or catch an adverse situation early.
Compliance refers to mandatory boundaries by regulators and voluntary internal targets or goals. The consumers today are protected from unfair trade practices by the regulators. Unfair and aggressive commercial practices which may have an unfair effect on customer’s decision-making process are banned by the regulatory bodies. Sales processes in the pharmaceutical industry are heavily scrutinized by the regulatory bodies owing to the highly sensitive nature of sales having a direct impact on the consumer’s health. For the banking system, the major compliance issue is of the opening of unauthorized accounts of customers. With these unauthorized accounts, the compliances for a loan process is also risked. With non-compliances of the responsibilities or contract, the bank can face high credit risk and low reserves leading to huge financial losses.
With salespeople representing their company in the market, internal compliances for sales processes is very important. The set sales processes with clearly defined activities mandate the sales people to comply with standards and procedures for the best possible output. The bandwidth of sales evaluation has expanded from traditional sales data analysis to sales process analysis. These compliance reports can depict a clear picture of salesperson effectiveness and adherence to set processes. Non-compliance with company procedures would affect the performance which is directly linked to sales people evaluation.
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