The Limits of Legacy GRC — Seven Reasons It Fails Modern Risk Management

In the corridors of risk management conferences and behind closed doors at technology vendor meetings, there's a reluctant acknowledgment that few are willing to voice publicly — traditional Governance, Risk, and Compliance (GRC) platforms are struggling to meet the demands of today's dynamic risk landscape. As someone who has spent decades consulting with both GRC vendors and their customers, I've heard the whispered confessions from technology providers who recognize these limitations but fear alienating their long-standing clients by admitting them openly.

It's time we had this conversation in the light of day.

The stakes couldn't be higher. According to a March 2025 KPMG Risk & Resilience survey of 208 U.S. C-Suite leaders, a staggering 52% of U.S. organizations have not integrated risk and resilience capabilities, accountabilities, or organizational structure. This integration gap is leaving companies dangerously exposed in an era of unprecedented volatility and complexity.

The Seven Critical Flaws of Legacy GRC

Organizations are increasingly waking up to an uncomfortable truth: the legacy GRC solutions they've invested millions in are delivering limited value relative to their high total cost of ownership (TCO). What was once seen as a necessary investment to satisfy regulators has become an expensive albatross, with limited adoption beyond the risk and compliance departments. PwC's 2023 Global Risk Survey found that while organizations continue to invest in GRC technology, many are failing to realize the expected value, with business leaders often disconnected from these systems and the insights they could provide. As digital transformation and emerging risks accelerate, the gap between what legacy GRC delivers and what modern organizations need continues to widen. Here are the seven critical flaws driving this growing disillusionment:

1. Compliance-Driven, Not Risk-Intelligent

   Legacy GRC platforms were built in an era when regulatory compliance was the primary concern. They excel at ticking boxes and documenting controls, but fail to provide actionable intelligence about risks that truly matter to the business. In our increasingly volatile world, this compliance-centric approach leaves organizations blind to emerging risks that don't fit neatly into predefined regulatory frameworks.

2. Stand-Alone Islands in a Connected World

   These traditional systems operate as technological islands, disconnected from the broader operational ecosystem. In an age where data flows seamlessly across enterprise systems, legacy GRC remains stubbornly isolated, requiring manual data transfers and reconciliation that introduce delays and errors precisely when timely risk information is most critical.

3. Control-Focused Without Risk Context

   The obsessive focus on controls rather than the risks they're meant to mitigate has created a dangerous disconnect. Organizations implement controls without a clear understanding of their risk reduction value, leading to both over-control in low-risk areas and dangerous gaps in high-risk domains. This control-centric approach fails to answer the fundamental question: "Are we actually reducing our most significant risks?"

4. Missing the "M" in GRC: Where's the Management?

   Perhaps the most telling limitation is embedded in the acronym itself. GRC lacks the "M" for management that exists in Enterprise Risk Management (ERM), Operational Risk Management (ORM), and Technology Risk Management (TRM). This isn't merely semantic—it reflects a philosophical gap between passive compliance documentation and active risk management. Legacy GRC platforms document; they don't actively manage.

5. Disconnected from Business Reality

   Legacy GRC systems speak a language that risk and compliance professionals understand but is foreign to business leaders and operational teams. This disconnect relegates GRC to a cost center rather than a value driver. When risk management becomes divorced from business objectives, it loses its strategic relevance and ability to inform decision-making.

   The KPMG survey underscores this point, with 72% of organizations reporting "lack of awareness and communication" as a moderate to strong barrier to effective risk management. This communication gap is a direct consequence of GRC platforms that fail to translate risk information into business-relevant insights.

6. Reactive and Regulatory-Guided

   Traditional GRC moves at the pace of regulatory change, which is invariably slower than the pace of risk evolution. This reactive stance leaves organizations perpetually catching up to yesterday's threats while tomorrow's risks materialize unchecked. In conversations I've had with GRC vendors, they acknowledge this limitation but point to their customer base's regulatory-driven purchasing decisions as justification for maintaining the status quo.

   The consequences of this reactive approach are evident in the KPMG survey finding that only 23% of organizations test and update their resiliency plans more than once a year. As Joey Gyengo from KPMG emphasizes, "The environment we currently operate in demands a holistic and multifaceted approach to risk management to help ensure resilience across the organization. Failing to acknowledge the interdependencies of these risks may lead to devastating consequences that ripple throughout a company."

7. Form-Driven, Non-Intuitive Interfaces

   The user experience of legacy GRC platforms remains stuck in the early 2000s—clunky form-based interfaces that require specialized training and discourage broad organizational adoption. This poor usability reinforces the silo mentality, restricting risk information to specialists and preventing the democratization of risk awareness throughout the organization.

   MIT Sloan Management Review's research on user experience highlights that intuitive interfaces are critical for technology adoption across an organization. Their 2023 article "User Experience is Even More Critical in Business Applications" emphasizes that employee experience with business applications directly impacts overall effectiveness and adoption rates. Legacy GRC platforms fail dramatically on this measure.

The Confession Behind Closed Doors

What's particularly fascinating is how candidly GRC technology providers will acknowledge these limitations in private conversations. During advisory sessions, I've heard CTOs and product managers from leading GRC vendors admit their platforms are struggling to evolve beyond their compliance-centric origins. They recognize the need for change but fear alienating their existing customer base—particularly those GRC stalwarts whose careers have been built around these legacy approaches.

Source: The RiskTech Journal

One CTO at a major GRC provider told me bluntly, "Our platform was designed for Sarbanes-Oxley compliance, not for managing cyber risks or third-party exposures. We're trying to retrofit these capabilities, but it's like turning a cargo ship into a speedboat." Another confided, "Our customers say they want innovation, but when we try to move away from the traditional control documentation model, we get pushback from the compliance teams who don't want to change their processes."

This tension between innovation and legacy preservation has created a dangerous stagnation precisely when organizations need more dynamic risk capabilities.

Integration: The Path Forward Validated by Data

The solution to these limitations isn't abandoning GRC entirely but evolving toward Integrated Risk Management (IRM). When GRC is integrated with ERM, ORM, and TRM—domains that focus on actively managing risk rather than documenting compliance—it overcomes its legacy-driven limitations.

“Our platform was designed for Sarbanes-Oxley compliance, not for managing cyber risks or third-party exposures. We’re trying to retrofit these capabilities, but it’s like turning a cargo ship into a speedboat.”

— CTO at GRC technology provider

The KPMG survey provides compelling evidence for this approach, finding that approximately 48% of organizations have already moved to centralized or coordinated structures for managing risk and resiliency. More importantly, "organizations with centralized structures for managing risk and resilience are more mature in their capabilities to handle disruption than their counterparts." These organizations are also "more likely to have specialized tools to manage risk including GRC, risk reporting and risk monitoring technology with advanced analytics," leading to "greater confidence that their C-suite understands the business risks posed by disruption."

The data shows that integration brings several critical benefits:

1. Connecting risk to business value

   IRM platforms link risk management directly to business objectives, making risk relevant to decision-makers. McKinsey's research on "The future of risk management in the digital era" emphasizes that organizations that integrate risk considerations into strategic planning significantly outperform their peers financially.

2. Breaking down silos

   Integration allows risk information to flow across traditional boundaries, creating a comprehensive view of organizational risk. The KPMG survey found that organizations with centralized risk and resilience structures are twice as likely to have timely data than those with decentralized management structures.

3. Shifting from reactive to proactive

   By connecting with operational systems, IRM enables real-time risk monitoring and predictive analytics that move beyond compliance documentation. According to KPMG, "Advanced analytics, such as monitoring and sensing, scenario analysis, and predictive modeling, are also being employed, with about half of the organizations regularly employing these tools."

4. Democratizing risk awareness

   Modern interfaces and personalized dashboards make risk information accessible to everyone who needs it, not just specialists. Deloitte's "The future of risk in financial services" report highlights that organizations with enterprise-wide access to risk information respond more effectively to emerging threats.

5. Balancing compliance with performance

   IRM recognizes that risk management isn't just about avoiding bad outcomes but also about achieving positive ones. Harvard Business Review's "Managing AI Risks in an Era of Rapid Deployment" demonstrates that integrated risk approaches lead to more balanced decision-making that supports both compliance and innovation.

As Tim Phelps, Risk Services Leader at KPMG, notes in the survey: "Organizations with centralized risk and resilience structures are using specialized tools for the majority of risk processes, much more frequently than those with decentralized structures." This technological advantage translates directly into organizational resilience.

The Evidence Is Overwhelming

“Stakeholder trust is earned when organizations take a fully integrated approach and a cohesive strategy for managing risk and resilience.”

— KPMG's Samantha Gloede

Organizations clinging to compliance-centric, siloed approaches are increasingly exposed in a world where risks are interconnected and evolve rapidly. The KPMG survey is particularly clear on this point, with Joey Gyengo, U.S. Enterprise Risk Management Solution Leader at KPMG, emphasizing that "the interconnectedness and complexity of external risks mean that organizations can't afford to concentrate on risks or processes in isolation."

The future belongs to organizations that can integrate governance, risk, and compliance with active risk management practices across the enterprise. This isn't just about new technology; it's about a fundamental shift in how we think about risk—from a compliance burden to a strategic capability.

KPMG's Samantha Gloede puts it succinctly: "Stakeholder trust is earned when organizations take a fully integrated approach and a cohesive strategy for managing risk and resilience. An organization's ability to be agile in proactively identifying and addressing vulnerabilities before they become problems is what truly moves the needle."

Forrester's analysis in "The Forrester Wave™: Governance, Risk, And Compliance Platforms, Q3 2023" reinforces this view, highlighting that leading platforms are increasingly focusing on integration capabilities that connect risk management with broader business objectives.

GRC needs IRM because management without integration is just another silo in an already fragmented risk landscape. The vendors know it. The forward-thinking practitioners know it. The data confirms it. Now it's time for the entire industry to acknowledge it and move forward together.

References

1. KPMG Risk & Resilience Survey, March 2025

2. PwC, "2023 Global Risk Survey: Turn risk into opportunity today," 2023

3. Gartner Peer Insights, "Integrated Risk Management Solutions," March 2025

4. Forrester Research, "The Forrester Wave™: Governance, Risk, And Compliance Platforms, Q4 2023"

5. McKinsey & Company, "Resilience pulse check: Harnessing collaboration to navigate a volatile world," January 2025

6. Harvard Business Review, "Managing the Risks of Generative AI," June 2023