Sometimes it seems as though compliance has always been a part of our world, but when did it really enter our lives? The roots of the regulation we know (and dread) today date back to the 20th century, when the first public agencies like the FDA were formed. Regulation made its way further into the business world following high-profile scandals. One of the most famous such scandals is the Enron accounting scandal, which inspired the Sarbanes-Oxley Act. The need for internal procedures to detect and prevent fraudulent behavior has led to regulations that today cost organizations an average of $5.47 million.Non-compliant behavior almost triples the cost.
Internal compliance isn’t just costly; it can also be quite complicated. Luckily for organizations worldwide, technology can simplify internal compliance processes and make them faster, clearer, and more accurate. This article will discuss some of the main challenges that companies must face in order to be entirely compliant with regulations, and how technology can help them achieve this goal.
Internal conflicts: The main challenges of internal compliance
While the following list doesn’t cover every challenge involved in maintaining internal compliance, it includes some of the key challenges companies must overcome – challenges that technology can be really helpful in streamlining.
Challenge #1: Building a culture of compliance
It takes a village to stay compliant. Companies must educate and train employees across the organization, to get their full cooperation. This requires clarity as to how everyone is expected to function and what needs to be reported. It’s a difficult task that involves delivering a clear message to many people, training them, monitoring effectiveness and regularly updating company policies and procedures.
Challenge #2: Transitioning from a reactive to a proactive approach
It’s not enough to respond to violations as they occur. Companies should build a system that identifies any risk to the organization’s compliance level and handles it immediately. For this to work, a new state of mind and a high level of visibility are required.
Challenge #3: Communicating results
Communication is key, and companies should communicate the impact of compliance internally, sharing relevant developments and updates across the organization. This requires the definition and tracking of consistent metrics to compare apples to apples and show a clear correlation between internal regulation and positive outcomes over time. This supports the company’s cultural efforts and gives management the ability to run the company with confidence. Research shows that this is a top priority for compliance teams that work hard to demonstrate their impact. Over 80% of companies communicate results regularly within the organization, and 73% initiate PR or other communication strategies.
Challenge #4: Resource management
Compliance is an expensive and time-consuming effort. Companies need to strategize and manage the resources they invest in achieving and promoting it, while avoiding wasteful moves that bring little results. With regulation constantly changing, companies’ strategy must be flexible and agile; otherwise, significant efforts and investments will be in vain.
Innovation to the rescue: How technology helps solve internal compliance challenges
Technologies such as explainable AI and process mining help solve the above challenges and simplify compliance procedures. They increase efficiency and accuracy levels while offering a more cost-effective path. Here are just a few of the main internal compliance related capabilities enabled by today’s advanced technologies:
Compliance is a broad issue that is critical and difficult to manage. The constant changes in regulation, combined with companies’ ever-growing labor force, make this task extra complex. When things get complicated, we need smart technology to simplify and manage the process. Today’s compliance technology can automate and resolve many tasks, bringing companies to a higher level of conformity in less time, effort, and inaccuracies. The high costs that non-compliant status businesses suffer makes this technology ROI-positive from day one.
When you do decide to look for the right technology to help you achieve seamless internal compliance, we recommend that you read our blog post discussing the 7 questions to ask before selecting a GRC solution, just to be on the safe, more informed side.