Technology has been developed to lessen the barriers to rigorous human life. It makes people and businesses grow and it can be used as an extension to basic human capacity and to invalidate delimitation ex. technology has made social interaction possible to those who have the inability to verbally speak and hear. It allows us to collaborate easily and it makes our work faster and more efficient. In the recent Wall Street Journal Article, it has been reported how a utility is facing a $2.25 billion penalty for alleged Federal and state noncompliance of regulations. In today’s business environment where GRC Software has to be rooted in the organization’s DNA, how does an organization keep up with such a highly volatile and regulated market?
The answer is automation, automation and automation.
There is a perception that the use of technology or opening up to automation makes room for more capital expense. The question, is automation cost-effective? Let me share with you my answer to this question during the recent Webinar that we have conducted:
If you read most of my blogs, you will notice that I am a big advocate of regulatory compliance automation. If you look at the historical data across multiple industries and multiple technology based business process automation implementations, the data clearly indicates automation helps in scaling the organization and in some cases it is very cost-effective. So, the short answer is that automation is highly cost-effective. Recently, KPMG did a research that shows most of the regulatory compliance is done in silos. You have various functional departments managing compliance through multiple tools. I have seen as high as six or seven tools by one division, Imagine six or seven departments using different tools. If all of them are using different tools, they definitely have multiple people trying to manage business process and data through various tools. I had a conversation with a VP of Risk Analytics of a large financial services firm. She said, she has only one person managing Sharepoint to manage the workflow just for her group and there were 5-6 other supporting groups that funneled the data to the chief risk officer and most of the data and reports were manually done in Excel. You can really do the math over overlapping costs.
If regulatory compliance is automated through a single platform, it is not only cost effective, but it also increases the performance of the company with more efficient and timely reaction to mitigate your risks. Further, the ROI does not just comes from overlapping hard costs but the cost of timely non-compliance can be a huge factor that should be weighed into the ROI calculation.
The use of technology gives way to focusing time on valuable resources. And although not all processes can be automated – like the Gathering of the regulations is still going to be a manual process; translating the regulations and standards is still going to be a manual process – technology can be considered as a catalyst for growth and performance.
Once predominantly seen as an expense, technology is now viewed by more business leaders as a worthwhile investment and a source of strategic advantage. Additionally, the advent of cloud-based technology offers more affordable alternatives for mid-market companies as they work to drive growth in their organizations. Further, it is not simply a technology tool; it is a way to rationalize risk management and controls, giving management the information they need to improve business performance management Systems and achieve compliance Management solutions .
In an organization, there will always be resistance to change, the resistance is not the technology, it is the people’s mind set and sometimes it creates factions brought by the different views of the people involved in the decision making, however, when the benefits outweigh the cost, it will take you to a great business solution.
Vertical integration of your Regulatory Change Management Software departments through one platform should lead to risk data that a head of risk can trust. Not only that, think about this way – if your organization is not going to be able to trust the risk data, react timely to changes and risk have high cost to risk management software, compliance, you may be at a disadvantage compared to your competitors if they are leveraging automation. So are you willing to provide your firm a competitive advantage or a competitive disadvantage?
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