What's the cost of compliance these days?
Of course, nobody knows what how much it costs for business to make sure it complies with an ever increasing number of laws and regulations these days. Much of it is opportunity cost, taking the form of putting expertise to work on compliance when it could be producing value elsewhere. And very little is capital expenditure, but rather time or the purchase of professional services such as accountancy.
This lack of data incidentally makes it very hard for business to argue against compliance creep. Even when researchers try to measure the burden in specific sectors, they fall back on rather general estimates. KPMG's recent survey of the hedge fund industry, for example, concluded that "hedge funds are spending at least USD3 billion on regulatory compliance, including technology, headcount and third-party vendors", but it is difficult to say how they came to that figure.
Time-consuming searches to cross check the validity of reports is often cited as one of the reasons for companies finding compliance regimes so onerous. Even the most thorough and diligent person stands a relatively high chance of making a mistake when collating data from various spreadsheets.
Delivering a successful compliance infrastructure relies on understanding that within an organisation there will be a number of different process requirements and a wide variety of skill levels. Personalising the process to the individual frees up valuable time for everyone in the chain.
Personalisation can be achieved by using tools such as Coracle Skills Spider, a specialised skills gap analysis tool that identifies training requirements, designs individual learning plans and makes use of automated workflows to ensure that individuals benefit from timely reminders and a personal approach.
On the audit side of the equation, locating compliance reporting functions in a secure online environment reduces cost and increases transparency within an organisation, which pleases staff and regulators alike. Being able to demonstrate efficient use of systems can be valuable in a business environment that has seen many industries witness a rapid increase in the use of tenders.
Government tenders are a good example. One element in common between government tenders and private contract tenders is that the paperwork burden and the need to illustrate compliant audit trails has generally increased. If the tendered opportunity is going to rely on the use of, for example, several sub-contractors, then the facility to identify who is and isn’t compliant at any stage of the process is critical. Complex negotiations and tender construction can be undone by simple mistakes and the approach to compliance by many companies can be categorised as risky in this regard.
And what about the graph at the top showing a gap... Is the gap significant? This graph shows the missing information. Imagine that was a skills gap in your company...
For a demonstration of how Coracle have worked with regulated businesses on compliance training and reporting, please get in touch with the team in Cambridge.