Many of us have heard the phrase, “Quality is a journey, not a destination.” If this is remotely true, then the waypoints on this journey are better products, happier customers and lower costs all of which lead to business success. It is easy to repeat the journey metaphor in the spheres of worker health and safety along with corporate sustainability, either of which are proven paths to business success. So, if we accept that environment, health and safety and quality (EHSQ) strategies are journeys toward business success, then it makes sense that compliance is the road map helping you to get there.
In business, compliance means conforming to rules and regulations. These could be in the form of laws, policies, standards or internal guidelines. Within any organization, private or public, compliance management describes how an organization plans and executes for the purpose of conforming to the required rules and regulations. Compliance may mean different things within different industries located in different regions, but at the core, companies must adhere to ALL required regulations, directives and standards and be able to prove the fact to all appropriate regulatory entities. It is common to categorize the different types of compliance based on the purpose of the regulations.
Healthy and Safety Compliance – Health and safety regulations exist to improve employee safety, reduce workplace risks and create safer working conditions. There are different health and safety regulations in different jurisdictions around the world, e.g., the United States Occupational Safety and Health Act (OSH Act), EU Directive 89 and ISO 45001.
Quality Compliance – Quality compliance ensures that the products in certain industries are safe for consumers. Companies that adhere to key quality regulations such as ISO 9000 are rewarded with happy customers, repeat business and lower costs.
Environment Compliance – Companies around the world are prioritizing sustainability strategies to protect people, the planet and achieve their own ESG goals. Over the last decade, almost every country has tightened environmental controls by introducing more regulations while actively enforcing them.
General Business Compliance – In addition to the regulatory requirements that companies confront based on industry or geography, there are additional general business rules and regulations governing important business activities such as accounting practices (GAAP), data privacy (GDPR), financial reporting (Sarbanes-Oxley), antitrust (Sherman Act) and employment practices.
The Cost of Non-Compliance
The benefits of compliance are easy to understand. It keeps a company on the right path and helps them reach their goals of business success. But what are the effects and/or costs of non-compliance and is cheaper to just plow ahead?
The cost of EHSQ non-compliance is a function of many variables; external factors such as fines, litigation, criminal charges and damage to the company’s brand or reputation can cause direct monetary damage. In addition, there are many internal issues such as worker accidents and incidents, product recalls, business disruption and productivity loss that can impact a company’s bottom line. The average annual cost of non-compliance to business is around $15 million, whereas the average annual cost of compliance is only around $5.5 million.
The 5 Steps to Compliance
Achieving and maintaining regulatory compliance is a lot of work. But no matter what a company does, where it operates or what products and services they offer, there are five basic steps to achieve regulatory compliance.
- Understand the regulations – Applicable regulations and directives depend on your company’s operating location(s) and line of business. But simply understanding the rules up front is not sufficient as the laws, policies and regulations that are important for your company are constantly changing.
- Plan how to comply – Once the applicable required rules and regulations are known, you need to plan on how achieve compliance. What staffing, equipment, policies and processes are required for your company to meet its compliance goals?
- Implement the plan –The more planning you do up front, the easier it will be to implement the plan and determine the KPIs required to measure its success.
- Track the progress – As with any business initiative, it is important to track the results of interventions so that they can be adjusted and/or improved.
- Update and improve – Compliance regulations and directives are changeable, but so too are the goals for any business. Analyzing the progress for the planned compliance efforts and how they apply to external regulations as well as internal business goals creates a win-win opportunity.
Intelex Software Simplifies Regulatory Compliance
End-to-end compliance management can be a monumental task, but software can simplify it while making it more effective and efficient. Intelex delivers a comprehensive suite of proven compliance management software applications that are fully integrated with the core EHSQ platform and help make regulatory compliance easy and automatic.
Regulatory Content Gateways – Out-of-the-box integration with regulatory content from Enhesa and RegScan makes it easy to understand which regulations are applicable for your company.
Document Control Software – Simplify compliance reporting and audits by ensuring that the correct documents are created, approved and stored.
Compliance Automation Software – Automate compliance document analysis and understand your company’s compliance profile.
Compliance Tracking Software – Simplify the assessment, monitoring and reporting workflows and improve your company’s compliance efforts.
Audit Management Software – Centralize and streamline compliance for all operating jurisdictions and keep your organization “always audit ready.” Regulatory compliance takes a lot of time and effort, but Intelex can make it easier. Learn how Intelex’s suite of regulatory compliance applications can help your organization achieve its compliance objectives and help your business to succeed.