Regulations for a specific product or service vary depending on the type of item. They are also different across different countries and states. These regulations are mostly in the line of consumer interest, are environment-friendly, and prohibit malpractices. Regulatory bodies oversee, inspect, and help to maintain these standards, updating their requirements every few years.
The Dangers of Non-Compliance
Before we know the importance, let us look at how it has helped businesses rise, and how they crumble with failure to adhere to them, as put forth by regulatory bodies.
Regulatory bodies have managed to break or shape giant corporations. A consumer is more keen on buying genuine products that are compliant with standards. For example, women know the difference between hallmark gold and one that doesn’t bear the hallmark. For food, health and safety standards are of the essence. A few years back, Maggi, a giant company of the Nestle conglomerate, lost trust and market share, since they could not comply with the standards. However, it was just a small batch that failed to meet the standards, whereas the entire corporation felt the brunt of the blow. Maggi has yet to recover from this massive blow, despite the following regulations.
Avoiding the scenario would have been possible had they used compliance management system software.
Importance of Regulatory Compliance
The reasons for regulatory compliance are as follows:
The business world has grown increasingly competitive, and every company wants to outdo the other. Accreditation from the regulatory body could help companies get an edge over their competitors by stating that they follow the ascribed standards, which in turn can increase their brand value.
2. Genuine and Safe Products
The regulations are consumer-centric, and so, consumers feel safe using the products manufactured by companies that are regulatory compliant. Hence, customers trust your product and buy them.
3. A Better World
Following regulations helps to create a better world for people around us. It also solidifies our position as the champion of a worthy cause and increases our likeability among people. Conversely, not following rules will affect our sales and delivery chain, since lesser people will be inclined to associate their name with our brand. A good example is how Tesla Motors, a clean energy car company is beating gas-powered car companies in the United States, that had been in the market for times immemorial.
The Challenges of Regulatory Compliance
Regulatory compliance is very rewarding to a company. However, the application can be a bit difficult. One can often get lost with the ever-changing rules of the regulatory board. Moreover, you also need to comply with these rules and make an in-house inspection of products.
Furthermore, rules and regulations change based on demography, and hence, their application might be difficult.
We need a tailor-made system that helps us stay within the boundaries of regulations. The solution to all of these problems is compliance management software.
What is Compliance Management System Software, and What It Can Do for You?
Compliance management software helps organizations in complying with the legal, industry, security, and other regulatory issues. In other words, compliance management system software helps companies, organizations, and businesses meet regulatory requirements. The advantages of using a compliance management system software are listed below.
a. Compliance Reporting
The compliance management software continuously monitors and reports key performance indicators linked to essential business processes to ensure compliance with rules, standards, laws, and regulations issued by the regulatory authority or government.
b. Audit Management
Compliance management software helps in simplifying and organizing the workflow and collaboration process of an organization for compiling audits.
c. Monitors Transactions
They provide automated tools for continuous monitoring of financial transactions and transactional applications to reduce audit costs.
d. Transition Management
As new regulations are rolled out by the government or regulatory bodies, the software can track and find the feeds. It provides organizational tools that allow the user to easily adopt changes based on new regulations
e. Task Management, Real-Time Alerts, and Workflow
The compliance management system software can assign tasks to individuals and track their progress, and deliver real-time alerts whether the task is undergoing, started or failed, thus enabling accountability in staff and nipping the problem in the bud.
f. Policy and Enterprise Risk Management
The compliance management softwarestores policy documents, and portfolios in an easily accessible location so that everyone can familiarise and check for updates. The software classifies the risk level, allowing one to focus on high-risk tasks.
Hence, we can see that the advantages are numerous when we are regulatory compliant by using the right technology.