Leading organizations that treat compliance as more than a checkbox exercise use data to uncover not just the numbers, but why certain trends are occurring and how they might impact the business.
While healthy compliance programs thrive on consistency, they also need to be agile enough to evolve alongside ever-changing policies and regulations. Effective use of data is the key to this agility and is at the heart of all successful compliance programs.
Compliance is an essential function that must be integrated enterprise-wide — from managing external regulations and internal policies to creating thorough employee training. The right data can help leaders gauge the state of their organization’s culture — a powerful indicator of corporate integrity.
As an example of the power of compliance data, an increase in incidents reported could indicate a positive shift in corporate culture, with employees feeling more empowered to speak up about workplace questions or issues. However, it could also indicate an emerging risk within the organization that needs to be addressed.
Correlating this with other key data points, such as region or site-specific reporting volumes, can help identify key drivers. Understanding these critical root causes is essential to compliance not just because it mitigates risk, but it helps organizations evolve and become stronger. Yet, to reach this level of analysis, data insights must be fully discoverable.
Uncovering deeper insights
Using technology to aggregate data and unearth insights isn’t new. Countless industries have matured their use of data to uncover deeper business intelligence for competitive advantage.
For instance, in the early 2000s, Walmart perfected the science of using data to optimize product assortment, leveraging historic and predictive customer demand models to ensure the right product was in the right place on the store shelves at the right time, maximizing profits in the process. And Major League Baseball used comprehensive data to create the “Baseball Encyclopedia,” a compendium of researched statistics that replaces intuition with empirical data analysis so that winning teams could be built with modest budgets.
We’re now seeing a similar wave of change in compliance, with organizations digging deeper into data so compliance officers can rely less on their own intuition and more on the factual insights and trends they see firsthand. Especially today, amid increasing and ongoing company data breaches, long-awaited ESG standards and regulations and mass employee resignations, it’s more important than ever to ensure that organizations use data to take a proactive approach to compliance.
Here’s how organizations can successfully leverage compliance data.
Compile and compare data sources to create a strong data foundation
When it comes to compliance, the more data the better. This means that compiling and comparing data from across sources is the best way to correlate data points to uncover important trends and predict potential risk.
For example, an increase in internal reports that come in via the organization’s various reporting systems — phone hotlines, online portals, or directly to managers — may appear to signal poor compliance and organizational issues. While more reports may seem to suggest that more problems exist, an increase in reporting data is a good thing, and essential to evolving compliance programs.
In fact, organizations that receive more reporting data from their employees perform better in almost every measure. They are more profitable, have better governance structures and have healthier workplace environments. This is largely because more reporting data gives the organization a fuller view of its compliance programs and culture.
Embrace digital transformation
Gathering, monitoring and assessing data is a strong catalyst for digital transformation. It can move organizations beyond antiquated processes where spreadsheets, or even notepads, were used for policy management, compliance tracking, reporting and more. This level of digitization helps organizations effectively scale and mature, removing business silos.
Moreover, digital transformation can grow automation that enhances productivity, removes human error and allows professionals to focus more on high-value aspects of their jobs versus manually entering and analyzing data figures.
View compliance holistically
There aren’t many roles that truly think about business compliance from end to end, and that’s a problem. Transforming how data is used can break down data silos that naturally build up over time.
For instance, compliance professionals typically only look at data that falls under the compliance umbrella and sometimes don’t consider how other factors within the business — such as HR or even IT data — can impact their program. When data becomes available across business units, organizations can draw correlations between teams and answer critical questions about the state of their business.
Uncover program gaps and successes
Enhanced and consolidated data provide a real-time snapshot of how effective and mature a compliance program is. Further, they reveal micro-trends that can contribute to macro-level change. Having a more comprehensive grasp of both micro- and macro-level trends is what moves the needle for enhanced compliance programs and proactive risk management.
Similar to how insurance companies rely on actuaries to determine risk for liability, organizations can use their compliance data to fuel effective decision-making and proactive risk management. Understanding risk signals, such as incident reporting volume, is a significant factor in closing compliance gaps and building a successful program. The output of this exercise is a program that abides by laws and regulations, creates a safe and ethical work environment, protects the business against internal and external risk, and much more.
Compliance is transforming with the help of data and the ability to discover risk signals and causal mechanisms. Those at the cutting edge of this movement are implementing more robust data protocols in compliance, allowing them to more easily contextualize and grow confidence in their business decisions.
While data has always been essential to compliance, leaders that go beyond treating it as a checkbox exercise and dig deeper are maturing their compliance programs and helping build ethical corporate cultures that, in turn, grow business success.
Bob McCarter is chief product and technology officer at NAVEX Global.
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