Organizations often purchase too much technology in the hopes it will solve their problems. The other extreme are organizations who do not implement anything out of fear of cost and complexity.
A new Nimonik customer recently downsized from an expensive compliance management software. By doing so, they reduced annual costs from $400,000 to approximately $55,000 per year. The customer in question is in the Oil & Gas industry and changed platforms to try and simplify their compliance operations while also saving on costs. The problem they were facing is common to many companies: Many organizations, through a desire to please many internal stakeholders, purchase overly complex and overly expensive software in the hopes it will magically solve all their problems. The reality is that complexity rarely delivers the expected value and you end up spending excessive amounts on maintenance.
At the other end of the spectrum from overly costly solutions, many organizations have not yet purchased a compliance system due to costs, perceived complexity and organizational inertia. Even many large and mature organizations have not implemented a compliance management system or hired the required staff to proactively manage compliance.
The challenge of finding the right-sized solution for your organization is critical – not too big, not too small. To help you make the right purchasing decision, we have prepared some best practices to consider when buying a compliance solution.
Regulations, Laws and Standards
The software should be able to handle the specific regulatory requirements that apply to your company’s operations. It should come with integrated data feeds that cover the jurisdictions and industries you operate in. The software should have a team behind it who can handle the intricacies of the regulatory data that you must manage. It’s essential to research and understand which laws, regulations and industrial standards your company is required to comply with. The software should be able to include relevant documents without external support. We recommend that you start with a robust legal register and audit plan before finalizing a software acquisition. By first identifying the applicable laws, regulations and standards, you can then determine the criteria for purchasing the ideal compliance management software.
As your company grows and evolves, so too should your compliance management software. Look for a solution that can start small, as a pilot project, and then scale to accommodate future changes in your company’s size and operations. As the American fable Goldilocks and the three bears recounts, Goldilocks searches for the porridge that is not too hot or too cold, the bed that is not too small nor too large and the chair that fits her just right. You must find the right sized compliance management solution for you. Organizations searching for compliance management software must strive to find something that is not too big, nor too small, not too complex nor too simple and that has a cost that is just right. Take the time to find the right software that can grow with your business.
Integration & Reporting
Many companies have multiple systems in place that need to work together. Before jumping into a complex integration project, we suggest starting with an independent system. Ensure the system suits your needs and once you are satisfied with its performance, you can pull data from your various systems into a central business intelligence software. Integrating numerous software where users are entering data on an ongoing basis can be a very complex proposition. Even once the integration is done, changes to your systems will be very costly as a change in one software inevitably affects another software. As they say, keep it simple(ish). We therefore recommend that organizations focus on centralizing the data in one business intelligence or reporting tool that allows you to cross-reference data from across the organization.
Though we recommend using a business intelligence tool for robust reporting, any solution you decide to purchase should have some basic reporting and data export functionality. Being able to quickly extract your data and generate simple reports is essential. This allows subject matter experts to rapidly grab the data they need, without having to go through a central team of business analysts.
It goes without saying that the software should be easy to use for your employees and stakeholders, so that they can quickly and easily understand and use the system. We suggest having the end-users drive the purchasing decision. We blogged back in 2015 about finding the best EHS compliance software for your organization and putting users front and center.
Compliance management software must have robust security measures in place to protect sensitive company data and ensure that it is stored and transmitted securely. That being said, data security should not be the main driver for your purchase. Occasionally, companies will exclude options due to technical security issues that could be remedied with cooperation from the vendors.
Evaluate the cost of the software in relation to the potential benefits to the company. You can achieve significant long-term savings through efficient compliance management and by avoiding problems before they occur. Try to estimate costs by looking at your compliance record and industry trends. Ensure you include direct costs and indirect costs such as internal resources to remedy compliance issues. Often the internal resources and organizational chaos caused by a compliance problem are much larger than any potential fine or penalty.
Right Size Compliance management Software for your Organization
The two extremes that we see are companies that have no compliance system in place or companies that have overly complex and costly systems. The organizations that bought something too big and too complex are often in that position because they waited too long to make a purchase, failed to test smaller systems and then outsourced the purchasing decision to a committee or an IT services firm which made a feature wish-list that was long, contradictory and did not take into consideration the ability of the organization to implement, absorb and maintain the system.
Nimonik recommends finding the right size solution for you and especially aiming for a scalable solution that has the flexibility to match your corporate needs. If you have any questions or would like a discussion about Nimonik, please contact me.