There are many benefits to transforming your compliance to stay ahead of the rapidly evolving regulatory landscape.
However, there are a few costs and risks to be considered in the process of improving your compliance management.
What are these and how can your business handle them?
Over-simplification
It’s easy to just focus on the visible costs, but there could also be underlying costs to consider. The rationale for change becomes even more compelling once they’re properly understood.
For example, defect costs are often seen as the value of the defective part, but the true cost is usually more: The defect + replacing or correcting the defective part + time lost.
Optimization
The cost of retiring existing systems may offset the cost of a new, more optimized approach. Though the initial cost of retiring redundant and suboptimized systems and replacing them with more efficient, centralized approaches may seem high, it will pay dividends in the long-term.
Insurance
The cost of an adverse event is often not factored into insurance. Smaller investments that ward off large risks should be characterized in terms of avoided costs and potential costs.
In the United States, insurance premiums are calculated on recordable accident rates, so reducing accidents over time can reduce premiums.
Business costs
As governance becomes more global, standards like the UN sustainability index increasingly become a driver across the supply chain, defining partnerships for large enterprise customers.
Adhering to ISO standards can support certification and help secure a company’s position in the supply chain.
Systems
Comparing risks across different sites with varying systems can be difficult without a standardized baseline. Align systems across sites for a holistic view of risk levels across the business.
Calibration
Everyone measures risk differently. Unless your business consistently defines risk assessment parameters, significant risks can remain hidden.
Invisible systemic risks
Exceptional risks (high single point RPN) are obvious. Lower impact risks may be less obvious and can go unnoticed if they’re not purposely sought out. Calibrate your RPN so systemic risk isn’t masked.
Avoid risks with WatchList
Learn more about how RegScan’s WatchList tool can help you avoid non-compliance risks with quick access to changing regulations.