What Is Compliance Management System?
Compliance Management System is the process of complying with government laws and regulatory requirements that apply to your industry. These requirements can change, sometimes rapidly; It is therefore critical to implement flexible compliance risk management in your operations.
Without a robust compliance management program, your company may fail to meet government requirements, resulting in fines, offline time, and loss of revenue. In addition, non-conformance often worsens exponentially over time, so it is important to be persistent in your efforts to meet industry standards.
What is a Compliance Management System (CMS)?
A compliance management system is a management framework with integrated tools, documentation and controls that make compliance hassle-free. By automating compliance procedures, it saves you from the risks associated with non-compliance.
From understanding compliance requirements to training employees and preparing you for compliance audits, CMS ensures that compliance becomes part of the organisation’s processes. With a CMS in place, disruptions can be reviewed quickly and remediation initiated immediately.
Importance of a compliance management system :
Compliance management is important because non-compliance can result in fines, drag you into legal proceedings, damage your goodwill, revoke your certification, and have consequences that can feel like a bombshell. A compliance management system acts as prevention rather than cure.
It lays the foundation for establishing a rule-compliant system through guided procedures, automation and constant monitoring. Each is tied to the organisation’s compliance goals and there is centralised management of overall progress.
Three Important elements of a Compliance Management System:
1. Board of Director Oversight
Your company’s leaders shoulder a lot of responsibility, but compliance should always be a priority. Having a compliance system that is implemented from top to bottom across the organisation can help emphasise the importance of compliance to the rest of your organisation’s employees.
Additionally, senior management can bring the expertise and experience needed to refine your compliance effort and help your organisation achieve its long-term compliance goals.
Senior management must have a clear vision for their compliance expectations and communicate them clearly through communication and training to employees and third-party vendors or contractors.
These efforts are often led and overseen by a compliance officer or chief compliance officer. The management team is regularly updated on the status of compliance and receives reports of compliance issues that require tactical or strategic changes.
2. Compliance Program
Compliance is a continuous process and it is necessary to develop a list of guidelines to maintain compliance in the long term. A compliance plan will serve as the backbone of your compliance management system and will be the hub from which all your compliance controls and countermeasures are planned, designed and implemented.
Most of these plans are documents containing policies, internal controls, compliance standards, and processes maintained by leadership and serve as references for employees to use as benchmarks for their work.
The team responsible for the project can assign tasks to other employees and monitor workflows and communications to ensure these actions are implemented. The team receives regular and consistent reports and is also responsible for providing necessary employee training programs to ensure employee compliance.
Properly planned training not only helps your employees stay up to date with government regulations, but also improves your organisation’s overall security by making your employees’ education more secure.
3. Compliance Audit
Compliance audits are a very important part of all industries. An audit involves having an independent party review your company’s compliance with both internal policies and regulatory requirements.
A report is compiled to provide leadership with the information needed to maintain compliance and identify and mitigate compliance risks. Throughout the audit, an external party (auditor) will examine and evaluate your systems impartially.
Advantages of Having a Compliance Management System in Your Company :
1. Increased brand visibility
To maintain your company’s reputation, you must demonstrate to your customers that you are committed to creating a consistent brand image. One of the first things users notice is their commitment to security and proven responsibility and reliability.
By implementing Compliance Management System software (CMS), you demonstrate your commitment to user protection, thereby equipping your organisation with these characteristics. Making compliance a priority will make it easier to attract and retain customers and create employees who are eager to work with you, increasing your overall efficiency and productivity.
2. Reduced risks
Failure to fully comply with the regulations brings with it various catastrophic risks. Companies can find themselves embroiled in lawsuits, which often result in large fines to governing bodies and payments to users whose data has been breached.
In addition to the resulting costs of litigation, the cost of the process can also be draining, especially since these cases are often long and drawn out. This money can be better invested in the growth of the company, and big losses can cripple your company in the long run.
3. Decreased costs
Investing in compliance management not only helps reduce the legal costs of non-compliance – it also provides a return on investment by reducing operational costs. Although the initial investment may feel expensive at first, the investment is clearly worth it once you start reaping the benefits. Integrating the computer into your workflow is a quick and easy task to meet compliance standards without relying on expensive human resources.
You can also implement automation in your compliance system to reduce the risk of human error leading to oversight. Thoroughly educating your staff eliminates the need to hire additional specialised staff, allowing you to direct the resources you spent on new employees to new projects.
4. Improved efficiency
Implementing the right strategies or using Compliance Management System software can collect all of your data elements in one, centralised location, making compliance easier to track and manage. Keeping all your sources in one place guarantees consistency of information you publish and retrieve.
Ensuring that all your information is easily tracked and universally agreed upon increases efficiency and prevents time wasted on disorganised data.