When it comes to data mining, there just might be gold in those compliance hills of yours. Up until now, responding to regulations and compliance has been seen merely as the cost of doing business. But in recent years, some savvy organisations have discovered that the compliance data they collect can in fact be repurposed to provide some valuable insights.
What are the opportunities to build trust and value through compliance data and how do you leverage the information to make the most of them?
The value of trust.
From the earliest forms of commercial transactions, trust and reliability have played an important role in the relationship. Brands, products, and services perceived as trustworthy are far more likely to attract and retain customers. A public misstep, however, can cause damage to a brand that may take years and years to repair.
This pressure to behave responsibly has compounded in recent years with a much greater focus being placed on businesses to respond to global challenges such as climate change, diversity, and economic inclusion. Now organisations are being asked to demonstrate that they can not only be trusted at a commercial level, but they can also be trusted to do the right thing at a societal level.
How digital has become trust’s double-edged sword.
The digital age has had a profound effect on the transparency of corporate behaviour. Social media has made it much easier for the news of poor customer service or bad business practices to be quickly and widely shared. On the other hand, technology has also enabled organisations to be better informed about their end-to-end supply chain so they can more easily discover and address issues.
But, at the same time, privacy scandals and data breaches have led to significant erosions of trust for those businesses affected by them. And the greater transparency of corporate practices in this interconnected world makes getting it right absolutely vital.
There’s a tendency for corporate leaders to balk at regulations. To argue that governmental or other oversight stifles innovation and has a negative impact on productivity. In a recent survey, 36% of chief executives ranked overregulation as the top threat to their organisation’s growth prospects.
It’s certainly true that the impact of laws and regulations is increasing, and businesses’ compliance budgets have had to climb to meet their requirements. The tendency has been to simply meet the minimum legal requirements and write it off as the cost of doing business.
A far better approach is to find ways to utilise the data that’s already being collected and repurpose it to provide insights, opportunities for innovation, and competitive advantages.
Opportunities for improvement.
Technology offers the opportunity to significantly reduce the cost of compliance. Not only by reducing the cost of the process itself, but also by reducing the likelihood of costly compliance breaches.
Take contractor management, for example. Substantial efficiencies can be enjoyed through automating the process of onboarding and checking the necessary documentation of contractors. The benefits speak for themselves. Up to 200 man hours saved per contractor and an 80% reduction in compliance cost, at the same time you enjoy a 72% reduction in compliant risk.
Other areas of compliance can benefit from technology too. Sophisticated analytics, data integration, intelligent automation, and other emerging technologies are going to reduce the cost of compliance processes and make them more efficient and accurate. And by removing time-consuming manual work, staff can be redirected to more valuable tasks, such as spotting potential problems and correcting those issues before they become compliance breaches.
Once you stop seeing compliance as a burden and start seeing it as an opportunity, it allows you to align it with your organisation’s purpose and values. Instead of just reducing greenhouse gas emissions to meet an imposed target, for instance, a business could investigate ways to move significantly below that target. Not only would that offer a ‘good news’ story that would encourage customer loyalty, but it also insulates the business from having difficulty meeting any potential future requirements.
The human factor.
It’s worth considering human behaviour when designing compliance processes. Not only does this reduce the risk of non-compliance, but it also helps ensure that individual staff members understand the purpose of the processes.
A major supermarket, for example, focuses on human behaviour when conducting compliance audits in the area of food safety. Rather than just checking the food’s temperature when it’s displayed, they observe the entire process of food preparation to ensure all food temperature and safety processes are being followed. Data is collated to discover which stores tend to have more problems and therefore potential risk. The goal is to look for trends that can help identify whether there’s an underlying problem in the process and proactively take action to minimise risk.
The ability to collect large data sets offers the opportunity to identify common problems and find ways to mitigate the issues. Take supply chain compliance, for example. The requirements for addressing modern slavery risk in supply chains are increasing. The Modern Slavery Act requires large businesses with revenue of A$100m or more to publish an annual Modern Slavery Statement. While there’s no financial penalty for not lodging one, the increasing social scrutiny is fast becoming a larger penalty. So, as well as satisfying the requirements of the Modern Slavery Act, you can use the data you gather to not only have something to measure your improvement against, but illustrate how your organisation puts a priority on caring for the safety and employment options of staff.
Walk the walk and talk the talk.
By embracing the value and potential benefits of compliance, your actions demonstrate what your organisation stands for. So, make sure people know about it.
Make it clear to your staff members, customers, and investors what you’re doing to meet compliance requirements and, where possible, exceed them. In many cases, the public’s expectations are higher than the law requires. Customers may have agreed to the sharing of their data by clicking the yes button at the end of a terms and conditions page they didn’t read, but that doesn’t mean they won’t react badly if their privacy is abused.
Use compliance data as the start of a journey to build a relationship based on responsible behaviour with your customers and the market. Because whatever it is that you’re selling, your brand’s value depends on selling trust along with it.