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3 steps to a Compliance Strategy – As valid now, as ever!

3Steps Compliance StrategySome of my old FileNet friends reading this article will smile… I realised today to my surprise, that it’s over 11 years ago that this simple concept was first articulated, and went on to form the basis of our compliance messaging, transitioned into IBM after the acquisition, and was presented in many conferences and briefings. The result of a quick brainstorm before a breakfast briefing for Bearingpoint, at an off-site annual kick-off session, the picture on the left is a scan from my original notebook where it first appeared, in January 2004. I have evidence of this still being included in presentations as late as 2011. In the world of PowerPoint slides, does that make it a classic?

Now, it may be an old message, but it is as valid today as it ever was. And since I’ve never written about it in this blog I thought it was worth re-introducing it to a whole new audience.

What does a company need to do, to be compliant?

There are three very fundamental and very explicit stages for an organisation to achieve a “compliant” status. These apply equally to every vertical industry, be it Banking, Insurance, Telco, Retail, Pharmaceutical, etc. And they also apply equally, if “compliance” refers to regulatory compliance in a Nuclear plant, financial compliance, or Health & Safety at a local school.

Step 1 – The Present: Become compliant

What do you need to do today, to comply with the rules and meet the regulations? What changes in procedure, what risk controls, what equipment checks, what training? This stage includes designing and implementing everything that a company needs to put in place, to be able to certify that today, it is compliant with each regulation the law currently subjects it to. Implementing this stage requires the company to (a) identify and understand which regulations are relevant and what they are expecting (b) identify possible areas and processes where the company is at a risk of not compliant with the regulations, and (c) implementing any changes necessary to remove those compliance risks.

Step 2 – The Future: Remain compliant

This is the part that is often forgotten, and ends up costing organisations millions in fines: Looking at the future. Becoming compliant is not enough, it’s just the first step. As an organisation, you need to ensure that compliance is sustained consistently in the future. That every system, every procedure and every employee remains within the controls and guidelines specified by the legal regulations or the company policies. At a manual level, this involves regular training for employees and regular testing of all the various controls and devices implemented in Step 2. The best way to implement Step 2 however, is automation. Putting in place systems and processes that not only monitor the company’s compliance, but that enforce it. The less a company relies on individual employees to maintain compliance the less likely it is to fall foul of compliance breaches through human error. Automation reduces training requirements, reduces management overheads, and it reduces wasting operational cycles for testing and reporting.

Step 3 – The Past: Demonstrate compliance

The final part of the process is looking at compliance retrospectively: Are you able to go back to a specific point in time, and demonstrate to a regulator, and auditor, or even a customer, that you operated compliantly. Are you able to shoe what decisions were made, what policies were in force, who made the decisions and what information they had available to them to support that decision? This is all about Records Management and audit trails. It’s about maintaining evidence of your compliance that is complete, accurate and irrefutable. Preparing for that retrospective compliance review in the future, should be a core part of the design of any compliance system implemented today.

So the meme Become – Remain – Demonstrate (or even “AchieveSustain – Prove”, as the alternative version that our U.S. marketing folk seemed to favour) summarises the three key steps that you need to remember about structuring a compliance programme. If you are faced with a new regulation, new management, or even a new mandate to create or replace IT systems for compliance, use these three steps to validate if your compliance strategy is complete or not.

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