In 2005, AMR Research released a study predicting the cost of compliance over the following five years would reach the jaw-dropping figure of $80 billion, and that the average company would spend (gulp) approximately $500,000 on compliance-related activities. Now that we find ourselves in 2010, I wonder what the actual and final tabulation is at the culmination of that five-year period?
True, this new era of more stringent regulatory compliance mandates has heaped on a new layer of operating costs. However, savvy companies have used this opportunity to improve their businesses, streamline processes and reduce risk exposure. As a result, many companies have gotten way more out of it than they’ve put into it. In fact, it’s reasonable to believe that companies weathered (and are weathering) the recent economic storm much better, thanks in part to greater operational visibility and efficiencies ushered in by compliance requirements. Ironic isn’t it? Even more ironic when you consider that compliance-related activities have been a catalyst for job creation, which especially in the manufacturing sector, is key to overall economic recovery. Perhaps compliance, which rode in on a dark horse with nostrils flaring, has actually been our salvation?
While we ponder that, I’ll add the caveat that our work isn’t done here. While many companies have had successes in implementing a compliance framework, which at its core is about automating processes to ensure the right process is followed each and every time (and logged, tracked, etc.), the focus has been on the “low hanging fruit” – processes that are fairly standardized, iterative and easy to template and automate.
The harder part is tackling areas and activities that are more ad hoc, where there’s a heavy human aspect, and where it’s harder to define a workflow. And yet, these tend to be productivity black holes – where information workers are saddled with multi-tasking -- think change management, customer complaints, and returns management, etc. Due to their hoc nature and the ad hoc approaches that are then taken within the organization to address them, these areas also expose your organization to risk. So formulating a process and employing the tools to translate this electronically -- this is where real and tremendous cost savings lie along with a heap of risk mitigation.
Looking for more best practices on compliance? View our recent webcast, Building a Better Framework for Compliance Management, for the Medical Device and Diagnostics industry with Judy Meritz Shareholder with Baker, Donelson, Bearman, Caldwell & Berkowitz, and Epicor customer Brandon Murch, with Aligned Medical Solutions.
Posted by Christine Hansen, Manager, Product Marketing, Epicor