If you work in the compliance industry, you’ve probably heard the term ‘integrated compliance program’ tossed around at one point or another. Perhaps it was at a conference (when events still happened), maybe it was in a meeting discussing your program’s goals, or it could have even been in our latest eBook.
Regardless of how you first heard the term, you may still be wondering what a holistic approach is and how integrated compliance solutions can best serve your program. How is taking an integrated approach different from how most compliance programs are operating? Today, we are here to answer all of your integrated compliance questions.
What is an Integrated Compliance Program?
An integrated compliance program is a comprehensive approach to managing compliance, ethics, and risks within an enterprise organization. Compliance, ethics, and risk are inextricably linked and therefore need to be handled in unison by a single flexible and robust technology solution. In order to best manage each of these critical areas of business, they should be viewed comprehensively.
Integrated Compliance Management (ICM) sits at the intersection of IRM and BPM, two well-known Gartner categories. Integrated Risk Management (IRM) enables simplification, automation, and integration of all risk management processes and data. Business Process Management (BPM) is a discipline that uses various methods to discover, model, analyze, measure, improve, and optimize business processes. ICM sits directly in neither of these camps but instead, squarely at their convergence.
Most enterprise organizations create compliance processes around due diligence, conflicts of interest, policy deployment, gifts & entertainment, risk management, and investigations. Yet, typically, these processes are not intertwined in any meaningful way. The majority of compliance processes today don’t speak to each other or share insights, data is commonly not delivered in real-time, and outdated solutions are leveraged to capture critical information. Transforming your compliance program to have an integrated approach can solve these problems and more.
Why Having an Integrated Compliance Program is Important
Establishing an integrated compliance program is essential because of how disconnected and siloed compliance solutions have traditionally been. Not only has this disconnect created countless headaches for compliance teams, but it has also hindered their ability to understand how all of their compliance processes are working in harmony and impacting each other in real-time.
To illustrate this point, consider the following questions:
- What do your conflicts of interest tell you about your risk assessment?
- How does your third party due diligence process impact your overall risk assessment?
- Which risk factors do your compliance processes have in common? And how can changes to one process affect another?
- Do your program assessments yield accurate results if you are not evaluating your compliance program holistically?
These are the exact questions that integrating your compliance program can answer. It’s all about taking individual compliance processes out of silos and uniting them so that the whole is greater than the sum of its parts (a saying that comes from Aristotle, who was definitely referencing compliance programs).
In the real world, most (if not all) compliance processes overlap with each other. They are sophisticated and intertwined operations that should be approached holistically—not in pieces. Approaching each of your compliance processes as a separate entity is essentially like putting on blinders: you are going to miss the full picture.
Benefits of an Integrated Compliance Program
The benefits of taking an integrated approach to compliance management are vast. Depending on where your program stands today, it can enhance your functionality or completely transform your approach. When considering integrating your program, below are a few of the advantages to contemplate.
Powerful Analytics at Your Fingertips
The most significant risk for compliance officers is that they fail to understand what is happening in the organization. That occurs when compliance officers have an incomplete picture of activities: data from only half the operating divisions, key facts missing from a specific allegation of misconduct, and so on. Integrated compliance management consolidates information in an accurate, useful way enabling compliance officers to contextualize that information into broader trends of compliance activity, which in turn will allow for a more methodological and analytical approach to managing compliance. Without effective centralization and normalization of data, none of the powerful analytics is possible in the first place.
Let’s take the example of whistleblower hotlines, a vital tool to collect reports of misconduct. Assume that in your organization, most reports of misconduct come from employees speaking to managers. An integrated compliance management program can highlight that fact and gather all types of reports into one incident management system. By having a single source of truth, compliance officers can review reports of misconduct with a complete understanding of what is going on. An integrated platform can even connect your case management process to your conflicts of interest process. This connection would flag any conflicts related to specific cases, shedding additional light on the investigation and allowing you to take appropriate corrective measures.
Better Risk Management
Intelligently designed compliance processes (read: risk controls) are crucial components of an effective compliance program. However, these controls are bound to fail from time to time, which is why any robust compliance program must include reliable reporting and analytical functionalities. These components are the nervous system of a compliance program bringing potential concerns about misconduct, changes in risk factors, and risky trends and patterns to the compliance officer’s attention. Similarly to the human nervous system, reporting and analytics must be ready to encounter stimuli, translate input into actionable intelligence; and relay that information to a central “brain” (the compliance officer). The brain of the compliance operation can decide how best to respond, improve the compliance program, and advise senior leadership on strategic decisions.
Many practitioners have long taken the approach of adequately determining business risks, implementing what seems like the most appropriate controls, and carrying out assessments annually. Yet, what undermines that approach is the length of time between testing and the randomness of the timing.
What should, in reality, trigger those evaluations are real-time flags of changes in risk factors. Compliance departments with advanced data analytics can rely on real-time data feeds to make the association between risk factors across the business to identify changes in risks and instantly bring the need to reassess a control to the stakeholder’s attention. These real-time insights differentiate reactive from proactive compliance. Transforming your program to be proactive can only be achieved with sound data analytics.
Uplevel Organizational Impact
Effective compliance management rests on impactful measurement solutions. Knowing that a program is only as strong as the tools that support it, no compliance department can claim to manage an effective program if it’s unable to measure its impact. Well-designed and well-built compliance processes are only the first step towards operating a robust compliance program; the second step is all about selecting the right compliance solutions to support your vision.
Integrating your approach to compliance requires organizations to leverage cutting-edge technology to unite all of their compliance, risk, and ethics processes under one roof. Leaning on the best technology allows compliance teams to increase their organizational impact by accessing meaningful insights, automating repeatable tasks, and bringing all your compliance data together.
Developing an Integrated Compliance Program for Your Organization
Now that you’ve discovered the many advantages of integrating your compliance program, you might be wondering how to get started. All this knowledge is great, but putting it into practice is where the real magic happens. These are the actionable ways you can begin (or continue) on your journey towards a connected, holistic compliance program.
Our latest eBook, Integrated Compliance Management: The Future of Compliance Programs, covers trends in organizational compliance structures and discusses how you can get started taking a holistic approach. Start reading the eBook now to access these insights and more.