How to Ensure Business Process Compliance

Complying with laws that regulate issues such as data security and labor has become increasingly important in business. In addition to heavy fines, non-compliance with these laws can also result in criminal liability. It’s therefore vital for a business to remain current on regulations and day-to-day standards for operating to ensure processes remain compliant. 

However, this process is labor-intensive and even more so when done manually. That’s why it’s not only desirable but also crucial to automate as much as possible. Automating business process compliance allows teams to shift from repetitive tasks to more strategic activities requiring creative solutions.

Below we’ll cover what business process compliance is and how automation makes it more effective to comply with industry regulations and standards.

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What is business process compliance?

Process compliance is the maintenance and regulation of business processes according to established guidelines, whether they’re government regulations, industry standards, or the company’s own policies. 

This practice is essential for the smooth operation of businesses, regardless of industry. Compliance in this context means that an organization complies with all applicable process requirements.

Compliance examples

Most companies must comply with guidelines from a variety of sources. These include organizations that provide standards for many industries, such as the American National Standards Institute (ANSI) and International Standards Organization (ISO). Other organizations provide standards that are specific to a particular industry. In addition, countries typically have many laws regulating industries.

For example, the Health Insurance Portability and Accountability Act (HIPAA) and Sarbanes – Oxley Act (SOX) regulate the healthcare and finance industries in the United States, respectively. The Children’s Online Privacy Protection Act (COPPA) in the U.S. and General Data Protection Regulation (GDPR) in the European Union (EU) also deal with data privacy. Other legislation relevant to process compliance in the U.S. includes the Family Medical Leave Act (FMLA).

These regulations are always increasing and subject to frequent change. As a result, achieving compliance remains a growing challenge for business. This task is particularly difficult for growing organizations that must consider guidelines from multiple countries.

Assume for this example that a company handles financial data in Germany and the U.S. The Deutscher Corporate Governance Kodex regulates these processes in Germany, while SOX covers IT practices in the U.S. for financial institutions. However, these two sources have quite different guidelines for handling this type of data. This issue becomes more complex when political divisions within a country have their own regulations, as is often the case in the U.S.

Organizations are therefore increasingly likely to rely on specialized software or external consultants for process compliance. However, an internal Chief Compliance Officer (CCO) will typically have a compliance team whose job it is to maintain process compliance and review audits. The terms and guidelines of these audits tend to remain dynamic, since they depend on factors like industry, company size, and client data.

In addition, setting up guidelines is a time-consuming task, although they can train the entire organization once complete. In this way, a team can maintain process compliance across business functions. Once an organization achieves this level of compliance, they’re ready for an audit at all times.

Process compliance vs. process adherence

Process compliance may appear synonymous with process adherence, but the two terms are distinct. 

Process compliance, also known as regulatory compliance or external compliance, is governed by entities outside an organization’s direct control. These regulations are legally required and include civil and criminal penalties for non-compliance.

Process adherence, also known as corporate compliance or internal compliance, follows an organization’s own rules. These rules may be based on external sources like industry standards, but they aren’t legally required. Process adherence activities also include internal audits and employee training.

What is process compliance management?

The management of process compliance tasks is one aspect of risk management. It’s a particularly common function among highly regulated industries that facilitates compliance while also mitigating other forms of corporate risk. 

Process compliance management protects organizations from this type of risk by integrating control activities with daily business operations. Like all forms of risk management, process compliance management analyzes and prioritizes risks to mitigate them as much as practicable.

However, process compliance management has a narrower scope than risk management, which also deals with risks unrelated to non-compliance. For example, measures to prevent hackers from accessing intellectual property may not be legally required, but it should always be a business imperative. In this case, these measures would be a form of risk management, but not process compliance management.

Benefits of process compliance

Compliance professionals must constantly ensure that their organization’s processes operate according to its process guidelines. This practice provides the following benefits:

  • Increased trust and reliability
  • Risk management
  • Reduced errors
  • Enhanced quality

Increased trust and reliability

Building long-term relationships based on trust requires organizations to demonstrate their level of commitment and responsibility. This requirement means that companies have to play by an established, standardized set of rules that their staff are trained to obey. 

Compliance with legal requirements is particularly important for building trust, so it must be part of an organization’s normal operations.

Risk management

A business’s reputation is based on its interactions with external entities such as clients, partners, and vendors. Standardized, compliant processes are essential for creating predictability, structure, and organization, which is essential in these relationships. Even minor errors can damage an organization’s reputation, which is a significant risk without proper compliance management.

Reduced errors

Decision-making can be prone to inconsistencies without a clear compliance framework. Compliance enforces standardization and processes, leading to a reduced chance of errors. 

Most risks are internal to the organization, so compliant processes are highly useful in identifying them before they can impact business performance.

Enhanced quality

The value that companies deliver to their customers is closely tied to their brand value. 

Compliant processes help shape the guidelines that define the brand experience and regulate business operations. In addition to developing these guidelines, companies must also follow them to deliver quality products and services.

What are the main KPIs to track process compliance?

Modern organizations routinely use metrics to measure the performance of various operations. The following key performance indicators (KPIs) are particularly useful for tracking process compliance.

  • Mean Time Between Failures (MTBF): This KPI measures the time since the last system failure, usually in days. A high MTBF indicates strong system protection.
  • Percent Difference in MTBF: Organizations may compare the differences in MTBF between data protection systems on a monthly basis. A significant difference in these values strongly indicates the need for greater risk remediation.
  • Mean Time to Repair (MTTR): This KPI measures the average amount of time needed to fix a problem to the point that it restores normal operations, usually in hours. A high MTTR could indicate inadequate staffing or other resources.
  • System Availability: This KPI is the ratio of time that a system was available to all users with the time that it should’ve been available. A low value indicates a need to remediate that system’s data accessibility.
  • Percentage of Critical Systems without Up-to-Date Patches: This KPI is the ratio of critical systems that haven’t been updated recently with the total number of critical systems. A low value indicates a greater risk of common vulnerability and exposure (CVE) attacks.
  • Percentage of Downtime Due to Scheduled Activities: This KPI is the ratio of time that IT staff spent on scheduled maintenance with the total time for that time period.
  • Percentage of Scheduled Maintenance Activities Miss: This KPI is the ratio of computers that weren’t in service during a given time with the total number of computers. A low value typically indicates a greater need for employee training on compliance or more staff.

How do you ensure process compliance?

The first step in implementing a framework to support business process compliance is usually developing the right workflow. In particular, workflows should make it easy to automate processes from beginning to end. They should also help optimize those processes for efficiency and compliance.

Workflow automation solutions should provide the following to ensure process compliance:

  1. Guarantee transparency and accountability.
  2. Comply with regulatory standards.
  3. Improve data quality.
  4. Structure organized and efficient processes.
  5. Frequently search for bottlenecks.

1. Guarantee transparency and accountability

Automation makes processes more visible through the use of customizable dashboards. This feature allows users to track established KPI’s at a glance, even when multiple processes are running at the same time. 

Automated workflow solutions also provide detailed reports on process performance, which can provide insight into areas needing improvement. Additional ways for these solutions to key team members accountable include notifying them of assigned tasks.

2. Comply with regulatory standards

Automation software helps organizations avoid the high cost of failing to comply with legal regulations and industry standards. For example, it can maintain logs on when processes run, including information such as the person performing the task, when the task was completed and other details. These logs are particularly useful for demonstrating compliance during audits of business processes.

3. Improve data quality

Improving data quality is one of the most obvious ways of ensuring process compliance through automation. Today’s organizations use many applications to process large amounts of data, resulting in a high rate of error when humans are directly involved. Manual data entry is one of the most common causes of human error, which can result in a high cost for that business. Process compliance solutions address this challenge by automating data entry, which increases productivity in addition to minimizing errors.

4. Structure organized and efficient processes

Maintaining documents and other forms of data can be especially challenging when doing so with manual processes. Moving data manually tends to be time-consuming, with a high chance of error. Implementing automation not only reduces the error rate, it also streamlines document management.

In addition, the simplification of data storage and retrieval allows users to view and modify data through role-based access. The increased accuracy of information makes the workflow smoother, thus increasing employee productivity.

5. Frequently search for bottlenecks

Automation reduces the probability of process bottlenecks. The reduction of manual intervention means that users don’t need to personally ensure the handoff between one process and the next. Furthermore, automation facilitates error detection and creation, which is one of the most common causes of bottlenecks. The result is that automation increases process efficiency.

Increase your process compliance with Pipefy

Process compliance software increases business agility, enabling more productive partnerships internally and externally. It also increases the benefits of automation, a key feature in compliance. But automating process compliance requires an automation platform that’s not only agile but also easy to navigate. 

Important capabilities to consider include visual and intuitive user interface to build, optimize, and make processes more efficient and better able to meet regulatory requirements as they evolve.

With Pipefy’s no-code process automation and management software, teams can quickly and easily visualize, automate, and integrate processes with a focus on improving business process compliance. The Request Management template comes with pre-built capabilities and features, making scaling and deploying fast. Capture compliance requests, assign appropriate stakeholders, seamlessly implement updates, and automatically notify approvers and process owners when changes are needed or made.

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