Establish a Compliance Program Using Contract Management

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In the modern global marketplace, the establishment of an effective compliance program is essential for all businesses. Regardless of size, industry or the level of international reach, every business must take into account the intricacies and variation in what is required and what is expected in every location in which it seeks to trade – both domestically, and abroad. The reason this is essential is not only the enhancement of commercial reputation, but also the overall bolstering of the bottom line.

What is a compliance program?

Compliance is the adherence to a set of guidelines or rules. This means that a compliance program in business is a system of policies and procedures designed to help ensure the operation strictly follows internal and external regulations, laws, requirements and obligations. Rather than comprising solely of a static set of written documents, however, a truly effective compliance program is scalable, adaptable and subject to consistent monitoring for performance and efficacy. In this way, it should be present in recruitment, training and day-to-day operation, as well is in documented and agreed administrative pathways.

The scalability and adaptability of compliance programs is vital in an increasingly inter-connected marketplace. Such flexibility allows for the evolution of the business itself, as well as accommodating the evolution of laws and regulations in every region. It ensures that the business is responsive to change in an intuitive way, rather than finding itself struggling to meet changing need. This approach to compliance also serves to further future-proof the business, helping to ensure continuity of operation in even the most difficult and disruptive of circumstances.

Building this type of compliance program increases efficiency within the business operation by enhancing cost-effectiveness. By deploying resources to a well-structured compliance program, the business can reduce financial outlay in fines and penalties while increasing the revenue created by additional commercial opportunity. This is because an effective compliance program creates a proactive business, rather than one which needs to waste resources reacting to entirely preventable issues of non-compliance.

How does Contract Management factor into a compliance program?

For businesses there are three equally important aspects of compliance:

  • Internal compliance – This means adherence to policies and procedures determined by the business leadership, governing operation and conduct.
  • External compliance – This means adherence to legislation and regulation set by industry regulators, regional authorities and international governments.
  • Contract compliance – This means adherence to all contractual requirements and obligations within the business contract library.

While contract compliance forms a large part of any compliance program, the processes involved in effective Contract Management support internal and external compliance, too. In this way, Contract Management can be used to help establish a comprehensive compliance program for the business. This is because the contracts of a business are the heart of the operation, intersecting with every department and every role through employment, finance and accounting, procurement, sales, property and equipment.

Effective Contract Management in modern business is achieved with Contract Management Software, and it is this digital approach that best supports a well-structured compliance program.

Security

Cybersecurity and data protection are significant elements of any effective compliance program because the integrity of personal and commercial information has become a focal point for several types of criminal enterprise. Businesses of all industries and sizes now have to embrace the use of internet technology while mitigating the risk of hacking and data breaches. For this reason, the permission-based access of cloud-based Contract Management Software platforms is the ideal solution in terms of compliance. The access protocols of Contract Management Software bolster security in three ways:

  • Authorization is required to access the platform
  • All access and activity is logged and recorded
  • The cloud-based design of the platform applies an additional layer of external security measures

In addition to the permission-based access feature, Contract Management Software is also built to use encrypted data transfer. This ensures the integrity and security of all data moving into and out of the platform itself, further supporting remote access and global operation. Together, these security elements help to ensure the business is in compliance with both internal and external regulations, while also boosting the security and compliance levels within the Contract Management system.

Risk Management

In any business, the operation is only as secure as that of the Third Parties it connects with. Every time a new business relationship is established, or a contract is activated, a potential vulnerability is created through which damage can be done. Not only does it open up the business to potential cybercrime, it also increases susceptibility to contractual conflict, theft of Intellectual Property, and a variety of fraud. These issues can be costly in terms of fines, penalties and legal fees, but they can also be costly in terms of decreasing overall efficiency and productivity. If the business is regularly having to divert resources to react to Third Party issues, then the business is not operating in optimal fashion.

A comprehensive compliance program helps to prevent these types of issues by focusing teams on the task of meeting requirements. This informs the way in which the business undertakes risk assessments, by ensuring that compliance is always prioritized. It would reduce the appetite, for example, to build a commercial relationship with a business that has a history of non-compliance, or a business that does not prioritize compliance in the same way.

Contract Management Software platforms are designed with Risk Management in mind. Every element – from the centralized document repository to the automated workflows – is intended to reduce the likelihood of human error, the possibility of Third Party issues, and the chance of something going wrong. This is further enhanced by facilities to create risk assessments and risk profiles that are fully informed by the necessary due diligence, made possible by links to leading external databases for the comprehensive background check of individuals and organizations.

 

Standardization control

The standardization of documents, terms and conditions, across the operation, is an important part of compliance. It helps to ensure that all personnel are using agreed language and are working to the same, overall business objectives. Standardization is also closely related to Risk Management and, as such, forms an essential part of both Contract Management systems and comprehensive compliance programs.

Contract Management Software platforms allow for widescale standardization through the creation of a template library, including terms, conditions and clauses. This feature serves several purposes. Firstly, it contributes to shortened sales cycles by speeding up the contract creation process. Secondly, it helps with filtration of contracts based on clause type, or specific language. Thirdly, and perhaps most importantly in terms of compliance, it boosts the level of control that the Legal Department has over versioning and contract content, helping to ensure that contracts are fully compliant with internal and external regulation and law.

 

Multi-region oversight

Compliance has become increasingly complex – not just because of technological advancement in business and in cybercrime, but also because the global marketplace has become more accessible to businesses of all industries and sizes. There are regional differences in compliance regulation and legislation, which means that international operations require multi-region oversight in terms of compliance requirements.

Contract Management Software platforms provide this level of oversight as a result of the browser-type design. Firstly, the use of cloud technology enables the system to be used remotely, from anywhere in the world that has an internet connection. Businesses are also able to select the location of the server used for data, according to legislative and regional requirements. This, combined with an electronic signature facility means that commercial enterprises can conduct business quickly and securely, regardless of distance. Secondly, the very best Contract Management Software supports multiple languages, locales and currencies, making scalable access to the global marketplace easy to achieve. Thirdly, the Risk Management tools of Contract Management Software allows for the business to remain completely up to date on the latest regulatory and legislative developments in any region, ensuring that the compliance program is fully informed at all times.

 

Monitoring

Accountability and transparency is an important part of any compliance program because all personnel are responsible for ensuring that the business adheres to internal and external requirements. It is not enough to simply provide the regulatory guidelines - compliance levels within the business must also be regularly monitored. Consistent monitoring of performance is a core principle of Contract Management, and Contract Management Software is designed to meet this need with powerful auditing and reporting facilities.

  • Auditing – Contract Management Software incorporates a high degree of automation, including the tools within the Auditing Suite. This means that all activity and data is tracked with fully automated audit trails featuring time stamps and user information. This feature works in tandem with permission-based access to ensure that all changes and views can be tracked to the point of origin – supporting versioning control as well as enabling the business to quickly identify and rectify any issues of non-compliance in a proactive way.
  • Reporting

To effectively monitor any program or system, powerful and comprehensive reporting tools are required. Contract Management Software uses automation to create reports that provide insight and actionable data at all levels of granularity. This supports Risk Management protocols as well as the complexities of compliance, throughout the business operation. Reporting can be used to monitor all business areas including workflows, operational data and, most significantly, incidents of non-compliance. With an Incident Capture and Reporting Suite, details of each occurrence are filtered, flagged and assigned for further investigation. Associated analysis tools can then be applied to enhance legal protections.

The analytic insights gained from auditing and reporting processes can be used to enhance Risk Management and provide the data necessary for continual refinement and improvement of the overall compliance program.

The bigger picture

While the spectre of legal issues looms large over all discussion relating to compliance, there is an even bigger picture to be considered. When a business is compliant in all areas, it meets standards that require a high degree of efficiency throughout the operation. The attention to detail and proactive approach required for compliance success creates the necessary conditions for productivity which, in turn, serves to boost revenue, improve overall scalability, and secure business continuity.

Issues of non-compliance create obstacles for business in the form of workflow bottlenecks, delays and contractual conflict. These obstacles necessitate the re-routing of valuable resources and are ultimately a drain on revenue. A comprehensive compliance program works first to remove these obstacles, and then to prevent them going forward, building a proactive approach that encompasses all business areas and processes. Contract Management, being central to all business, is the key to unlocking compliance success, and to embracing that bigger picture.

The scalable solution

Symfact understands the close relationship between Contract Management and the establishment of a comprehensive compliance program and has designed a software platform that incorporates that connection. The automated Contract Lifecycle Management software platform delivers a single, end-to-end digital solution that addresses compliance as a core part of Contract Management processes.

By applying the principle that proper Contract Management is not possible without compliance, and vice versa, Symfact has created a robust product that allows businesses to streamline entire operations. Using cross-platform open API architecture, Symfact’s Contract Management Software is easily integrated with existing business systems and is configurable to meet the exact needs of the operation. This makes the platform a scalable solution that can grow along with the business in a way that reflects current market trends and challenges.

The scalability of a business brings with it compliance challenges. Internal regulations shift as the business grows and re-structures. External requirements shift as the business moves into new market areas and operational jurisdictions. Contractual compliance shifts as market forces impact Third Party relationships and business procurement needs. Scalability is necessary to secure the future of the business, though, so digital solutions for both compliance and Contract Management are vital. Contract Management Software is that all-in-one scalable solution.

Contact Symfact today to arrange a demonstration and explore further how your business can establish a compliance program using Contract Management.