Part One of this series discussed the difficulties compliance professionals face in demonstrating return on investment to senior management or the board. This second and final part looks at how compliance professionals can prove their team’s ROI.
We must demonstrate the value of purchasing a piece of software, conducting third-party due diligence on vendors and developing a training program for staff.
Compliance and risk managers must also create initiatives designed to prevent investigations and penalties from being instituted by national authorities — even if one has not occurred in the decades that the company has been in business.
The following strategies have proven effective for a variety of organizations around the world:
1. Develop and Refine Your Metrics. Identify what empirical data is on hand in your organization that can be used to demonstrate the cost of poor processes or failures that might otherwise not be seen as compliance issues.
For instance, the amount of revenue that you’ve foregone by losing clients because your client-ID program was too difficult or took too long, or clients were forced to fill in numerous forms that could be streamlined with a new online system.
2. Agree on Success Factors. Link up with key stakeholders to define what they see as success. For example, a reduction in staff churn, an increase in client retention, a reduction in the time needed to process a loan, etc.
If you can demonstrate that your new process will actually result in a loan approval taking a shorter time, for example, then you’ve shown that you are adding value to the business.
3. Share Your Successes. You will probably be meeting regularly with regulators to discuss your programs, particularly during their audit of your compliance framework.
If you receive a good report, make sure you not only share it with your manager, but that you circulate it more widely across the organization, particularly to those stakeholders who hold sway over your budget.
4. Reaffirm Your Role with Senior Management. It is likely that these stakeholders will consider you a cost center and an impediment to them in doing business.
Explain what compliance is about and how it can drive procedural efficiency and reduce the time they have to spend responding to auditor or regulator requests.
By learning more about what you can do to help their business, you will likely recruit compliance champions who will advocate on your behalf during strategic planning or at budget time.
And by thinking outside the traditional compliance box, we can develop a myriad of strategies to demonstrate the value of compliance to the enterprise and ensure the longevity of our team and compliance programs.
Guy Underwood is the executive chairman and founder of the RISQ Group, one of APAC’s leading providers of risk management and employment screening services. He can be reached here.