A new chapter in compliance

Looking beyond compliance offers companies the opportunity to plan ahead for new ways to use data. It's time to do more than just generate reports.

While compliance-related requirements become increasingly complex, companies are taking a hard look at how they can pursue a "sustainable compliance" strategy, which consists of repeatable and cost-effective processes that employ information identified, collected and integrated from across the enterprise. However, some experts point out that the next wave of compliance-related thinking is upon us.

"If all you're doing is 'complying,' then all you'll do is create another set of reports," agrees Claudia Imhoff, CEO of Intelligent Solutions. "Your efforts haven't delivered anything that's good for the company. Compliance should involve competitive intelligence, competitive advantage and making your company more streamlined."

What's "next" is what is referred to as "Beyond Compliance." In this stage, not only have organizations established a sustainable compliance program that provides the necessary visibility for the business to meet all current and future mandates, but the business has also achieved a new measure of agility. "It's not just a matter of compliance; it's a matter of making your company run better," says Imhoff.

As compliance moves into this realm, technology—including enterprise data warehousing—provides tools that not only enable integration of financial and internal control monitoring and reporting but also provide key performance metrics and unprecedented visibility into business processes.

John Hagerty, vice president of research at AMR Research, observes that organizations react to compliance mandates in one of two ways—either by attempting to remediate or patch deficiencies as they are identified or by launching a holistic end-to-end management initiative.

"At this point in time, people are focusing more on the (ongoing) management of compliance," he says. "This is a more information-oriented and data-centric approach."

Until recently, companies underestimated the impact of compliance regulations, according to Cory Shouse, senior architect with McKnight Associates, Inc. "They were trying to meet the requirements with point solutions. Now they recognize there's a strategic and high-impact nature to the regulations and are turning to core fundamental infrastructure components, including business intelligence or data warehouse environments. That's where all the data flows in any robust environment."

Business agility is an important step on the way to building a "right-time" business that leverages all critical data across the enterprise and delivers it in a timely—though not necessarily real-time—fashion, Imhoff emphasizes.

The important benefit from these efforts is that the information is the right information and is available across the organization.

At one major organization in the distribution and delivery business, financial managers had already been working with analytical tools for years. However, their insights were limited to finance, with no way to connect these results with material events occurring along the supply chain. The financial data was generally "clean" and verified, but data from other parts of the organization was inconsistent. The organization had several divisions reporting percentages of untimed shipments, each with its own rules for calculating these percentages.

By consolidating this data within an enterprise data warehouse (EDW), rules governing these and other calculations were built into the lowest possible level of data. As a result, these rules were applied to anyone supplying or accessing data, providing the business with a common number.

Companies looking to sustainable compliance and beyond see such efforts as "a terrific opportunity to come out ahead in their industry," says Imhoff. "They're recognizing that it's the ideal time to leverage many 'back-burnered projects'—such as data quality and data integration—that previously did not have organizational support. The benefits are huge—not only decreasing overall IT maintenance costs but also improving data integrity across the organization and improving internal control mechanisms."

Companies can leverage business intelligence tools—such as performance dashboards—to exceed the expectations of legal mandates. "You need a common framework and view of your data and information to meet not only the letter of the law but also the spirit of the law," says Lee Dittmar, principal with Deloitte Consulting. "It helps reduce your risk of having a problem. You're going to have more insight into what's happening in your business; you'll be able to identify problems earlier and deal with problems before they become crises."

This creates opportunities for building a sustainable compliance strategy that also delivers agility to the business. "The question isn't 'Are you meeting compliance requirements?'" says Rajeev Rawat, president of BI Results. "The question is 'Do you have an environment that is agile so you can adjust to change, whether it's new business performance rules or compliance requirements?'"

Such awareness goes beyond addressing compliance requirements, helping a business achieve a lasting competitive edge.

"All of the tools that technology provides us today—in terms of business performance measurement, business process rules that can automate things and data quality scrutiny—can help move you into a high-performance zone," says Rawat. "This enables decision makers to look at the information in a hierarchical way, from a time frame perspective. Meaning that you now need to look at data and say which piece of information needs to be in whose hands and in what kind of time frame."

The ability to deliver accurate, timely and quality information to stakeholders is at the heart of both sustainable compliance and the next generation of compliance response.

Looking beyond sustainable compliance offers companies the opportunity to do new things with their data—to analyze and identify trends, improve customer service and eliminate redundancies in their supply chains. The effort is a continuous journey that, in the long run, will help companies become more efficient and informed in their processes.

"This is a journey that has to happen," says Dittmar. "Compliance must be sustainable, and that takes work. The program must be effective and efficient. There are significant improvement opportunities, and it will take hard work to achieve the benefits. But pursued properly, this exercise can be translated from a compliance exercise into a journey that improves enterprise governance, enhances business performance and creates shareholder value." T

Joe McKendrick has written for journals such as Database Trends & Applications and Enterprise Systems.