The globalization of supply chains brings forth the multiplication of regulatory compliance programs across the globe affecting every industry. Growing concerns over human rights abuses, human health, and climate change impact how consumers make purchasing decisions.
As a result, compliance functions have shifted from report-scrutiny to proactive deployment of risk-aware initiatives that aim to achieve not only their compliance duties but also reach their Environmental, Social, and Corporate Governance (ESG) goals.
The regulatory landscape, however, is becoming increasingly complex, which comes with rising costs and additional due diligence requirements. Maintaining compliance and building/implementing an ethical agenda need not overstretch your resources. Outsourcing all or some of your risk management and compliance processes and policies can alleviate the burden and keep you focused on your core business.
Here are some areas where outsourcing would prove most beneficial and significantly lower your global quality and compliance costs.
Staffing and Changes in Regulatory Challenges
Over the past few years, compliance has become a fully integrated function in most organizations, if only out of regulatory obligation. As such, skilled professionals are in high demand. Should regulation changes, new programs, or your own ESG initiatives require additional internal staff, you are bound to compete with companies that need the same. You are then facing time-consuming recruitment tactics, hiring processes, and retention challenges.
While you may not need extra manpower and prefer keeping everything in-house with the assurance employees are tuned in with your corporate policies, you still need to have training programs in place, especially when changes or updates occur, or when new regulations enter into force.
One particularly relevant example would be the new ECHA’s SCIP Database. Guidelines have changed on multiple occasions, not to mention the degree of complexity and amount of legwork and manual labor necessary to fulfill the requirements by the fast-approaching deadline of January 2021.
Outsourcing allows you to fill gaps and overcome any shortage of talent. It gives you access to a pool of compliance experts who are part of a fully skilled and resourced team. You also benefit from the flexibility and adaptability inherent to compliance solutions providers whose sole purpose is to maintain and increase their degree of mastery.
Navigating a Wide Range of Compliance Programs
Regardless of your industry, chances are you fall within the scope of several compliance concerns, across several countries. As cross-functional as the compliance umbrella has become in bridging sustainability, ethical sourcing, and chemical management – to name a few – keeping 100% of the tasks in-house may dilute core competencies and introduce redundant compliance costs.
Whichever areas have the highest priority on your agenda are ones where you focus on development and strategic goals. By supplementing your task force with an external partner, you stay on track and keep your teams motivated to do what they do best.
A third-party vendor will bring automated workflows and dynamic databases to the table and simplify your relationship with suppliers across the world. You retain the responsibility of reaching your compliance goals while delegating the programs where you are less proficient. Doing so can free up time and budget to secure new ethical sourcing deals, study materials alternatives, focus on strengthening supply chain channels, and more.
Risk Awareness and Mitigation Through Access to Technology
Organizations are subject to a lot of pressure: pressure to be profitable and pressure to grow. And ESG factors are increasingly moving the pressure gauge further.
According to Forbes, the main barrier to ESG integration “has been a lack of data and the necessary tools to get a handle on the fragmented and incomplete information available.”
Enter AI-powered and machine learning technology which can deliver comprehensive metrics across a wide range of concerns.
Climate change. Palm oil deforestation. War on plastic. Human trafficking and modern-day slavery. Conflict minerals. Chemical management…
For businesses that know where they want to go but are unsure how to get there, implementing a risk-based approach makes the most sense (as it does, in fact, for most modern-day strategic decision-making processes).
For most, internal IT capabilities cannot roll out that many plans into a scalable, evolutive system, or it would be prohibitively expensive. Outsourcing to experts in the compliance tech field presents itself as a viable option.
Through real-time collaborative risk mapping, you can promptly take action toward risk mitigation and keep an eye on questionable areas. The choice is yours to prioritize action, risk-score suppliers, request virtual audits, or severe ties should it prove to be necessary.
With a fully integrated SaaS solution, you gain valuable visibility to protect your assets and allocate your resources where they are most needed.
Compliance and ESG with Source Intelligence
In a “normal” year, you have to deal with a plethora of regulations and internal action plans that already amount to daunting work and what seems excessive compliance costs.
While it may seem ill-advised to ever cut compliance budgets, 2020 has been nothing but a normal year.
The impact of the pandemic has yet to be fully evaluated but in reality, most businesses are feeling the pain: disrupted supply chains, export bans, employees on sick leave, loss of revenue, and so on.
As of September, despite pleas, regulatory compliance deadlines have not budged, except EU MDR for obvious health-related reasons.
When stretched, organizations have to make tough decisions. But they can also decide to find solutions that complement their internal resources.
This is what drives Source Intelligence to develop affordable compliance solutions that assist competencies and alleviate the burden for companies large and small.
Our award-winning platform is designed to respond to your global quality and compliance needs now and long-term, without driving the cost up. We firmly believe compliance and sustainability should be norms, not financial differentiators.
Our solutions are highly customizable, offered with access to teams of experts, and provide you with the support and engagement you need.
Let you be the judge. Request a demo today to see how we can support your compliance and ESG efforts.
