Managing regulatory change is a major headache for businesses operating in industries where the regulatory framework fluctuates. The problem is that the regulations define what the business can and cannot do, and when they change, the business must change how it operates. This makes it difficult to make long-term plans and strategies, because there is always a risk that the chosen strategy may no longer be viable if the regulatory framework fluctuates.
If your business is stuck in a similar quagmire, there’s no reason to fret. Here are 3 steps that businesses can take to improve the management of regulatory change.
1 – Create a risk map
Creating a risk map is an essential part of regulatory change management which is often skipped by business, and they end up paying the price later. There are many links between regulations, policies, and business processes. There may be a policy which is directly related to a regulation. When you create a risk map you create a model of all the relationships between regulations and parts of your business.
What is the point of this process? It makes it very easy to manage regulatory change. Normally, whenever there is a regulatory change, the business must do an audit of its policies and processes to determine what will be affected by the regulatory change. As you can imagine, this is not an easy or quick process, and there are chances that something might be missed. It is, however, an essential process.
When a risk map exists, they don’t have to go through everything – they already know what regulations is linked to which policies and which processes. So, if regulation 31a changes, their risk map will tell them that policies 2b and 5c were dependent on regulation 31a. It will also tell the business about the business processes affected by policies 2b and 5c. This means that simply by knowing which regulation changed, management would know which polices and processes would be affected by the change. While making the risk map takes some time and effort in the beginning, it significantly reduces the time and effort required whenever any regulation changes.
2 – Get more updates about regulations
Most regulatory experts have to rely on their own research to determine how the regulatory framework is changing. While they do a great job, the process can be made much better. There are many services and trade magazines which focus on regulatory changes. There are software solutions that provide the latest regulatory news and updates as well.
Subscribing to these tools is well worth the minor cost of such services. These services ensure that you get all the relevant regulatory news your organization needs to know. Instead of having to go out and find relevant information, the relevant information itself comes over to you. This saves a lot of time and effort and also provides more business intelligence than would be possible otherwise. There are standalone solutions which provide these updates and many regulatory change management solutions also have a similar service as an added feature. Make sure you ask about regulatory updates from the vendor of your regulatory change management solution.
3 – Add automation to change management
One of the most significant steps an organization can take is to implement a regulatory change management system. These solutions are designed to help organizations get updates about regulations and also implement the necessary changes. These solutions provide regulatory updates and also have a great risk map built in within them, which further reduces the time and effort required to manage regulatory changes.
Small organization can survive with manual change management methods, but mid-sized to large enterprise need a better approach that streamlines the process. There are regulatory change management solutions available in all shapes and sizes. There are on-site solutions developed by legacy vendors that require millions of dollars to implement and maintain. These are usually only used in the largest multi-national organizations, because their cost is too high for any other type of business.
Smaller businesses need not worry – they also have a wide variety of solutions to choose from. Smaller businesses should look at cloud solutions that have recently been released. These solutions have a significantly lower implementation cost and their maintenance is handled by the solution provider, which further simplifies the whole process.
Businesses will always have to work with regulatory changes, because governments keep changing regulations as they see fit. It is important to include a bit of flexibility and change management in the long-term plans of the organization, and to make sure that there is a process to manage change. Regulatory change management is an on-going process which requires constant attention, and it is also necessary that there is a tool in place that makes the process easier for the regulatory experts within the organization.