IS PAPER COMPLIANCE ENOUGH TO BE SECURE?
The practice of using paper as a surface for writing goes back to ancient times when papyrus was first employed for the purpose. Until recently, before the advent of computer machines, paper reigned supreme. Even today, when computers have altered the way we worked and the way we led our lives, paper documents are still used liberally in businesses, industries, homes and everywhere. Apparently, it will take a long time to consign paper to oblivion and a thing of past.
Paper documentation and filing systems are costly affairs. They are difficult to manage requiring human and material resources.
In case the documents are of critical importance, a lot more care and hence resources are needed for their secure storage. Arrangements must also be made for their easy access when required by the workers.
With rapid advancements in technology and increasing digitalization, organizations all over the world are forced to enunciate and follow strict guidelines. Regulations pertaining to ‘Compliance’ are fast altering the way businesses conduct their daily tasks. This is a challenge for organizations that were accustomed to manual processes.
THE BASICS OF COMPLIANCE
All enquiries usually begin with answering basic questions. Our discourse on Paper Compliance, likewise, should first provide information about what ‘Compliance’ really is. In management and business circles the word usually implies two concepts: ‘action’ and ‘standard’. To fully understand the concepts we need to elucidate the difference between the two.
The connotations associated with ‘Compliance’, in general, are that of following government regulations, Safety, Health & Environment (SHE) standards and Data/Security requirements. ‘Compliance’ is considered as an ‘action’ if organizations and businesses consciously recognize these regulations and policies. The recognition is quickly followed by an effort to abide by them because it is necessary and vital for the survival of the business.
Compliance constitutes certain requirements enforced by recognized governing bodies. That means an organization or a business shall meet those requirements in order to operate legally and safely. Businesses and organizations that are compliant are responsible in many ways. They are aware that they must take care of their employees and the clients in equal measure. They are conscious that they have to formulate a strategy to strictly comply with policies, laws and regulations. They know about the boundaries within which they have to operate their business. When we speak of compliance as a ‘standard’ it implies having clearly defined policies and set of rules to ensure security, stability and smooth operations.
The standard can only be useful if it is enforced strictly within the organization. On top of that ‘standard’ does not just mean a blind following of the rules and policies. ‘Standard’ should be accompanied by a true understanding that sticking to the rules will ensure productivity and success.
COMPLIANCE MATTERS
The primary objective of ‘Compliance’ is to identify and avoid red flags—practices that can be damaging—in the business. If compliance is not taken seriously, it often results in penalties and fines that can adversely affect operations.
‘Compliance’ helps employees act responsibly. Training programmes designed to impart knowledge and a sense of responsibility can make a huge difference. They can improve the environment at workplace. They can ensure professionalism by promoting healthy competition. They can infuse corporate values both inside the office and out. Taking compliance seriously can mean two key benefits: avoiding legal issues and increasing productivity.
A survey conducted recently by independent institutes emphasizes these points. The studies made the following revelations:
a. Compliance audits on regular basis saved in excess of $2.8m on average. b. Employing in-house legal experts saved businesses $2.2m on average.
b. Employing in-house legal experts saved businesses $2.2m on average.
c. Enabling risk and compliance technologies saved $1.4m on average
d. Regular monitoring to ensure employees kept up with regulatory changes saved businesses $1m on average.
These are great benefits that cannot be tossed aside as insignificant. What’s more, if proper measures are taken, businesses can further improve on them. Training programs that are intelligently designed and thoughtfully delivered can help achieve this objective. As a result, compliance processes can be managed, costs can be reduced and user experience can be enhanced.
PAPER CHASE
In spite of the fact that there is an increasing reliance on digitalization, the use of paper cannot be eliminated altogether. However, its use can and should be curtailed to a great extent. There are several reasons to make a shift to a paperless society. Reducing the use of paper cuts costs in many ways:
a. Documentation: Businesses save costs if they are able to retrieve information quickly and without hassle. Digitalization offers that ease. Paper based filing and documentation makes office work a dull routine and employees shy away from indulging in such tasks..
b. Savings: Costs on printing is an expensive affair because a variety of materials is required like paper, printer, toner and other stationery items. But storage space for paper and allied equipment costs even more. Research has established that at least $900 are required every year to provide adequate storage space for paper. If the time employees spend rummaging through piles of paper is taken into account, then the costs spiral out of control. Cutting down the costs on paper simplifies matters, reduces stress and brings about efficiency in the businesses.
c. Productivity: Paper dependent tasks claim as much as four hours of employees’ time every week. The retrieval and re-filing of a single paper claims 10 minutes. And employees make 50 trips per week to the printer or copier for printouts. That’s why a majority of workers believe that efficiency and productivity would rise phenomenally if they are relieved of paper based tasks. This would mean employees will have more time for focusing on real tasks and they will have more satisfaction at the workplace.
d. Compliance: Paperless systems ensure that any number of documents can be stored. They can be signed digitally and authenticated within no time. In case of paper based documents, travel to and from signing authorities consumes great amount of time. At times when documents are delivered back, employees discover that the signatures for which they were sent are missing. There is no such risk with systems solely reliant on paperless mode of work. Paperless systems can accomplish all tasks deprived of the need to print a single sheet of paper.
COMPLIANCE IN PANDEMIC TIMES
Every organization has a plan in place to cope with unexpected events like a natural disaster, an emergency, or a shutdown. Companies that prioritized health and safety of their employees were better equipped to handle the pandemic because they had an effective plan in place.
Unfortunately, many of these plans were confined to the paper. They lacked compliance and did not go beyond routine and perfunctory checks. That’s why most organizations found themselves unprepared to face the pandemic onslaught which is a low probability risk. LOGISTICS Companies and society have broadened our definition of the bottom line. Making money remains the objective of any commercial operation, but the impact we make on our employees, our communities and our environment is critical to holistic success. Leading third party logistics companies did not need a health pandemic to refocus on employees safety. They were already doing the right things to protect worker safety, an approach that can readily be adapted to mitigate new risks.
LOGISTICS
Companies and society have broadened our definition of the bottom line. Making money remains the objective of any commercial operation, but the impact we make on our employees, our communities and our environment is critical to holistic success. Leading third party logistics companies did not need a health pandemic to refocus on employees safety. They were already doing the right things to protect worker safety, an approach that can readily be adapted to mitigate new risks.
COMPLIANCE OR PAPER COMPLIANCE
Most companies do have compliance programs but they are limited to paper, policies and documents. The spirit to follow and implement is missing. That’s why significant violations are noticed. Every company should routinely examine if the management has been successful in implementing the compliance program. To answer that we should first look at these basic enquiries.
1. Was risk assessment accurate? Risk assessment is fundamental to compliance program. Anything that does not go beyond paper and rests only on desks and shelf will hardly bring about any meaningful change.
2. Did the company imbibe the spirit of compliance? Company management is responsible for communicating all their programs effectively. Paper communication strategy is limited to periodic statements from senior management but compliance needs more than that. Training programs that create awareness and inculcate a spirit of following the guidelines are essential. Compliance can be meaningful only when a general realization pervades across the organization and all tiers of the organization are conscious of making continuous efforts. To make sure of this, a culture of rewarding employees for compliance and ethical conduct should be promoted. The rewards should be publicized in the company’s newsletters or any other communication vehicles.
3. Did the company enunciate and adopt specific policies for compliane? Clearly defined policies and the will to follow are imperative. To provide incentives and promote a culture of compliance, elaborate programs have to be arranged. These may include gifts, entertainment, meals and travel expenses. A policy lacking the spirit to follow and adopt is no more than ‘paper compliance.’
4. What policies are in place to combat risks and corruption? Companies with ‘paper compliance’ alone do not have dynamic and effective controls. In such cases, there is a reliance on financial audits which only measure material transactions. These audits cannot take into account any non-material activity which can open a way for corruption. The widely publicized cases of IBM and Siemens involving bribery charges are examples to illustrate the risks that come with mere ’paper compliance.’
5. What programs are in place to monitor and improve compliance? The most reliable indicator of compliance is the existence of monitoring and improvement programs. Most companies do not have such programs but those who do, have a smooth sailing in implementing compliance program. Some of the basic elements for ensuring compliance may include regular inputs through questionnaires, reviews and forensic audits.
With the availability of new technology and the ease of operation it offers, the shift towards ‘paperless systems’ appears to be a pragmatic approach. Reducing usage of paper often result in efficiency and increased productivity. In the process, compliance is also easily achieved. With a single minded strategy, organizations can do away with ‘paper compliance’ and make way for a lean and mean organization.