When things are hectic at your organization, compliance may not feel like the highest priority. If you aren’t in an industry that absolutely requires compliance, it can feel like a box to check — more of a nice-to-have than a must-do. In other cases, it may seem like a good idea . . . but one that can be kicked down the road indefinitely. However, we believe it’s a good idea to approach compliance early — often earlier than you may think.
Indeed, there are some situations in which compliance can actually move the needle in a big way for your business, either positively or negatively. Here are three specific, value-driven reasons why you should consider being proactive about compliance and get out ahead of it before it’s too late.
1. Audit Potential
If you’re already focused on compliance, then you likely know when your next audit is coming up. However, if you’re just getting started or are just now considering whether to go through a certain compliance process at all, you may be unclear about how it all works.
A big piece of advice that we often give to customers is: plan ahead! Preparing for an audit can take way (way) longer than you think, and it can cost more than you realize. From a monetary perspective, the compliance process can easily cost tens of thousands of dollars. And it’s rarely a one-time thing. Depending on your industry and the size of your organization, as well as the type of compliance you are pursuing, you may need to do an audit every year. Long story short, if compliance is in any way in your future, it’s a good idea to start thinking ahead and planning for it now.
Before you get too overwhelmed, here’s what we recommend: treat compliance audits like a year-long product launch. In other words, allocate resources — people, dollars, and tools — to your compliance project, just like you would an income-generating product (because, spoiler alert, compliance can absolutely help you generate more income!) (Read up on who you need on your team and how to get ready for a compliance audit here.)
2. Sales Opportunities
We have written before about how compliance can help your company generate new business. In essence, it’s a simple cost-benefit analysis. First, you want to calculate the cost of becoming compliant. This may include hiring a compliance expert on a full-time or contract basis, securing a third-party firm to conduct the audit, and/or buying software and products that are requirements to meet compliance standards or that enable you to do so. (Read up on how to budget for a compliance audit here.)
On the other side of the equation, try to calculate how much business you could pursue (and win) if you became compliant with various standards. This can definitely have a big impact on what your sales team is able to go after. If you’re just getting off the ground, consider market potential that may open up to you simply by becoming compliant. If you’re already operating, you might examine deals you’ve lost out on or that are currently on pause because you’re not able to meet their compliance needs. For many organizations, while the upfront cost of compliance can be high, it’s well worth the opportunities it opens up for sales.
3. Merger or Acquisition
A lot of people believe that 2017 will be a big year for consolidation in several industries. If your organization is thinking about merging with or being acquired by another company, it’s a good idea to consider whether achieving certain types of compliance could increase the valuation of your company or improve your odds of being acquired.
For example, if you are a data analytics company, becoming HIPAA compliant could allow you to branch into the medical industry and increase the size of your overall market. Getting compliant can open you up to acquisition by companies that operate in the healthcare space or just generally bump up the valuation ahead of a bidding war.
As part of M&A, your organization would be asked to share detailed information about any regulatory issues that affect your industry, as well as explain how your computer systems and processes work. This includes demonstrating compliance where necessary. And while your organization may not absolutely have to meet a certain compliance standard, if it’s a requirement for the company thinking about acquiring you, then going ahead and meeting those standards can help ensure that the transaction goes smoothly.
Get the Playbook
Compliance can be a huge undertaking, and it’s easy to understand why companies often want to put it off until it’s absolutely necessary. But while getting there can be a long road, the upside can be massive. Whether you are planning proactively for an audit, opening up new sales channels, or prepping the company for an exciting new move, compliance can be a key enabler.
Want to learn more about compliance as you determine whether now’s the time for your organization to move forward with it? Check out this wrap-up of our 12-part series on compliance, and download a copy of our free Compliance Playbook for Cloud Infrastructure.