An effective compliance program can be a significant financial investment—one that the board of directors might have a hard time justifying, if directors don’t understand why regulatory compliance is important.
To secure that compliance budget, the chief compliance officer has to demonstrate how the compliance program supports the company’s overall business objectives. Making that connection clear is crucial for your compliance budget meeting.
In this article, we’ll explain the key considerations for compliance-related project management, and how these considerations directly affect budgeting and advocacy for your compliance program.
How to Structure a Compliance Program Budget
When preparing your compliance budget proposal, you’ll want to include these elements in your presentation:
- Costs and cost-control measures
- Direct benefits
- Cybersecurity risk management strategies
Let’s examine each one more fully.
Costs and Cost Control Measures
Start by identifying your immediate compliance requirements and, if possible, a road map of future needs you’ll have over time. Then estimate the associated costs of a compliance program that would meet those needs. This exercise can go a long way in helping you plan your program, and in evaluating compliance solutions that will meet both your immediate and future needs.
As you budget for a compliance solution, you may want to detail the costs of prior solutions to whatever approval committee you’re facing. Talk about the expense of on-premises solutions, including the added expenses of on-site infrastructure and utility expenses.
Not only are such solutions a cost-center; the implementation can take several months. It’s far more difficult to win support for investments of that magnitude compared to newer, cloud-based solutions.
SaaS compliance platforms are cheaper, and they can be implemented in just a few weeks (or even days). Nor do they require the equipment maintenance that traditional hardware does.
Anticipate the future
When costing out your compliance and risk management solution, look for a tool that can meet your current and future needs.
First, an all-in-one solution that allows you to operate your compliance program on a single platform will deliver significant savings over the long-term. Second, presenting a solution that can support the business now and in the future will carry a lot of weight with stakeholders.
It might be tempting to go into your budget meeting with a low-cost option that can meet your needs today but won’t be able to scale with the business. Don’t fall into that trap. It’s a short-cut decision, and your compliance program will eventually become a cost drain as you struggle to perform an expensive, complex migration to a new solution—quite possibly the one you discarded in the first place—when that day inevitably comes.
While assigning a dollar value to every direct benefit of a compliance program isn’t easy, it’s still wise to include such an explanation in your budget presentation.
First, a cloud-based compliance solution will automate much of your compliance program. That delivers cost-savings from human labor and tedious manual processes. It also frees your team members up to focus their efforts on activities that drive business growth. Automation also provides greater accuracy in reporting, and a far stronger compliance program overall.
To reinforce this perspective, include some of the additional risks associated with compliance program inefficiency. For example:
- Manual reporting can take days to organize. The company loses valuable time that could have been spent on other tasks, as well as the ability to prepare properly for an impending compliance deadline.
- The risk of human error is greater. That can have disastrous consequences, including monetary fines, costly investigations, and even lost business deals.
- The risk of inaccurate or inconsistent data from manual workflows is greater. Those risks can hinder decision-making as executives struggle to confirm data accuracy and completeness.
Furthermore, the lack of an effective risk management solution—one that doesn’t provide data-driven insight—can make it more difficult for compliance professionals to demonstrate how compliance issues relate to overall business growth. That, in turn, makes future budgeting decisions difficult.
For example, with a risk management and compliance tool like ZenGRC, you’ll be notified when an employee hasn’t completed a required compliance training program or submitted required documentation for some task. The ability to produce such evidence of compliance activities can be critical to closing deals with customers seeking assurance from their vendors.
And when such alerting functions reveal recurring red flags, that can help you identify vulnerabilities in your risk management program. Then you can implement reforms as necessary to put the company in a more competitive position.
Cybersecurity Risk Management Strategies
A strong compliance program doesn’t just help a business to comply with its regulatory obligations; it can also help the business manage other cybersecurity risks, whether those risks are regulated or not.
So begin by conducting a thorough risk assessment, and determining the severity of outcomes for each risk through qualitative and quantitative risk analysis. Then you can prioritize the most immediate threats and appropriately allocate budget to activities that will have the greatest impact on the business.
By clearly explaining the most immediate, severe risks and providing a timeline for addressing them, that helps to secure a good budget. Furthermore, monitoring can help in benchmarking your existing program and can be used to prove ROI for future budget approvals.
How ZenGRC Can Provide ROI For Your Compliance Budget
Implementing a compliance program can seem daunting. If business operating units can’t clearly understand how the program directly affects revenue and prevents adverse events, winning their support will be difficult.
To make that connection, the compliance officer must be able to articulate compliance risks, demonstrate the favorable outcomes that the program can achieve, and show how the program can scale upward as the business grows.
You must also highlight areas for cost control and cost savings, such as eliminating manual tasks your compliance teams execute now because they don’t have a solution that automates this work.
With ZenGRC, stakeholders, employees, and your compliance team have access to a single source of truth that covers all of your current and future risk areas. The ability to gather documents rapidly and to monitor compliance saves man-hours and reduces the possibility for human error.
Additionally, ZenGRC’s user-friendly dashboards show you at a glance which risks need mitigation; track workflows; collect and store the documents you’ll need at audit time; and more.
Worry-free GRC is the way to be! Contact us now for your free consultation and demo of ZenGRC.