“The Future is Now” — Compliance and Technology
This posting is not a “pie in the sky” outline of compliance in the future, when technology works seamlessly with compliance functions. My focus today is on what is happening now in the compliance world when it comes to technology. Unfortunately, this is not a column that is limited to compliance.
I am repeatedly struck by the failure of Fortune 500 companies to embrace and implement basic technology tools. The number of companies still relying on paper, spreadsheets and other hand-driven mechanisms to record critical business information is probably much larger than we all would acknowledge.
The United States has always been a productivity leader. But when it comes to basic technology functions that permit information sharing, automation and efficient storage of data, I am not so sure.
In the compliance world, I still observe companies relying on paper systems for procurement, due diligence and contract management systems. Believe it or not but there still are Fortune 500 companies that pay money to vendors without verifying that the amount charged correctly matches a purchase order or a specific contract. You find that hard to believe?
Chief compliance officers often complain about the lack of resources to conduct due diligence, monitor third parties, and organize compliance records. Sharepoint has become invaluable to many companies as a common repository for important compliance documents and way to access documents across corporate functions.
With the increasing interdependency of financial controls and compliance functions, we can expect to see greater demand for information sharing and access to records among compliance, finance, human resources, procurement and inter-related functions that depend on coordination. That is where technology has to come in and come in now.
The era of stovepipes and silos has been breaking down rapidly over the last ten years. The pace of technology will increase quickly and any remnants of stovepipes and silos should be obliterated in the next five years.
Technology – cloud-based programs, blockchain (distributed ledgers, and other automation tools) — is developing rapidly and in time, will become universally available at affordable costs. The next five years will be transformative. Those companies pushing paper and clinging to the past to avoid incurring moderate cost improvements beyond paper are in for a shock.
Companies that rely on outdated technologies will lose in the competitive marketplace. A compliance program without technology reflects a company reluctant to innovate. Such an attitude is bound to influence the company’s basic business operations and overall profitability.
Technology is the future – more so than ever. No longer are we bound by bulky PCs that hold individual software systems – a cloud-based system permits grater sharing, networking and increased accessibility to shared functions. The first step in this transformative process is breaking down silos and inefficiencies internal to a company – the next step will be increasing accessibility and efficiency for companies when interacting with business partners, support functions (e.g. banks), and other third party relationships that require duplication of record-keeping and data.
The future is now (George Allen’s mantra for the 1970 Washington football team). It equally applies today with significance to business and compliance.