Businesses often view compliance management with a mixture of confusion and dread due to the constant changes that occur to compliance recommendations and regulations. SAP provides comprehensive solutions that help businesses stay on top of compliance requirements, enforce controls, and drive collaborations and consistency across the organization.
Business ByDesign from SAP is one of the tools that can increase the competitive advantages of a business.
What Is Compliance Management?
Compliance management involves monitoring and assessing organizational systems and processes to ensure that they remain in compliance with industry requirements, regulatory policies, and security standards. By consistently passing third-party audits, businesses become known as “ISO compliant.”
The International Standards Organization (ISO) is an independent, non-government agency that publishes standards for companies in different industries including manufacturing, healthcare, and transportation. Although these standards are not mandated by law in countries, they are highly regarded as the best industry practices.
Compliance management helps businesses avoid hefty fines that can be assessed on any corporation that violates regulations or laws. As such, all employees should have a strong understanding of how to adhere to compliance standards.
SAP enterprise solutions have controls in place to help businesses access, review, and modify information within the SAP landscape.
What SAP Has to Offer
Compliance management is a component of SAP enterprise resource management (ERP) solutions. Also included in SAP ERPs are governance, risk, and compliance programs that aim to align IT with business goals while simultaneously making sure the company obeys industry and government regulations and adequately manages risks.
SAP programs can help businesses and organizations manage their compliance processes more effectively and realize the value of a centralized model.
The tasks often included in SAP compliance management are:
- The establishment of an internal control structure
- Validation of the effectiveness of internal controls
- Prevention of erroneous data filtering throughout the business
- Certification of the accuracy of financial statements
- Reporting of detailed financial information
- Disclosure of conflicts of interest
With an ERP for small to midsize companies, these businesses can identify compliance issues and proactively correct them. The solution offers reporting and certification of the overall state of compliance activities of the entity.
SAP platforms allow businesses to identify and manage system access across their native environments, and codify the roles and responsibilities of all employees within the organization. With SAP compliance management, businesses can get continuous access analysis of their complex work environments using real-time insights that support access compliance management.
The SAP compliance system also supports customized access, where users can be assigned predefined access rules and policies. Access can be dynamically updated and changed according to staffing and business requirements.
Advantages of SAP Compliance Systems
As businesses grow, a compliance management system is critical to optimizing operational performance. The following are the benefits of using an SAP compliance management tool in your business:
1. Avoiding Violations
This is one of the most significant benefits of using SAP compliance management because it helps businesses avoid serious fines that can affect their financial well-being. According to a Ponemon Institute and Globalscape compliance report, non-compliance fines cost 2.71 times more than what it would cost to maintain compliance. Depending on the violation and industry, non-compliant businesses could even be shut down by the government.
2. Better Risk Management
Regardless of the business type and industry niche, there are always financial, operational, and strategic risks that must be addressed. SAP compliance management systems help businesses track, evaluate, and manage these potential risks. When the risks surrounding a business are properly managed, successful outcomes are optimized.
3. Process Efficiencies
Compliance management with an SAP tool reduces the potential for errors, helping businesses spot risks early enough to avoid problems. By detecting risks early, businesses can not only save time and money but also ensure operations are maintaining high-efficiency levels.
4. Competitive Advantages
Businesses that pay more attention to compliance using SAP compliance management methods are generally better positioned for long-term success. In addition to better operation efficiency, SAP compliance management systems help businesses enhance resource utilization and reduce costs to drive positive outcomes that help them stand apart in their sector.
5. Brand Trust
Trust is one of the most important intangible benefits of using SAP compliance management software. It may not always be obvious, but using a reputable compliance tool is a sign to customers, contacts, vendors, and other stakeholders of a company’s long-term commitment to the success of its brand.
In a Nutshell
Compliance management is an important part of every business’s ability to operate and succeed. SAP compliance management tools provide a way for businesses to protect their investments and reputation by helping them avoid errors, unethical behavior, and costly mistakes. By enforcing industry-specific compliance standards, businesses can also get extra protection against external threats.
Wondering about how SAP Business ByDesign compares to Sage Intacct? Take a look at our latest post.