For organizations to not only grow, but be successful, they must keep data at the forefront of everything that they do, whether that is how they operate, what and who their customers are, or how to remain competitive, meaning not only understanding who their competitors are and how they compare to them. The issue is not in fact that organizations have data, but more about the movement of it, and how they keep it secure. There have been several instances recently in the marketplace where customer data was stolen from companies, large and small due to data leaks or hacking. With increased vulnerability, comes increased risk, so the government has progressively put compliance standards in place that hold companies accountable for being reckless with data that ends up in the hands of someone that has no business having it.
What is Contract Compliance
The strategy for contract compliance requires all instances per-contract basis are legally following the rules. The purpose of its design is to reduce the risk to your organization and increase the efficiency in which your organization is operating. As a result, contracts are monitored for performance – such as hiring practices, discrimination investigations, diverse hiring practices, strategy, policies, individual obligations, etc. The point is to access how fair your practices are or if you’re being negligent or biased in any way.
Typically, an organization is required to adhere to a set of standards, rules, and regulations are set by governing bodies, industry associations, or other organizations that may have authority of some kind. However, it’s not limited to externally, there are also internal rules that every organization must abide by to keep the organization running smoothly. Examples of this include company codes of ethics, data privacy rules, and many more. Organizations are required to follow strict guidelines for normal business operations, such as employee wages from both a federal and state level all the way down to even employee safety. Various audits take place, and because compliance is complicated to monitor or even anticipate violations, businesses cannot afford to do this manually.
The ThoughtTrace Platform is designed in such a way where its advanced AI and Machine Learning identify and structure key concepts of interest, as well as correlate facts, relationships, risks, obligations, and dependencies. Despite the complexities of compliance, our systems help organizations ace their regulatory audits while also giving them immediate access to information housed in documents. Organizations do not need to rely on third-party systems to keep them compliant because of integration functionality. At ThoughtTrace, we remove the tedious components of the complexity of being compliant by enabling your organization to gain a more comprehensive understanding of your business obligations, opportunities, and risk. We increase the range and depth of questions you can ask and answer in a short amount of time without increasing costs, considering data privacy regulations can be very costly. With ThoughtTrace, you can explore an innovative due diligence process for faster evaluation by providing information at your fingertips and accessible in hours versus many days.
What is Noncompliance Contracting
When any aspect of a contract is not fulfilled, that is considered noncompliance. For example, if a call center contract indicates within their Service Level Agreement that all calls will be answered in the first 30 seconds 90% of the time, but they are not able to meet that obligation because their staffing forecast was inaccurate, that is considered non-compliance.
Much of non-compliance contracting tends to occur when departments are siloed. Mistakes tend to be made because one department is not communicating effectively with another that may be a crucial part of the overall performance. Sometimes these mistakes occur with contracts that auto-renew where certain clauses could be overlooked because nobody was paying attention to the specifics. Sometimes processes are inconsistent, which can easily make them non-compliant. Essentially, not having a wide level of awareness can be very detrimental to an organization.
How Noncompliance can Cost you
While there is a cost to being compliant, on average the greater cost is incurred in being non-compliant as it is 3.5 times more. To begin with, regulations continue to evolve. The average compliance cost is estimated to be about $5.47 million, versus the average of being non-compliant is $14.82 million based on a study that Ponemon and Globalscape completed. With those types of astronomical figures, organizations cannot afford to put themselves at noncompliance risk as the impact goes much further than just monetary losses.
Some of the risks associated with non-compliance include:
- Penalties and fines – some of these fines can be incredibly hefty
- Jail time – extreme instances may result in jail time especially for the c-suites that are accountable for the company’s performance
- Company Shutdown – there have been cases of non-compliance that have forced a company to be closed due to not meeting the necessary obligations
- Audits – Not only are audits costly and time-consuming, but it comes with the territory of being non-compliant
- Company Reputation – Beyond the financial losses that come being non-compliant, sometimes the greater and long-term loss is in brand reputation. Once customers lose their faith and trust in an organization, it is incredibly challenging to gain that back
Essentially, compliance can be overwhelming to handle manually as an organization, however, with solutions like the ThoughtTrace Platform, the AI does all the work for your organization and equips you to put your best foot forward. Reach out to Thought Trace today!