Decoding Compliance Budget 101: Planning & Optimization Hacks

Gowsika

Gowsika

May 03, 2023

Decoding Compliance Budget 101: Planning & Optimization Hacks

Creating a compliant organization is a high-stakes endeavor. Strict regulations have made organizations and institutions take compliance efforts more seriously. Given the sophisticated nature of compliance, it is challenging to allocate a budget that influences security policies and creates a disciplined compliance environment.

So how do you, as a CTO, decode the compliance budget and keep things in balance from both the business and compliance point of view? In this blog guide, we will be discussing the compliance overall budget and how you can optimize it. Let’s get right into it.

What is a Compliance Budget?

A compliance budget is the allocation of financial resources for compliance related activities and a tool to assess the costs and benefits of adherence to organization’s security goals.

These budgets set aside funds for requirements such as real-time monitoring, ongoing security projects, auditing, training, tools, reporting and more.

How to Plan your Budget for Compliance?

In order to effectively allocate and plan your compliance budget there are different strategies depending on your domain. A few common objectives that you must pay attention to are listed below. Let’s check these in detail.

How to plan your budget for compliance?

Choosing Your Framework

To effectively plan your compliance budget, choosing the desired framework that you must comply with plays a major role. For example if you’re a healthcare-related entity you need to be compliant with HIPAA. So planning your budget with respect to HIPAA compliance requirements will put your budget planning at ease and also will prevent you from costing monetary penalties and help you establish the desired best practices in place.

The compliance budget should be segmented for various needs of the desired framework such as administrative safeguards, technical facilities, risk assessments, policy implementation, and audits.

Cost-control measures

Identify your immediate compliance requirements first. Doing so will help you choose a compliance program that helps you address the most pertinent aspects of compliance and save you an immense amount of time and effort.

While planning for a compliance solution, you should also budget the costs with ROI in mind. This will help you gain faster approvals. 

On-premises solutions, on-site infrastructure, and utilities could cost you an arm if you are a growing organization. This is why it is important to go the SaaS route. A compliance automation platform like Sprinto is a cost-effective solution that enables you to be compliance regulated within weeks.

Risk management 

A strong compliance program helps a business comply with its regulatory obligations and enables you to manage cybersecurity risks

Start by conducting a comprehensive risk assessment to understand the impact and severity of risks. This will enable you to prioritize and allocate budgets to activities that will significantly impact your business standings. Moreover, you can monitor your compliance program as it can help benchmark your existing program. That can be used to prove ROI for future budget approvals.

How to Optimize Compliance Budget

Once you plan out your compliance budget, optimize it for maximum ROI. Let’s have a look at some compliance budget optimization hacks for 2023:

How to optimize compliance budget

Determine your needs

Compliance is considered a high-cost area of the business since the cost of compliance can increase as regulators get more sophisticated as risks evolve. The higher your company’s revenue, the bigger your budget should be. When investing a considerable amount of money, you must ensure it is efficiently utilized. 

While budgeting for compliance, you need to understand your needs by considering factors such as company revenue, the number of employees, the time required for data analysis, and building reports, tools, and resources required. Collaborate with the different teams and determine your spending for cyber security, risk management, technologies, performance monitoring, etc. This will help you allocate the budget effectively.

Invest in automation tools

Manual reporting and compliance testing can be daunting and take days to organize, requiring a lot of time and human resources. It also puts a potential risk of human error and inconsistent data workflows, which will affect overall business growth.

Innovation can help your institution offset growing compliance costs. With the right partner, you can leverage technology that reduces the high costs typically associated with establishing a compliance program and strategically optimize your budget.

Analyze the effectiveness of compliance efforts

Regularly analyzing and evaluating the effectiveness of your compliance programs and efforts help identify improvement areas. This helps in optimizing the budget allocation process in the future.

Also, when you regularly audit and conduct compliance assessments to identify gaps, this helps reduce costs and streamline your compliance program in the long run.

Also, check out: Types of compliance risk

Reasons to increase your compliance budget

Certain compliance standards are mandatory, and you need a decent budget. However, is there a need to increase your compliance budget? There are some notable reasons to increase your compliance budget.

Reasons to increase your compliance budget

Regulatory changes and associated penalties

A compliance violation can result in significant fines. The fines are decided based on how well-documented your compliance program is, how many dedicated resources are in place, and adequate tools and technologies. To tackle the ever-changing compliance requirements, increasing the budget can help you inculcate the necessary resources, and tools to show effective compliance to enable best security practices in place and avoid regulatory troubles.

Maintaining the organization’s reputation

Market reputation is the core of any business. This can take a hit if you fail to comply with security standards and regulations. To avoid and mitigate security risks, you should have dedicated resources and real-time monitoring in place. For these compliance and security efforts, you need to increase your compliance budget.

Expanding into new markets

To expand into new markets, you must comply with the regulations and security standards followed there. An example here would be GDPR compliance. Compliance certifications help you gain a competitive edge by winning customers’ trust and enable you to follow advanced security guidelines. So, if you want to capture new markets, you should increase your compliance budget to meet all requirements.

Also, Find out: How you can manage compliance

Final Thoughts

A compliance budget is also a crucial part of the organizational budget allocation. The necessity of a well-drafted budget in today’s compliance-driven environment is quite clear. And optimizing the budget can drastically boost ROI.

A compliance automation solution like Sprinto can help you trim down unnecessary costs, prove quicker value, and drive compliance-readiness in quick time. Get in touch with Sprinto’s compliance experts and learn how you can drive better ROI. Get started here

FAQs

1. What is included in compliance costs?

Compliance costs refer to all the expenses that an organization incurs to adhere to regulations and standards. These include the salaries of people working in compliance, the cost of compliance automation tools and systems, money spent on reporting, etc.

2. What is the best way to optimize the compliance budget?

The best way to optimize the cost is by partnering with a compliance automation platform to automate major manual compliance tasks.

3. How to manage compliance costs?

Here are four tips for effective compliance cost management:

  • Investing in compliance and addressing cyber security risks
  • Prioritizing training and education on compliance
  • Enabling compliance automation process
  • Auditing reporting systems
Gowsika

Gowsika

Gowsika is an avid reader and storyteller who untangles the knotty world of compliance and cybersecurity with a dash of charming wit! While she’s not decoding cryptic compliance jargon, she’s oceanside, melody in ears, pondering life’s big (and small) questions. Your guide through cyber jungles, with a serene soul and a sharp pen!

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