How to Build a Compliance Management System
Payal Wadhwa
Nov 09, 2024
Whether it is internal company conduct or international regulations, compliance isn’t something that organizations can work around anymore. And it certainly is not where the job is done—in fact it is where it begins.
A single instance can cause failure. And more often than not, it can be a result of the most unassuming miscalculation. JP Morgan was fined $125m because the employees exchanged information about securities business matters on personal texts and emails.
Avoiding such incidents is imperative. And this is why you need a proper Compliance Management System (CMS) in place.
What is a Compliance Management System (CMS)?
A Compliance Management System (CMS) is a comprehensive framework designed to help organizations adhere to regulatory requirements, internal policies, and industry standards. By implementing an effective CMS, businesses can minimize risks associated with non-compliance and maintain consistent regulatory adherence.
Steps you can take to implement the system are:
- Conduct regular audits
- Identify applicable regulations
- Develop policies and procedures
- Assign responsibilities
- Implement monitoring tools
- Provide training
Here’s a video on Compliance Management System you must check out:
Importance of a compliance management system?
Compliance management is important because non-compliance can attract fines, drag you into legal investigations, tarnish your goodwill, deprive you of certification, and cause repercussions that can feel like a bombshell. A Compliance Management System acts more as a precaution than a cure.
It does the groundwork for establishing a rule-compliant organization through guided procedures, automation, and constant monitoring. Everyone’s tied to the compliance goals of the organization and there’s centralised management of the overall progress.
Here’s why having a CMS in place is significant:
1. Painless Risk Management
The regulations that apply to your industry are constantly upgraded or modified in a dynamic environment. If you rely on outdated procedures and guidelines, you’ll not be able to respond to marketplace changes. Having a system in place that will periodically notify you of compliance regulation changes and instruct you on implementing them.
2. Automation
Manual workflows are undoubtedly inefficient. They often involve manually following up with team members and keeping track of threats with outdated tools with automation, tasks are largely scheduled and executed and a lot of human dependency is reduced. A compliance management system brings the benefits of automation and adds nimbleness to the processes.
3. An Edge Over Competitors
If you are a small business that wants to pitch to an enterprise, you’ll be questioned about compliance. Don’t want brands to be in two minds while signing deals? Then you must be compliant to prove your credibility. A compliance certification can set you apart from competitors that are non-compliant.
A CMS makes sure you adhere to the latest standards while driving competitive advantage.
4. Saves You from Monetary Damages
Non-compliance incidents can have financial repercussions. There may be fines and penalties three times the cost of compliance. Managing legal investigations is expensive and to make it worse, banks may impose punitive measures. The costs associated with a loss in productivity and damage recovery is often bigger than the cost of staying compliant.
5. Progress Visibility
A compliance management system brings compliance requirements at one place and helps track progress. You do not need to flip through multiple sheets and documents to check risk assessment reports, audit reports, training status, etc.
A CMS affords companies a consolidated view that helps provide better visibility, remove ambiguity, and eradicate oversight.
Also, check out: How to automate compliance for startups
What are the components of a compliance management system?
Every CMS has a list of components that form the foundation of a strong body of compliance. These components weave a culture that possesses privacy and security at the very core while ensuring processes flow smoothly.
In this section, we discuss the constituents of an effective Compliance Management System:
Cornerstone Policies and Protocol
As a centralized source of truth on compliance, a CMS must distinctly specify policies and protocols pertaining to every aspect, process, and asset. Policy statements should be up-to-date as per the latest regulatory requirements and must be drafted in simple language for every employee and stakeholder.
Security Workflows
Security workflows form the base of every CMS. Whether they help address technical gaps, facilitate training sessions, or execute the protocol, security workflows need to be quick and efficient. A CMS should facilitate better workflows that enable companies to formulate better policies, roll out updates, or take action whenever necessary.
Recommended: Guide to compliance workflow
Entity-level Control
Every employee and vendor is a participant in a company’s compliance program. To stay compliant, companies will need to have control over people, technology, and other assets at a granular level. This often involves analyzing gaps in security at an entity level and carrying out tactical actions that plug these gaps. A CMS must help organizations internally diagnose lapses while proactively providing them a course of action that appropriately addresses them.
Monitoring and Surveillance
The compliance process does not end with certification—it is a never-ending process that helps organizations stay updated with the latest standards and requirements. In order to achieve this, organizations will have to undergo surveillance audits. They essentially entail constantly keeping their eye on their controls, monitor procedures, and making observations that detail lapses over a period of time. A surveillance audit is one way of assessing how compliance-ready an organization is and helps companies gain a sense of structure and confidence before their audit.
Also, check out: List of compliance monitoring software
Employee Training
A compliance management system must enable better training for employees. This means providing organizations with the necessary steps to formulate better policies and train employees with the latest changes.
The right CMS not only answers key questions on compliance but helps provide a forum that employees within an organization can use to stay compliant and abreast with the latest industry security standards.
Internal Audit Management
Internal audits are a great way to identify compliance deficiencies at various levels. They establish a methodical approach to receiving, documenting, and addressing complaints or observations. A CMS helps facilitate the process by enabling internal self-assessment programs and preparing the organization for external audits.
Certification Mechanism
The penultimate step in the compliance journey is the certification process. This often involves collecting and presenting key evidence to an external auditor who checks if processes, infrastructure, and documentation are aligned with certification requirements. The auditor may also visit the company to conduct in-person reviews of the internal controls, and employee interviews, and examine documents as required.
On average, the certification process can take about four weeks. The auditor then compiles an exhaustive audit report highlighting areas of non-compliance. These recommendations must be worked upon within the instructed time frame to avoid any kind of penalties and fines. A CMS helps facilitate the process by connecting organizations with a network of auditors, automating evidence collection, consolidating data, and significantly shortening the certification process.
Recommended: A detailed guide on compliance reporting.
How to set up a compliance management system?
A compliance management software platform setup is an iterative multi-step process. Usually, this is what the procedure looks like:
1. Assessment and gathering requirements
Thoroughly evaluate your compliance requirements, procedures and any pain areas that need to be addressed. Include all the stakeholders and recognize the extent of this process, from the law, regulations and policies that you will have to address.
2. Evaluation and selection
Examine various CMS options in light of your financial constraints and business needs. Decide on a small number and take into account elements such as vendor support, scalability integration potential and user experience. Schedule a demo call after you’re finished to gain more insight into the product.
3. Put into practice
Form a team of a project manager, IT support, and subject matter experts. This group will oversee the implementation. The group will schedule the timeline, milestones, data migration, and resource allocation.
4. System configuration and customization
Configure the CMS platform in accordance with your business requirements and procedures. Tailor the features of the CMS to align it with your compliance regime. If you have any other relevant systems, connect them too to facilitate smooth integration.
5. User training
Conduct training programs for all the users. Educate them on the features, procedures, and the best practices. To ensure that there is minimal resistance and smooth user adoption, encourage open dialogue and transparency.
6. Data migration and testing
Transfer current data and any other policies to the new system. Test the system’s acceptability from users to make sure it works as intended. Close any gaps before the launch
7. Going live
Follow up with feedback and changing regulatory compliance requirements to continuously monitor and optimize the system after it goes live.
8. Iterative process
The process of managing compliance involves iterations. In order to stay in line with modifications to organizational procedures, laws, and regulations, you will need to periodically review and update the CMS platform. Follow the vendor’s recommendations for applying all system upgrades, patches, and updates.
Compliance management system software
Here are a few best compliance software you can look into:
1. Sprinto – 4.8/5
Sprinto is a compliance automation platform that enables cloud-based companies to manage security compliance, enable seamless compliance audits, and rectify failing controls for a strong security posture. It streamlines compliance workflows and automates control monitoring while ensuring your company adheres to regulatory standards.
With Sprinto, companies can seamlessly implement security controls, gather evidence of compliance, and present this information to the auditor in a manner that is easy to comprehend and evaluate.
Sprinto’s trust center also create a customized security profile that highlights your organization’s security practices, compliance certifications, and audit reports
Sprinto is designed to take the burden off managing security compliance and make compliance easy.
Key features
- Sprinto supports over 20 security compliance frameworks, including SOC 2, ISO 27001, HIPAA, PCI DSS, and more. You can layer multiple programs, including custom programs and track compliance.
- The platform reduces manual efforts by automating the entire compliance lifecycle, from compliance risk assessment and control implementation to continuous monitoring.
- Sprinto integrates with over 200 cloud services, so that you can get deep insights into your tech stack and streamline control mapping.
- Sprinto offers an auditors dashboard where it collects all the evidence, giving you a frictionless and one click auditor connection.
Pricing: Talk to our experts for a price that is tailored to your needs.
2. Audit board – 4.6/5
Auditboard is a risk management platform that helps companies streamline their audit, risk management, IT security, and ESG initiatives. It does so by combining all of these functions into a single platform, giving you a birds eye view of your org’s risk landscape.
Key features
- The platform offers pre-built workflows and automation capabilities. It covers various tasks like audit planning, control testing, issue management, and risk assessment.
- Auditboard has different modules that cater to the specific needs of an organization, from SOX compliance, risk management, third party risk management, and ESG management.
- Auditboard aligns risks with your organization’s objective, enabling real time and risk informed decisions.
- The platform also offers built in workflows for various risk management processes, such as control testing, risk management, and audit planning, among others,
Pricing: Schedule a demo with Auditboard to get details on pricing.
3. Hyperproof – 4.6/5
Hyperproof is a compliance and a risk management platform that efficiently manages multiple compliance frameworks in a centralized location. It integrates with platforms like AWS, Jira, and ServiceNow to collect evidence. It automates various tasks from evidence collection to audit preparation.
Key features
- Hyperproof provides access to over 100 pre-built framework templates like SOC 2, HIPAA, GDPR, and custom frameworks. It allows mapping controls across frameworks and assigning owners to specific projects or groups.
- Hyperproof gives you real time visibility into compliance and risk posture through dashboards and reports that can be customized to your needs.
- The platform offers a risk register and reporting capabilities to help teams collect, track, prioritize and mitigate risks in a single place.
- It has a user-friendly interface that allows for ease of navigation through various compliance assessments.
Pricing: Hyperproof has tiers with each tier priced based on the headcount. You will have to fill their demo page to know more.
Thoropass – 4.7/5
Thoropass is a compliance management platform that enables organizations to handle multiple compliance framework standards. It provides various tools, integrations, penetration testing, and more.
Key features
- Thoropass supports various frameworks like SOC 2, ISO 27001, HIPAA, and other standards. It also ensures adherence to security protocols.
- It integrates with a wide range of tools and platforms to enable a smooth integration.
- Thoropass is customizable as it allows businesses to tailor the solution to their specific requirements.
- The platform consolidates various compliances into a unified platform, simplifying compliance management for your business.
Pricing: Schedule a demo with Thoropass to get details on pricing.
How Can Sprinto Help?
A compliance management system acts as a centralised place to give you clarity, control, and confidence on compliance functions. You’d otherwise be shooting arrows in the dark trying to meet compliance requirements while struggling with frequent disruptions.
Sprinto makes security compliance automation a seamless experience. The tool helps organizations such as yours pay attention to the smallest of details while helping you roll out policies, and enable adherence with ease.
We’d like to show you how it’s done. Book a demo with our experts and experience faster, smarter compliance.
FAQs
What is a Compliance Management System (CMS)?
A Compliance Management System is a management framework with integrated tools, documents, and controls that simplify compliance. When you automate compliance procedures, it shields you from risks associated with non-compliance.
What is an example of a compliance management system?
A great example of a Compliance Management System would be the patient information management system in the healthcare industry. CMS for a healthcare provider will ensure the security and privacy of Protected Health Information. Any demographic or personal information that can help identify a patient will not be accessible to unauthorized parties.
What are the benefits of a compliance system?
A compliance management system ensures better customer trust, saves costs and time, automates compliance processes, and reduces risks associated with non-conformities. They also help you identify vulnerabilities faster and make smarter decisions to correct them.
What are the two main types of compliance?
Corporate and regulatory are the two main types of compliance. Corporate compliances pertain to rules and regulations governing internal policies and regulatory compliances ensure adherence to external laws and regulations.
