Behind every successful product and product launch lies a complicated process that can involve multiple oversight agencies, cross-functional teams, and stakeholders. Within an organization’s governance, risk management, and compliance (GRC) framework, product teams must pursue market innovation while remaining in compliance. Staying in compliance with the vast array of rules, procedures, and contract clauses that govern product development can be a full-time job, and lack of management can lead to delays and failures that result in lost revenue, damaged reputation, or even legal action.
With so much on the line, every development project should have a process within the GRC framework to monitor compliance risk and compliance activities along the way. Unfortunately, compliance management can be difficult to integrate into the full design process, and compliance delays can hold up a product launch. Product teams often need a better way to integrate compliance management into the development process. Those teams that include compliance management in their processes can reduce the risk of failure—and potentially improve their speed to market.
What is compliance management, and how does it help product teams ship on time?
Compliance can refer to a variety of different laws, guidelines, standards, processes, procedures, or other controlling documents, including contracts. Compliance management refers to the intentional process by which designated team members or compliance officers monitor and control design, development, launch, and fulfillment to ensure that all legal, contractual, and procedural requirements are met.
Ideally, compliance management involves both people and a system that is fully integrated across functions of the organization. The more integrated the compliance management in the development lifecycle, the more likely it is to detect potential compliance issues before they cause long-term harm to companies or consumers.
A fully integrated compliance management system can help your product team ship on time or early by keeping all compliance factors top of mind during the design, development, and fulfillment process. When teams are ensuring compliance throughout the entire development lifecycle, unforeseen delays and consumer issues are less likely to derail product success.
To fully integrate compliance management, teams need a development process that includes touchpoints for assessing compliance. The process should include activities such as:
- Standard operating procedures
- Safety and security procedures
- Reporting and documentation
- Internal and external audits
Integrating all of these activities will help ensure that teams are fully prepared to establish compliance with applicable standards, regulations, and laws before launch, reducing the possibility of costly delays or failures.
What is compliance control?
Compliance control is a set of guidelines and policies designed to provide a framework for compliance to product teams and stakeholders. These guidelines and policies apply to everyone involved in compliance management—from board of directors to compliance officers or compliance managers to team members.
Common internal compliance controls can include the following:
- Published standards, policies, and operating procedures
- Training and documented completion of training
- Internal audits
External compliance controls are those that originate anywhere outside the company:
- Laws and regulations
- Industry standards
- External audits
- External risk assessments
What is a compliance management system?
A compliance management system is a program that integrates written documents, processes, functions, controls, tools, and anything else that helps organizations comply with regulations and reduce risks to consumers that arise due to violation of applicable law. While a comprehensive compliance management system will include appropriate tools such as software, it will also clearly define the roles of various stakeholders, including:
- Team members
- Compliance officers or compliance managers
- Board of directors
- Internal auditors
The compliance management system will also define processes for:
- Assessing and responding to consumer complaints
- Addressing results of a compliance audit
- Providing relevant compliance training as appropriate
- Keeping informed of regulatory change
- Taking corrective action when products are found in violation
Why is maintaining compliance so important for product teams working in regulated industries?
Former US Deputy Attorney General Paul McNulty has stated, “If you think compliance is expensive, try non-compliance.” In any industry, non-compliance can lead to fines, product failures, and lawsuits—not to mention the cost of lost reputation, customers, and business.
For teams working in regulated industries, maintaining compliance is especially important as there are often unique safety and regulatory issues at hand. In industries such as automotive, aerospace, and medical devices, one product that fails to meet regulatory or legal standards could potentially lead to the kind of product failure that results in loss of property or human life.
Studies by the Ponemon Institute reveal that non-compliance can cost as much as 2.65 times what compliance costs. What’s more, the institute found that non-compliance costs increased by 45% between 2011 and 2017.
What are best practices for compliance management?
While the specific practices for compliance management will vary according to industry, there are some best practices for compliance management that any product team can use to ensure a successful product launch.
- Identify compliance officers: If your company doesn’t have a dedicated compliance officer, identify someone on your team who can at least serve as an ad hoc compliance officer. Identifying the right person (or people) early in the development process will give a central point of contact so that no one is wondering who is in charge of compliance.
- Learn relevant requirements: All members of the team should at least have a familiarity with the regulatory and legal environment around product development. In addition, everyone should subscribe to government and industry mailing lists or websites to stay up-to-date on changes to regulations. One study found that regulatory monitoring saved companies an average of $1.03 million.
- Create a central repository of requirements: Rather than simply documenting requirements that are relevant only to one team or project, companies should create a central source of information for all compliance requirements, including internal procedures and standards. With one central source for all teams to access and contribute to, teams are less likely to miss requirements in the development process.
- Establish traceability between requirements and standards, regulations, and other relevant compliance documents: By documenting traceability between the compliance requirements and project artifacts, product teams create a robust analysis tool that can provide invaluable detail and information for audits and reviews.
- Implement tools that support compliance management: While there’s no substitute for having human input and control over compliance management, there’s no question that having the right tools can make compliance a more manageable task. The right tool will support product teams by providing a central source for traceability, requirements management, analysis, documentation, and all related activities.
What makes a compliance program effective?
A comprehensive and effective compliance program will:
- Reduce costs: When teams have a program in place for comprehensive compliance management, it’s almost inevitable that the team or company will save money overall.
- Improve risk management: Evaluating and assessing risks throughout the lifecycle will improve risk management across the development lifecycle. Good compliance management will help teams identify and assess risks early in the development process.
- Keep product development well within organizational GRC framework: An effective compliance program will keep development in compliance with internal controls and the overall organizational GRC framework.
- Improve speed to market: When compliance is fully integrated into product design and development, the risk of delays drops, and chances of shipping on time or early increase.
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What tools and software can help product teams maintain compliance during the application lifecycle?
A compliance management solution is an important piece of any compliance management system. Within the overall framework of a compliance management system, a compliance management solution will support workflows, self-assessments, surveys, and issue remediation. In addition, intuitive dashboards and charts can provide real-time insights into compliance processes.
How can Jama help teams working in highly regulated industries, like medical and aerospace, maintain compliance during the application lifecycle?
Jama Connect gives product teams the tools they need to integrate compliance management into the design lifecycle. By tracking requirements and giving teams the traceability they need, Jama Connect simplifies compliance management by integrating it fully into the application lifecycle. To learn more about Jama Connect, contact us for a demo.