The need for firms to increase company-wide agility to quickly respond to business changes and customer needs has been well documented. At the same time, companies within a number of markets are facing an increasing number of regulatory compliance issues, and the impact of compliance issues on business flow is noteworthy. This article examines the dichotomy of being flexible in order to meet customer needs while working within corporate and government mandates to maintain regulatory compliance.
The Agile Business
An agile business responds rapidly to changes in its business environment. These changes can be regulatory, competitive, market or customer attitude-driven. For example, a new anti-Spam law in a particular state or a new loan product introduced by a competitor could represent a large change in how business is conducted. In the past, companies have addressed this by introducing new technology that might produce a report that shows that consumers are now more worried about identity theft than about check theft. Any one of these changes in a company’s business environment requires a change in the way it does business.
When these kinds of changes happen, an agile business can apply new strategies to its operations quickly and accurately. Today, many companies recognize that their information systems are often the last thing to adapt to a change. An agile business can change its systems more rapidly, allowing it to get new products and services to market fast. Ideally, an agile business can ensure that strategic business changes impact operations directly and quickly while eliminating time and accuracy lag between the business and IT.
Lastly, an agile business can assess the impact of new regulations, processes, and products on its business. It can get answers to questions like “Can we afford to respond to this competitor’s pricing,” “Do we need to raise prices,” “If we approved people differently, how much more revenue might we get and how much more risk would we have to take on?” Unless a business can get good answers to these questions in advance of making changes, then it is gaining agility at the expense of risk exposure.
Regulatory Compliance Today
Today regulated businesses have to enforce rules, from different sources, in a context-sensitive way. Businesses must apply state, federal, and international rules at different steps in their processes. For example, even something as outwardly ly simple as an email marketing list involves managing overlapping state-specific rules concerning whether consumers must opt-in or opt-out and what a business must do to allow them to do this. As businesses expand internationally or develop a web-presence that can be accessed from multiple countries or as they merge with or acquire other companies, the range and number of rules with which they must comply grows exponentially.
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