Most corporations are not reaching acceptable levels of compliance, even as they spend more to implement multiple compliance mandates, according to the ControlPath Compliance Progress Survey released today.
The survey also found that 72 percent of large corporations lack confidence that they are complying with all applicable regulations. In addition, the cost of compliance is clearly on the minds of senior management â when ranking the most challenging aspect of compliance, the cost to manage compliance was the clear winner, cited more than all other issues combined (51 percent).
According to the ControlPath Compliance Progress Survey, managing compliance for regulations such as Sarbanes-Oxley, HIPAA, GLBA, and PCI is still highly manual and follows disparate processes for each regulatory compliance mandate â boosting the cost of compliance to an all-time high. Across the board, compliance costs continue to rise as more compliance regulations are being implemented within organizations.
The survey, conducted by ControlPath Inc., a developer of automated compliance management software, measured attitudes of financial and technology leaders focusing on the level of success implementing compliance programs. The online survey was completed by 132 senior executives during August 2006.
With most public companies needing to comply with several regulations, multiple processes are in place for 70 percent of all respondents, creating a compartmentalized approach to compliance. For most enterprises, manual processes include a disconnected combination of word processing documents, spreadsheets, databases, and email trails. Less than a third reported that they leverage processes across multiple regulations.
With manual processes dominating compliance, 45 percent of respondents reported that they thirst for better technology to comply with the regulations. Today, just 27 percent are leveraging some form of compliance management tools.
âAs the cost of regulatory compliance continues to grow, corporations are stepping back and asking themselves hard questions about how to make the process more efficient,â said Scott Crawford, Senior Analyst, Enterprise Management Associates, Boulder, CO. âComprehensive management of the regulatory compliance workflow is where many companies will find significant savings that will directly benefit their compliance efforts.â
Survey results supported Crawfordâs prediction and the use of automation to achieve compliance. Respondents who are either fully or mostly automated were twice as confident that they are in compliance than those whose processes are entirely manual â 48 percent versus 23 percent.
âCompanies are asking how they can drive the costs out of their compliance processes. Executives responsible for managing, reporting and maintaining compliance are now asking for help,â said Scott Walker, Chief Executive Officer, ControlPath. âTheir request is to create more automated processes that can be applied to all compliance mandates.â
Other key findings from the ControlPath Compliance Progress Survey include:
â¢ 74 percent of survey respondents described their compliance process as either entirely manual, or more manual than automated.
â¢ Key barriers to compliance reported by survey respondents included:
o Limited budget, 41.9 percent,
o Lack of education on compliance mandates, 47 percent,
o Lack of tools to manage the compliance process, 37 percent, and
o Lack of detail in compliance regulations, 32 percent.
â¢ Corporations average 1.8 compliance regulations per company.
The Compliance Progress Survey is the first of a series of compliance trending reports. The next survey will be done in 2007.