Johannesburg, 09 Jul 2020
Considering how essential regulations are for helping guide South Africa's emergence as a democracy compliance is more than just being aligned with the law. It's a social development tool, and also a business development tool.
Compliance is a bad word in some circles. It's a begrudged necessity to doing business, but is also notorious for creating complexity and even uncertainty. Yet the COVID-19 pandemic inadvertently demonstrated some of the benefits of being a compliant company.
"One of the things from the government, from the word go, was that if you made your various statutory payments, you could access support during the pandemic," said Gerhard Hartman, Sage Africa & Middle East's Vice-President for Medium Business. "The companies that were always compliant could immediately access benefits. In a crisis situation like this, if I were someone that maybe didn't comply fully before, I would rethink matters and say, 'We don't know what the future holds. If such a crisis happens again, then I can access benefits from the government, if I were properly registered.'"
Compliance defines the legal relationship between a state and the business operating within the country. It also covers business relationships with entities such as bargaining councils. The purpose of compliance is, ultimately, development through policy, which is why the World Bank's Doing Business index notes that where systematic compliance is lacking, regulatory changes will not achieve the desired results of policy.
As mentioned above, compliance extends to many different entities that collaborate with an organisation and help sharpen its competitive-edge. Beyond that, compliance can also have a cohesive and collaborative effect within an organisation.
Reining in compliance's variability
To understand this last point, we must appreciate the complex nature of compliance. A compliance committee would take an expansive view of compliance requirements, whereas compliance for a department such as human resources is a much more nuanced requirement. Even such grassroots examples are not uniform: HR would worry about employee-related compliance, whereas finance might want compliance to make faster payments and gain early-bird discounts or manage statutory deductions.
Compliance will have a different flavour depending on who it concerns. This variability is why compliance is such a frustrating challenge for many organisations, and why most don't gain the fuller advantage of their compliance investments. It's hard enough just staying on top of the different requirements. But overcome that, and you open up several new doors for the business.
"Companies often struggle to know if they are fully compliant," said Hartman. "They don't have a full view of their compliance and how it can interconnect. It's also a moving target, and they have to review their compliance on a regular basis. This is why software can be the gel that holds compliance together."
Modern software platforms have become incredibly useful for compliance. Software, through applications and data, already touch all the areas that also need to comply. Collecting information and managing the output of that information, such as a report in a specific format, all fall under software services.
"When you're on this compliancy journey, you should expect information to flow freely. Software gives you access to information. If you have access to information, it should give you more collaboration between whether it's internal; colleagues, different departments or employees, or externally; better collaboration with suppliers and customers."
Software brings compliance together
In other words, software can link compliance together into a tool for business, not just a way to stay within the rules and regulations. Though not any one piece of software can cover all of these bases, that isn't necessary. Modern integration that provides single sources of the truth also does the same for compliance, and several different software platforms can contribute towards the compliance environment.
But pick such software with a critical eye and a clear view of the outcomes. Local compliance should be baked into the software, such as the laws of the country or the requirements of different industry verticals. By including such 'commodity' compliance requirements, the right software can significantly reduce the complexity and turnaround time of compliance management and visibility. These, in turn, create room to focus on the more bespoke compliance requirements of a company.
Compliance can be much more than a grudging necessity. The pandemic has revealed the benefits of being compliant with the state. Compliance can also play a competitive role, and facilitate the free flow of information to encourage strategic collaboration within and among partners. Software platforms have made this possible, even as compliance continues to evolve.
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