Here’s 3 core reasons why you should.

Business process outsourcing has permeated various industries to different extents. But the base case is the same — if a non-core function is standard within an industry, and can be codified in a step-by-step manner, then it is possible to have a third party perform all those functions for a number of companies for a reduced cost for each of those companies.

 

There are at least three aspects of the compliance process that can be outsourced to a managed service provider/vendor:

1. Regulatory Change Management
2. Internal/Self Audits
3. Reporting

Keeping track of changes in regulations is non-core, easily standardized for all companies in an industry. Self or mock audits follow the same standard process that an external auditor would follow. Regulators demand the same level, extent and format of the reports from all companies in a particular industry.

Now, why should you explore the use of outsourced service?

1. Cost. A vendor serving multiple companies can offer each company a lower cost that what each of the companies would incur for the same service provided internally. Furthermore, the vendor is incentivized to automate and lower costs even more, as time goes on.
2. Best Practices. The contribution of each of the client companies will make the vendor’s offering more in line with industry best practices and everyone benefits from contributing to enhance/refine the vendor’s offering.
3. Staying Ahead. In order to stave competition and provide the best service, the vendor has to be proactive and liaise with regulatory bodies. The vendor has to build functionality into the system ahead of the rules being published and enforced. In today’s world, an internal department for the most part is reactive.

Most small and medium-sized businesses will benefit from outsourcing while large companies, given their geographic breadth and business complexity, will have to use multiple vendors to achieve the same goals.

Going on this path is a journey and one should choose a good partner. Stay tuned for our next blog post. We’ll look at various criteria for selecting an ideal managed service partner for compliance process execution.

 

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