Top 5 Benefits of a Cloud-Based Control Library
Streamline compliance practices and reduce risk with a centralized cloud-based library of internal controls
Finding ways to streamline processes, increase efficiency, improve compliance, and reduce exposure are top priorities for compliance teams. One, often-overlooked way that enterprises can become more agile and accurate in their compliance and risk practices—particularly for internal controls—is through the implementation of a cloud-based control library.
By centralizing control data and automation scripts in the cloud, organizations can enhance their compliance posture, reduce risks associated with non-compliance, and improve overall operational efficiency.
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What is a Control Library?
A control library is a centralized repository that houses a collection of control measures used by an organization to manage risks and ensure compliance with internal policies and risk tolerances as well as external regulations and standards. These internal controls function as specific actions, procedures, or mechanisms that an organization implements to mitigate identified risks, enhance operational efficiency, and achieve compliance with legal and regulatory requirements. Libraries can organize preventive internal controls, corrective internal controls, and detective internal controls.
Organizing these controls into a library is a key component of compliance operations and overall operational objectives. It provides comprehensive inventories of all data critical for managing compliance and risk treatments.
For example, the Sarbanes-Oxley Act (SOX) mandates stringent requirements for financial information, financial reporting and internal controls within organizations. Entity-level controls, which are the overarching policies and procedures ensuring an effective control environment, play a crucial role in complying with SOX. A cloud-based control library can enhance these preventative control activities by providing centralized access to up-to-date control frameworks, facilitating real-time monitoring, and enabling swift implementation of necessary adjustments across the organization.
Even with the swell of digital transformation across industries, most companies still manage their control operations with manual spreadsheets. This method can be unreliable due to human error, irregularities, or out-of-date versions. In contrast:
- Single Source of Truth: Storing data on a digital platform in the cloud gives teams access to a single source of truth in real-time.
- Collaboration: This unified “single pane of glass” offers clarity while eliminating manual errors.
- Efficiency: Real-time updates ensure everyone has access to the most current information without version conflicts.
Consider two different compliance teams looking to make an update to cybersecurity controls:
- Team A uses spreadsheets listing every control’s description, status & last update date. The project manager must edit line items manually which may lead to confusion if multiple users edit simultaneously.
- Team B uses automated software where thorough documentation is active within its cloud platform, enabling authorized users real-time viewing & editing without conflicts.
Which team has a better chance at consistently achieving compliance objectives?
Benefits of a Cloud-based Control Library
Today over 90% organizations utilize cloud computing owing its cost-effectiveness speed efficiency security benefits placing workloads applications such as internal controls libraries offers practical solutions compared traditional methods here five key benefits:
Accessibility & Collaboration
Centralizing all information makes it easier for employees across departments and locations to access the same resources. This ensures uniformity, reduces discrepancies and errors, and fosters better collaboration. For large, distributed organizations, centralization is particularly useful in coordinating efforts effectively across regions and departments. Authorization practices play a critical role in this process by ensuring that only authorized personnel can access sensitive information within the centralized system.
A real-life scenario might involve a global company needing to standardize its cybersecurity protocols globally. Having a centralized repository ensures everyone follows the same guidelines irrespective of their location. This enhances consistency, quality, and adherence to standards.
Improved Audit Readiness
With documented storage in place, preparing for internal audits becomes straightforward. Auditors are granted controlled read-only access to review practices and documentation, significantly reducing preparation and execution time and effort. Consider a financial institution undergoing an annual audit; traditionally, this involves sifting through numerous files and documents. Now, by simply granting auditors access to the required files instantly, significant man-hours are saved. This not only expedites the process but also demonstrates transparency, corporate governance, and regulatory compliance within the systems.
Security Reliability
According to Statista, over 72 percent of businesses were affected by ransomware last year. This highlights the paramount importance of security measures for providers. Control libraries can guide the implementation of encryption techniques, define secure access protocols, outline procedures for regular audits, and establish robust backup systems. Leveraging control libraries allows businesses to systematically address vulnerabilities and enhance their overall cybersecurity posture against threats like ransomware.
Another layer of protection comes from leveraging cloud-based libraries for data storage. By storing data in a secure, cloud-based environment, businesses can effectively manage disaster recovery scenarios without the need for multiple physical locations. For example, a healthcare provider managing patient records ensures HIPAA and GDPR compliance by storing encrypted formats in the cloud. This guarantees the availability and integrity of data even in catastrophic events.
That said, you could think of a cloud-based library itself as a preventative internal control essential for safeguarding against such threats and ensuring robust data protection strategies are in place.
Cost-Effectiveness
Using a cloud-based control library solution reduces costs associated with maintaining physical servers, infrastructure, and personnel managing resources. Operating with a subscription model for this service is also more cost-effective and manageable than traditional capital expenditures with on-going, manual up-keep. Further savings are realized through reduced downtime and increased productivity, as fewer resources are dedicated to maintenance and repairs. Improved budgeting and predictability are also achieved through preventative control activities.
Easier Reports, Updates, and Integrations
Many systems come equipped with robust monitoring and reporting capabilities. By organizing internal controls in a cloud-based library, officers can easily track real-time alerts and issues, generating comprehensive reports for management and regulatory bodies quickly and efficiently. This streamlined approach is crucial for safeguarding company assets and achieving company objectives, especially given the frequently changing landscape of regulations. With such systems in place, updates to new regulations or amendments to existing ones can be implemented swiftly, ensuring continuous compliance with laws and standards.
Additionally, these systems often integrate with other platforms within the organization, such as ERP or HRM systems. This integration streamlines workflows and enhances consistency across platforms. Imagine a manufacturing firm integrating its environmental health and safety system: it could automatically update related procedures based on the latest OSHA guidelines. This seamless process ensures up-to-date safe practices while maintaining strong internal controls and accountability throughout the organization.
Additional Considerations for Implementing Cloud-Based Control Libraries
When considering transitioning traditional methods following factors should evaluated ensure smooth transition maximum benefit realization:
- Vendor Selection: Choosing the right vendor is critical for success. Evaluating potential vendors based on criteria such as security features, scalability, customer support, reputation, and industry experience is essential. Conducting thorough research by reading reviews and seeking recommendations from peers and industry forums can be beneficial in making an informed decision that aligns with organizational needs and goals.
- Data Migration Strategy: Developing a comprehensive strategy for migrating existing legacy systems to a cloud-based control library is crucial for minimizing disruptions and ensuring continuity of operations. This involves assessing the current state of your control library, identifying gaps in functionality or data integrity, planning a phased approach to migration, and rigorously testing and validating the migrated data to ensure accuracy and completeness throughout the process. If your data and processes are complex, it would be worth engaging consultants who specialize in cloud migrations to expedite and avoid pitfalls.
- Training & Change Management: New tools can seem like a hassle to learn. According to a study by Technology Services Industry Association (TSIA), companies that apply comprehensive training programs for SaaS products see a 68% higher adoption rate compared to those that do not. Investing in training programs to educate stakeholders on the importance of functionalities can maximize adoption rates. By addressing resistance to change proactively and involving end-users in the early stages, you can gather feedback and incorporate suggestions. This fosters a sense of ownership and acceptance, leading to smoother transitions and higher satisfaction levels.
- Ongoing Maintenance Monitoring: Post-deployment continuous monitoring is essential for maintaining optimal performance and safeguarding against emerging threats. Regular updates and patches play a crucial role in this process. By leveraging analytics tools, we can gain insights into usage patterns, identify areas for improvement, and optimize configurations. Periodically reviewing policies and procedures allows us to adapt to the evolving landscape and stay ahead of the curve.
Building managing using platform transformative impact businesses today’s digital landscape adopting automation tools allows comply readily adapt scale future changes
Real-world Examples of Cloud-based Libraries for Internal Controls
To further illustrate advantages let’s delve into some practical examples showcasing tangible improvements experienced various sectors post-adoption:
Financial Sector
A multinational bank faced challenges in maintaining updated records due to myriad international regulations across different jurisdictions. Rather than risk being among other accounting scandals, they implement a centralized control system, which helps them prove accuracy in their financial reporting process. Consequently, they saw a significant reduction in audit preparation times and enhanced their ability to respond promptly to regulatory inquiries. This ultimately bolstered confidence among stakeholders and regulators alike by ensuring reliable financial reporting for every financial transaction.
Healthcare Industry
Hospitals and clinics dealing with sensitive patient information must adhere to stringent HIPAA and GDPR requirements. They have found it invaluable to use a cloud-based library for internal controls within the healthcare industry. This approach ensures uninterrupted service delivery even during localized outages. Additionally, it facilitates the swift retrieval of necessary documentation during inspections and audits, contributing to an overall improved patient care experience. Implementing preventative internal controls and risk responses further enhances their ability to manage compliance activities effectively.
Manufacturing Firms
Global manufacturers adhering to diverse safety and environmental standards have benefited from integrating Environmental, Health and Safety (EHS) platforms with cloud-based control libraries. This connection leads to more standardized procedures and preventive control activities across all site locations, and by disseminating updated guidelines immediately, companies minimize incidents of non-compliance and ensure safer working environments for employees worldwide.
Future Trends in the Evolution of Compliance Management
As technological advancements continue to shape the landscape, several emerging trends are poised to redefine business operations. These include artificial intelligence, machine learning, predictive analytics, and blockchain technology. Each brings unique strengths in addressing the complexities of contemporary environments. Exploring the potential of these innovations can help businesses enhance their internal controls and expand their control library. Staying ahead of the curve will enable seamless integration of cutting-edge solutions when appropriate.
Are you ready to build your cloud-based control library? Reach out to our GRC experts today at hello@onspring.com.
