All About Regulatory Change Management
Do you ever feel like you’re playing catch-up with new regulations or never-ending updates to existing laws in your industry?
Just when you think you have everything under control, regulatory changes roll in, and you’re back to the drawing board to figure out compliance all over again. This can be overwhelming.
However, failure to keep up with the changes can be a nightmare for any organization. It could mean parting ways with millions of dollars in settlement fees, getting involved in long, expensive legal battles, or even losing investors.
Fortunately, you can mitigate these risks with regulatory change management (RCM). The right strategies help you stay ahead of shifting legal requirements and avoid the ugly consequences of noncompliance. Dive in to understand what RCM means, why you need it, and what are the best practices for implementing it in your organization.
Table of Contents
What Is Regulatory Change Management?
The Regulatory Change Management Process
Challenges in Regulatory Change Management
Regulatory Change Management Best Practices
Tools and Technologies for Regulatory Change Management
Impact of Regulatory Changes on Businesses
Building a Regulatory Change Management Framework
Future Trends in Regulatory Change Management
Regulatory Change Management Made Simple
What Is Regulatory Change Management?
Regulatory change management is the process of keeping up with rules that affect your business. It involves tracking updates to laws, understanding what the changes mean for your operations, and adjusting your policies and practices to stay compliant.
In other words, it’s about staying on top of evolving regulatory requirements to avoid any issues down the road.
Why Is It Important?
Done correctly, RCM has multiple benefits, including:
- Avoid legal troubles: Regulations change constantly, and missing even one minor update can lead to costly fines and penalties. RCM helps you track and comply with the latest rules to avoid legal repercussions.
- Stay ahead of regulatory changes: With RCM, you establish a plan in advance for complying with new or amended rules. So, when regulatory changes occur, you already know what steps you’ll take and who will adjust your operations to meet the new requirements. Preparing early and properly makes compliance management less stressful and more effective.
- Protect your business reputation: Your customers, investors, and business partners want to know they can trust your organization to follow the law and operate responsibly. Keeping up with regulatory changes helps maintain that trust.
The Regulatory Change Management Process
Are you wondering how to prepare for regulatory changes and successfully implement them in your business? Follow this step-by-step guide.
Step 1: Anticipating and Tracking Regulatory Changes
Keep an eye on proposed legislation in your industry to get a heads-up on the upcoming compliance requirements. When you anticipate regulatory changes before they happen, you give yourself time to prepare early instead of struggling to catch up with new requirements after they are put into play.
You can track regulatory changes by:
- Regularly checking the websites of relevant legislative bodies or regulatory agencies
- Following industry news
- Subscribing to email alerts from regulatory bodies
- Joining industry associations
Want to make the tracking more effective and nearly effortless?
RCM software solutions like Onspring automate the process. They help you track regulatory changes in real time so you can start preparing as soon as possible.
Step 2: Understanding How the New Compliance Requirements Affect You
Once you know what regulations are coming, the next step is to understand how they impact your business.
Not every new rule or regulatory update will apply to you. However, the ones that do might require changes to your operations, products, or services. So check the latest rules and figure out what you need to tweak. For example, regulatory amendments may require your organization to modify a process, update a policy, or train your team on new procedures.
Step 3: Creating a Plan To Put Regulatory Changes into Action
Even before new requirements are finalized, your organization should have outlined the basic steps to meet them. Planning ahead is one of the most effective regulatory change implementation strategies.
Determine what internal adjustments are necessary to stay compliant, who is responsible for making them, and the implementation timeline. What matters the most at this stage is being organized and thorough. That way, you don’t miss anything in the latest regulations and are fully compliant when new rules kick in.
Step 4: Keeping Your Team Informed and Ready
If a new compliance requirement involves employees, keeping your team in the loop is necessary for successful regulatory change management. In that case, make sure staff members understand:
- What’s changing
- How the changes affect their work
- What they need to do to stay compliant
Training sessions, team meetings, or simple email updates can prepare employees for new workplace practices driven by regulatory changes.
Step 5: Monitoring and Reporting
Even after implementing regulatory changes in your company, your job isn’t done yet. The final step of regulatory change management is to continuously watch out for changes in regulation so that you can comply with new rules as soon as they take effect.
You also need to constantly monitor your operations and make sure everything is working out as planned. Regular compliance check-ins and reporting will help you catch and address regulatory issues early before they escalate. Plus, if your organization is required to report its compliance efforts, documenting everything makes the process much easier.
Challenges in Regulatory Change Management
Businesses consider regulatory compliance a burden for four main reasons.
Too Many Complex Regulations
A typical U.S. company has to follow municipal, state, and federal regulations — each with different requirements. For organizations that operate worldwide, international rules get into the mix. Compliance becomes more difficult as all these regulations change frequently.
Managing Compliance Across Different Jurisdictions
If your company operates in multiple U.S. states or several countries, compliance becomes trickier compared to an organization that does business in one jurisdiction. You have to deal with additional regulations, and following all of them to the letter can be overwhelming.
Limited Resources
According to 2023 research, the cost of compliance is skyrocketing. The reason? The demand for skilled compliance staff is increasing. There is also a need for additional employees to deal with the rising volume of regulatory requirements.
In other words, regulatory change management is becoming more expensive. However, most businesses, especially small and mid-sized ones, have limited resources to keep up. This makes it challenging to stay on top of changing compliance requirements.
Difficulty Connecting RCM Software With Other Business Tools
RCM solutions centralize regulatory change data and automate tasks. There are plenty of options in the software market, but not all of them readily connect with the tech solutions your team uses daily.
When it’s too challenging to integrate RCM software with your existing tools, your regulatory change data and workflows might get stuck in separate systems. As a result, it becomes harder to get a unified view of regulatory changes and compliance status across the entire organization.
Regulatory Change Management Best Practices
You can overcome RCM challenges by implementing the following top tips.
Manage All Your Regulatory Data and Tasks in a Single Place
If you’re like most businesses, you deal with multiple regulations. Managing all of them in one platform makes everything simple and efficient. With a software solution that centralizes regulatory change management, you can easily track and tie each regulation to specific processes and policies you need to adjust to stay compliant.
Develop a Robust Compliance Culture
Create a workplace environment where following the rules is part of the daily routine. To achieve this, your team must understand the industry regulations that apply to your organization, why they should follow them, and what they can do to ensure compliance.
You can promote a compliance culture in the workplace by:
- Developing and communicating clear policies and compliant work procedures
- Investing in compliance training for employees
- Encouraging managers to commit to compliance so they can lead by example
Take Advantage of Technology to Automate RCM Processes
RCM solutions can automate time-consuming processes and make your regulatory change management more efficient.
For instance, instead of manually reviewing regulatory documents to identify relevant modifications, powerful RCM software can automatically track regulatory changes and notify compliance teams. It can also automatically examine the impact of those changes on your business, allowing you to evaluate and mitigate risks quickly.
Continuously Monitor Compliance
Monitoring your compliance efforts is essential because regulations change frequently. RCM solutions like Onspring can track how well your business follows the latest rules in real time. This way, you are aware of regulatory changes as soon as they occur, helping you stay compliant.
Tools and Technologies for Regulatory Change Management
The right tools and technologies make it easy and quick to deal with regulation changes. Common tech solutions in regulatory change management include:
Regulatory Change Tracking Software
Technological tools for tracking regulatory changes help you monitor any new rules or updates that apply to your industry. Instead of manually searching through agency websites or government publications for regulatory changes, the software does the heavy lifting for you. With the right solution, you can focus less on figuring out what’s new and more on making the adjustments necessary to stay compliant.
Compliance Management Platform
A compliance management platform is a one-stop solution for handling everything related to compliance, not just regulatory changes. Whether you want to track new regulations, manage risk assessments, or store compliance documents, you handle all these tasks in one place.
Automated Reporting Solution
When you need to provide reports to regulators, your internal team, or investors, you don’t have to create them manually. An automated reporting solution can quickly and accurately generate reports using the information already in your system. As a result, it saves time and reduces errors.
Artificial Intelligence (AI) and Machine Learning (ML)
AI and ML technologies are becoming more popular in governance, risk, and compliance (GRC). If you’re wondering how to use AI in GRC, typical applications include:
- Generating policies in a flash
- Translating legal documents
- Pulling out insights from regulatory content
Impact of Regulatory Changes on Businesses
Whether your organization is small or large, keeping up with regulatory changes is a must. What does that actually mean for your business, though?
Financial Implications
Meeting new regulatory requirements often means spending money, whether on new equipment, updating processes, or training staff. These costs can be devastatingly high for smaller businesses if the changes are unexpected.
Besides upfront costs, keeping up with regulatory changes could mean investing in new technologies and hiring experts to maintain compliance. This translates to ongoing expenses.
Operational Adjustments
Depending on the impact of a regulatory change, you might need to adjust your daily operations. For example, if a regulation update affects how a manufacturer makes a product, the company might pause production to update its manufacturing process or equipment. That downtime can lead to lost sales.
Risk Management Considerations
As regulations change, so do the risks businesses face.
If updates to an environmental regulation require stricter waste management protocols, you might need to invest in new equipment, retrain staff, or even halt operations temporarily to implement the changes. This creates both financial and operational risks — your costs go up, and your daily workflow could be disrupted. If your business doesn’t adapt quickly, you risk legal penalties.
Reputational Effects
Expensive fines, lawsuits, and settlement fees are not the only consequences of noncompliance with regulatory changes. If you take too long to adapt to the latest rules or fail to follow them altogether, you put your organization’s reputation on the line. Noncompliance can break the trust between a company and its customers, business partners, or investors.
Building a Regulatory Change Management Framework
A regulatory change management framework is a structured approach you can use to handle updates to regulations and ensure you stay compliant. Key components of the framework include:
- Tracking regulatory changes: Monitor new laws or revisions in real time using an RCM software solution. Just make sure it integrates with your existing risk and compliance programs to bring all your compliance data and processes into one place.
- Assessing impact: How have regulatory changes affected different areas of your company, and what corrective measures can you take? Technology can automate your business assessments.
- Assigning roles and responsibilities: Determine who will handle what in the team that oversees regulatory change management.
- Ensuring continuous monitoring and improvement: Regularly review your compliance practices and adjust them accordingly as regulations change over time. Also, provide ongoing training for employees to keep them informed about regulatory updates.
Future Trends in Regulatory Change Management
Technological advancements are redefining how businesses approach regulatory change management.
For instance, the emergence of AI solutions like ChatGPT enables organizations to translate legal documents easily and create compliant policies quickly. AI and machine learning solutions can also sift through a large volume of regulatory data in seconds, flagging relevant changes faster than any human could. However, AI is not perfect, and businesses should never rule out human intervention when using it.
Additionally, anticipating amendments to industry rules is part of regulatory change management. Instead of relying on guesswork or gut feeling, predictive analytics tools make the process data-driven, dependable, and more accurate.
Predictive analytics solutions can identify hidden patterns in current and past regulatory data. They then use these insights to forecast, with remarkable precision, potential regulatory changes before they even happen. This gives businesses a huge advantage — if they know what’s coming, they can start preparing ahead of time.
Regulatory Change Management Made Simple
Is reducing regulatory non-compliance at the top of your mind?
A regulatory change management automation tool can help you achieve that efficiently and effectively. However, not all RCM software can do the trick. You need a robust tech solution that’s quick to implement and easy to use for everybody in your compliance management team.
Onspring is a regulatory change management tool with no-code automation. That means each team member, even those who are not tech savvy, can easily create compliance workflows and reports on their own. With the software, it’s possible to automate 100% of RCM.
The solution also enables you to manage all your compliance tasks and data in a single place. With everything under one roof, it’s easy to track regulatory changes, determine their impact on your organization, and comply with them all.
Don’t wait to take advantage of technology that complements your compliance program and helps you stay on top of regulatory changes. Schedule a demo today to see how Onspring makes it easy to meet regulatory requirements.
