IS COMPLIANCE AUTOMATION RIGHT
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1 2014 IS COMPLIANCE AUTOMATION RIGHT FOR YOUR COMPANY? HOW TO TELL IN UNDER 10 MINUTES REACH RoHS PROP65 CPSIA CONFLICT MINERALS CUSTOM COMPLIANCE SOLUTIONS
2 TABLE OF CONTENTS Chapter 1: Is Compliance Right for Your Company? Chapter 2: Compliance Automation Costs Comparison Vs Full Time Equivalent Hire... 7 Chapter 3: The Business Case for Compliance Is Getting Easier To Make Chapter 4: What s Next? Chapter 5: About Assent Compliance Corporate Overview/Products
3 CHAPTER 1 IS COMPLIANCE RIGHT FOR YOUR COMPANY? 3
4 IS COMPLIANCE AUTOMATION RIGHT FOR YOUR COMPANY? When is it time to look for a compliance solution? The answer is fairly straight forward. Most companies at a certain size need an internal compliance team. This is usually done through the Quality department, EHS or the establishment of a dedicated Regulatory Compliance department. If you are reading this, you are most likely a member of that compliance team in whatever form it exists or an executive who is responsible for that division. At which point do you invest in compliance automation software/services? When the incremental cost of a new hire is higher than the cost of an automation solution which will provide more value and benefit than a single resource could. When current resources are becoming overwhelmed or overburdened because of the expanding regulatory landscape When the need arises for scalable data management, collection mechanisms and reporting functions When firms choose to partner with a company like Assent that provides a compliance automated platform and turnkey services they get the following: Compliance Software Platform for The Whole Team Supply Chain Data Collection Services Expert Regulatory Consulting Services on Demand With this 3 tier approach, Assent s compliance automation or Turnkey solution allows firms to do the following: 1. Leverage Huge Economies of Scale: Assent has an active database of over 125,000 compliance contacts including almost every major firm in North America and manufacturing hubs like Shenzhen. This allows data collection for EICC forms, RoHS/REACH compliance declarations and Full Material Disclosures to be expedited through pre-existing channels. This applies to using current open source data Assent has on 4
5 hand or using the master contact database to quickly find the person responsible for providing the required information. 2. Leverage Expert Staff without the Full Time Cost: Often times regulatory expertise is not needed in a full time capacity. Companies in many cases do not have to hire a full time resource internally but can leverage expertise from Assent on demand when needed and save the costs. 3. Leverage Data Collection: When expanding the compliance team there are 2 options: Hire a high level compliance manager or hire lower level resources for data collection. It is not logical to have expert level staff doing data mining and collection. With the Assent turnkey program you receive both expert staff on demand and data collection as a part of turnkey service as well as a platform to manage and track the entire process. 4. Best in Class Software: The Assent platform is in use by 100 s of firms ranging from SMB to Fortune 50. With features including: Supply chain data transfer portal Deep reporting and analytics campaign manager Compliance task manager The Assent platform makes life for compliance teams simple. WHERE COMPLIANCE AUTOMATION FITS WITH FIRMS OF DIFFERENT SIZES: MANUFACTURER 50MM 100MM IN REVENUE: At this size your firm is now facing multiple regulatory hurdles. You most likely have a key person in the quality division who is responsible for regulatory compliance. This key person is overwhelmed with compliance requests from customers, collecting &organizing data, attempting to make sense of the regulatory landscape and the associated responsibilities for the firm. They are probably also coordinating tests with NRTL s and essentially a one person show. How Compliance Automation Fits: Compliance automation at this size is extremely important. As key accounts will demand your firm adhere to strict regulatory guidelines or face losing purchase orders your internal compliance staff will need support. This can come in the form of consulting but the need for a system to be able to house data, track and report is extremely important. Why? 5
6 If key personnel depart it can leave the firm in a very difficult position. Having a centralized management system to store data, extract reports and act as a compliance hub is critical with a small compliance team. Compliance Automation will provide your team support and alleviate data collection, review and processing tasks from every day work. PUBLICALLY TRADED COMPANY OR GOING PUBLIC: If your company is public or going public, having the peace of mind that you have a trusted compliance partner to assist with any challenges from a data, reporting, regulatory or supply chain perspective is as essential as having first class accounting and legal firms on retainer. The regulatory landscape is expanding so rapidly and is more than ever tied to brand image, that the cost of failure is enormous. Having the right platform that can house data from National Recognized Test Labs (like CSA, Intertek, SGS and UL), connect to ERP & PLM systems, and grow with your firm, exponentially minimizes your compliance risks as well as save costs. In a recent study conducted by NAEM all public company execs felt it was important to implement a compliance solution in the coming 2 years. If your firm is public or considering going public there is a strong case for compliance automation. 6
7 CHAPTER 2 COMPLIANCE AUTOMATION COSTS COMPAIRISON VS FULL TIME EQUIVALENT HIRE 7
8 CAN YOU AFFORD A COMPLIANCE SOLUTION? CAN YOU AFFORD NOT TO? At Assent we work with firms of all sizes. At a minimum, if you are looking to add an extra FTE in the compliance department you can likely afford a compliance automation solution. See how: DOES ANOTHER INTERNAL HIRE MAKE SENSE? The decision to create an internal compliance position should undergo a cost benefit analysis before proceeding. There are both advantages and disadvantages to hiring internally when, in many cases it is possible to automate processes and work with third party firms providing superior service at a fraction of the costs. Cost Benefit Analysis According to PayScale.com, a compliance officer with an engineering or environmental science degree earns on average $60,000 $90,000/annum salary excluding overhead. A typical employee in said position performs the following: (Sourced from monster.com).»» Task: Develop and implement communication strategies to share product environmental compliance information with employees, customers and vendors. How Software Automation Can Help: Assent provides full communication through a managed and automated software suite that allows for fast communication to your entire supply chain and any internal stakeholders. Assent can also develop communications strategies for any customers, vendors and staff.»» Task: Develop and implement strategies to ensure company compliance with product environmental standards and directives. How Assent Can Help: The engagement of Assent's software suite and services ensures that a costefficient and highly effective compliance strategy is in place. 8
9 »» Task: Develop sustainable processes for managing compliance activities and documentation. How Assent Can Help: Assent software suite manages all compliance documentation in an automated easy to use system. The most sustainable system is one that will never call in sick.»» Task: Ensure compliance with regulatory agencies and compliance regulations, including RoHS, REACH, IPC 1752 and Conflict Minerals. How Assent Can Help: All of these regulations and more are covered in Assent's out of the box solution for Global Product Regulatory Tracking (GPRT). These Compliance Programs can all be supported via Assent's Turnkey services.»» Task: Serve as subject matter expert on regulatory matters to ensure key safety and regulatory requirements are understood by product teams. How Assent Can Help: Your organization is provided a direct Assent resource to field regulatory questions and assist product teams as part of Assent's Turnkey solution. Assent acts as an on-call compliance officer. 9
10 COST OF ASSENT VS FULL TIME STAFF FULL TIME STAFF Avg. Base Salary: $70, 000 Overhead: ~50% Total/Annum: Approximately $ 105, 000 ASSENT COMPLIANCE WITH EXPERT SUPPORT: Assent Software Suite: (Reach/RoHS/Conflict Minerals) Includes: Set up, communication portal, reporting tool, Turnkey Support and full software package Set up: $10,000 - $30,000 (based on ERP/PLM integrations. BOM import Etc.) Monthly Subscription: $3,000* *Includes Turnkey Support for Data Collection, Validation from Supply Chain for up to 750 suppliers + Reporting. Total Cost of Ownership 3yrs Assent Software + Support Services: $118,000 Total Cost of Employment 3yrs FTE + Overhead: $315,000 Cost Savings with Assent: $197,000 Note: Costs can range based on setup complexity, required customizations, integration, number of suppliers, business units and scope of the project. 10
11 CHAPTER 3 THE BUSINESS CASE FOR COMPLIANCE IS GETTING EASIER TO MAKE 11
12 HOW THE BUSINESS CASE FOR COMPLIANCE & SUSTAINABILITY IS GETTING EASIER TO MAKE From the NAEM White Paper: Planning For a Sustainable Future in Years to Come The business case for sustainability is getting easier to make compared with the case studies NAEM members shared even five years ago. Among leadership companies, the concept is widely understood both in theory, as well as in operational terms. These advanced efforts have rippled throughout the entire business ecosystem, spurring new attention to sustainability at all levels of the supply chain. More widespread understanding of what it means that employees are coming to work with a better understanding of the topic, which makes it an easier sell for those seeking buy-in for their projects. This alignment includes those at the leadership levels as well, as sustainability has gone from an abstract external conversation to one that relates to what companies are doing internally. As one EHS leader with sophisticated sustainability programs told us: After a few years of watching and listening and trying to understand what was being talked about with regards to sustainability, our team and myself and many of the professionals in our function said, Well that s what I do. Or that s mostly what I do. Indeed, according to NAEM s 2012 report on EHS and Sustainability Staffing and Structure, the top programs that respondents identified as sustainability fall within the responsibilities of the EHS function: carbon footprinting, setting sustainability goals, energy and carbon management, sustainability strategy, waste recycling and water efficiency. 12
13 REGULATORY REQUIREMENTS Regardless of age or size, all of the companies we spoke with have a strong focus on meeting environment, health and safety, and increasingly, sustainability regulations. As product compliance, green chemistry, storm water and cap-and-trade regulations come into effect, many of the programs that companies are voluntarily undertaking today will be written into the formal regulatory requirements. The risks of non-compliance are easy to quantify, as they are associated with fines, bad publicity and even losing preferred-supplier status. Compliance also serves as the foundation upon which most sustainability programs are built, as one respondent described: We believe as a fundamental basis of being a sustainable organization, we need to be compliant with environmental regulations. I think we re going to see external forces are going to drive the conversations. We won t be able to stay complacent for very long. New events will drive the conversation further. Joseph Fiksel Center for Resilience at The Ohio State University 2014 NAEM All rights reserved DEMONSTRATED COST SAVINGS Because many sustainability initiatives reduce the use of materials and improve efficiency, the business benefits are often inherent. These successful projects are then available as useful examples for future investments. Still, the business case matters for each new project, since values-based statements have little power to open the purse strings. We don t use terms like it s the right thing to do, the respondent said. We try to certainly do the right thing, but we re also mindful of the business impact. We re not doing this because we re a charity. MAINTAINING BUSINESS RELATIONSHIPS Every customer is a supplier and every supplier a customer, which means that the growth of customer inquiries have affected everyone. As we ll explore in more detail in the section on supply chain, the emphasis on supply chain transparency is changing business relationships. Customers today are evaluating their suppliers on their sustainability performance in addition to their compliance, cost 13
14 and continuity. Although the increased interest has not yet revolutionized procurement standards, suppliers expect sustainability to become a requirement for business in the future. INVESTOR INTEREST Investors interest in sustainability is another driver for maintaining pace with sustainability programs and reporting. Although increased access to capital has not always followed the flood of inquiries from socially responsible investment research firms, according to NAEM s 2010 Green Metrics that Matter research, it s widely accepted that reporting is here to stay. And when environmental issues are a concern for the investors, they become a concern for the company, respondents told us: Investors recognize the sustainable efforts. Keeping investors and shareholders is important. STRENGTHENING BRAND VALUE Brand value is among the more intangible yet important benefits of investing in sustainability programs, respondents said. Responding to investor inquiries and customer requests all ladder up to maintaining brand value. Among consumerfacing companies, where effective storytelling is an important part of the company s success, marketing and communications professionals continue to serve as the public face of sustainability. Among business-to-business (B2B) companies, where the marketing efforts may be more focused on functional benefits, sustainability is also starting to take hold. I m trying to make them understand we can increase the top line and revenue, one sustainability leader told us. Marketing isn t talking yet, but sales is starting to talk to me [because] when they go out, people are talking about sustainable products and services. People in the B-to-B world and the B-to-C world are asking us about our sustainability attributes and what we report. They are literally having companies say we want to do business with you but we need you to provide the sustainability reporting. Some EHS and sustainability managers are also training their marketing teams in the Federal Trade Commission s guidelines for green product claims, to facilitate marketing products based on their environmental attributes. I think other business are doing this already, but I think the whole environmental marketing is [in our industry] becoming a heavier pull to start doing that, one respondent said. 14
15 CHAPTER 4 WHAT'S NEXT? 15
16 WHAT'S NEXT? If you ve determined that compliance automation might be a fit with your company what are the next steps to take? You should look at assembling an RFP, RFI, or at a broad level start surveying some compliance vendors. WE CAN HELP: Considering sourcing a compliance vendor for software or services? Then this is a must read. At Assent we ve been through our share of RFP s, RFI s worked with third party consultants through the vendor sourcing maze and generally have lots of knowledge in the compliance vendor space (mostly because we feel we re the best one). We ve assembled this ebook based on industry best practices, client feedback, in-depth research, and decades of compliance experience. CHAPTERS INCLUDE: Introduction: The Innovators Dilemma and Your Compliance Vendor Assent Compliance Corporate Overview Chapter 1: Planning For Expansion Getting a solution that scales Chapter 2: Vendor Sourcing Best Practices Lessons From Conflict Minerals Chapter 3: The Pitfalls of Supplier Paid Models Chapter 4: Compliance and Big Data Chapter 5: Compliance and Professional Services Chapter 6: A Business Case For Compliance Chapter 7: A Competitive Vendor Review DOWNLOAD HERE compliance-software-vendor-sourcing-guide/ 16
17 CHAPTER 5 ABOUT ASSENT COMPLIANCE 17
18 WHO IS ASSENT? Assent delivers SaaS Environmental Compliance Services to companies that must comply with local, national, + global environmental regulations. Our software division is fully supported by a team of highly experienced industry consultants providing our clients with turnkey compliance solutions. Assent Compliance is rated among the top environmental compliance solutions in the world. Not to mention it s one of the only global solution providers to offer a full service solution from end to end. We re here to help our clients comply with environmental regulations in the most efficient + cost effective manner possible. This is achieved through SaaS automation of processes + working with clients to build efficient internal compliance programs that meet global compliance requirements. OUR MISSION ASSENT COMPLIANCE 2013 E-BOOK 18
19 HOW THE ASSENT COMPLIANCE MANAGEMENT SYSTEM WORKS Pulls Bill of Material (BOM) into a centralized compliance data base or operates as a stand-alone system. Integrates with Major ERP/PLM Systems Communicates with Supply Chain in bidirectional fashion to procure environmental information from suppliers Modules to Comply with All Major Environmental Regulations Build IPC 1752-A FORMS. Import/Export via XML Built-in CRM for compliance tasks, due diligence reporting and audit trails Homogenize proprietary supplier DOC formats in xml Allows internal Staff to Make Engineering Override assessments Acts as a repository for any compliance related material 19
20 SERVICES WE OFFER Environmental Compliance Software for Conflict Minerals, REACH, RoHS etc. Compliance Assessment Services Internal Standard Operating Procedure Development Compliance Outsourcing Services IT System Integration Compliance Plan Development OUR CLIENTS Assent serves clients ranging from Small Business to Fortune 500. In global supply chains companies of all sizes must comply with environmental regulations. Regardless of size Assent has products and services to help any sized company meet their environmental compliance obligations. 20
21 OUR GLOBAL OFFICES CANADA (HEADQUARTERS) ASSENT COMPLIANCE 56 Sparks Street Suite 510 Toll Free: Ottawa ON K1P 5A9 Fax: Canada info@assentcompliance.com LONDON, UK MUNICH, GERMANY OTTAWA, ONTARIO CANADA (HQ) TAIPEI, TAIWAN NEW YORK, NEW YORK BANGALORE, INDIA KENYA (CONFLICT MINERALS) CANADA ASSENT COMPLIANCE The World Exchange Plaza O Connor St. Ottawa ON K1P 1A4 Toll Free: Fax: info@assentcompliance.com UNITED KINGDOM ASSENT COMPLIANCE Longcroft House 2-8 Victoria Avenue Bishopsgate London UK EC2M 4NS Phone: info@assentcompliance.com UNITED STATES ASSENT COMPLIANCE 244 Fifth Avenue Suite 1717 New York NY United States of America Toll Free: Fax: info@assentcompliance.com 21
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