Modernizing compliance: Moving from value protection to value creation

Transcription

1 Modernizing compliance: Moving from value protection to value creation John Conrad, Principal Deloitte Risk and Financial Advisory Deloitte & Touche LLP Clarissa Crain, Senior Manager Deloitte Risk and Financial Advisory Deloitte & Touche LLP

2 Effective compliance management will increasingly be a source of competitive advantage, and Compliance Officers will have to demonstrate the value their function contributes to the organization and the effectiveness of the organization s compliance approach to external stakeholders. The current compliance landscape of regulatory pressures and internal challenges often leads to poor decision-making, integration, and execution. The future compliance landscape depends on modernizing compliance through the use of technology and focus on efficiency and value creation to transform how Compliance is viewed. Copyright 2017 Deloitte Development LLC. All rights reserved. 2

3 Industry trends Compliance is an enabling component to any regulated industry. In the pharmaceutical industry, compliance is a cornerstone of both product development and commercialization. Compliance gives the business a framework in which commercial aims and patient access can be appropriately maximized, thus many manufacturers are no longer satisfied merely by adhering to the rules set forth by compliance. Instead, the values and principles of these standards are adopted as germane to the business. Sustained Competitive Advantage Get the applicable information To the applicable person To confirm the right decision Maintains compliance standards and enables the business Compliance programs and principles should effectively consider and be flexible to: Product portfolio Changing business considerations Market influences and reconfiguration Regulatory enforcement and remediation trends Compliance provides the business with a framework in which business goals can be appropriately maximized Copyright 2017 Deloitte Development LLC. All rights reserved. 3

4 Modernizing compliance: A valued business partner Compliance provides the business a framework in which company objectives can be appropriately maximized. Compliance Modernization The traditional Compliance function: Rules-based guidance Monitoring to identify and remediate deviations from standards Modern Compliance functions focus on being Predictive & risk intelligent Enabling the business as a partner Operational excellence Driving value (ROI) Leading class Compliance organizations are: Strategists Communicators Risk Managers Stewards Provide compliance leadership for the business and the organization Promote a culture of compliance and integrity throughout the organization, and communicate this vision to all relevant stakeholders Direct all aspects of the compliance risk management program, from assessment to implementation of mitigation plans Assume ownership and identify accountability for reputation and compliance risks, fortify controls, and build relationships and trust with stakeholders Copyright 2017 Deloitte Development LLC. All rights reserved. 4

5 Compliance function maturity continuum Compliance Maturity Continuum Basic compliance Robotics and use of technology Talent management Predictive analytics Return on investment (ROI) and value creation Foundation Analytics Better integration More strategic Value creation Modernization The degree to which an organization modernizes its compliance program varies based on a number of factors. Factors may include, but are not limited to: Organizational and Compliance Maturity Organizational Values / Common Values Regulatory Environment / Sanctions Industry or Company Risk Profile Tone at the Top Copyright 2017 Deloitte Development LLC. All rights reserved. 5

6 Compliance risk management framework The end-to-end Compliance Risk Management Framework and related operating model has evolved to meet enhanced expectations, and sets a standard way to help design, assess, implement, and continuously improve an organization s Compliance function to drive toward modernization Compliance Program enablers People Process Technology Analytics Copyright 2017 Deloitte Development LLC. All rights reserved. 6

7 Levers to enable transformation and modernization Automation and enhancements should be considered within a broader ecosystem of people, process, technology, and analytics People Technology Process Analytics Copyright 2017 Deloitte Development LLC. All rights reserved. 7

8 An intentional approach to compliance modernization Suggested steps to take in determining the path to modernization Determine the desired modernized state for the Compliance Risk Management Program Prioritize areas that need to be addressed based on the results of the assessment, level of risk, and expected change to the organization Develop and update the Compliance strategy; confirm it aligns to the company s overall strategy; determine appropriate measures of effectiveness Perform an assessment of the existing Compliance Program against the desired modernized state Develop and update the overall vision/ mission for compliance to align with desired modernized state Determine what levers (investments, initiatives, resources, tools, technology, etc.) are needed to achieve desired modernized state Copyright 2017 Deloitte Development LLC. All rights reserved. 8

9 Benefits of compliance modernization In considering the case to modernize, should your organization commit, the following outcomes may be achieved for the Compliance function Outcomes of modernization Transformative change: re-engineer core processes and automate the function to be more proactive and predictive; modern enterprises need top-of-the-house strategies and reliance models Flexibility: rapidly scale up or down depending on the nature of the compliance and/or business issue Increase to capacity: re-engineer traditional resource model and allocation methods and use deployment of technology, analytics, managed services, and offshore resources to achieve highest and best use of resources New competencies: compliance professionals are elevated to true business partners and advisors Potential cost reduction: cost reduction opportunities exist by creating efficiencies and seeking ways to be more effective with increased capacity across the organization through use of tools, technology and resource allocation Enterprise-wide view of risk and compliance: from predicting to sensing to acting and monitoring, the lines between these formerly separate realms are disappearing quickly Copyright 2017 Deloitte Development LLC. All rights reserved. 9

10 Thank You John Conrad Principal Deloitte Risk and Financial Advisory (443) Clarissa Crain Senior Manager Deloitte Risk and Financial Advisory (717) This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation. Copyright 2017 Deloitte Development LLC. All rights reserved. 10

11 As used in this document, Deloitte Risk and Financial Advisory means Deloitte & Touche LLP, which provides audit and risk advisory services; Deloitte Financial Advisory Services LLP, which provides forensic, dispute, and other consulting services; and its affiliate, Deloitte Transactions and Business Analytics LLP, which provides a wide range of advisory and analytics services. These entities are separate subsidiaries of Deloitte LLP. Please see for a detailed description of our legal structure. Certain services may not be available to attest clients under the rules and regulations of public accounting. Copyright 2017 Deloitte Development LLC. All rights reserved. 36 USC