top of page

BLOG POST

Knowledge To Help Elevate Your Compliance

Creating A Business Case to Improve Compliance

The following outline should help you build a persuasive business case for improving compliance to protect and ensure total value for your organization.


Creating A Business Case
Creating A Business Case

Remember to adapt it to your specific context and provide data-driven evidence to support your claims.


I. Executive Summary


  • Briefly state the problem of inadequate compliance.

  • Highlight the importance of total value (safety, security, sustainability, legal, quality, profit, trust).

  • Briefly summarize the proposed solution and its expected benefits.


II. Current State Assessment


  • Identify specific compliance areas with weaknesses.

  • Quantify the current cost of non-compliance (e.g., fines, reputational damage, lost productivity, inadequate safety, security, sustainability, quality, trust).

  • Describe the current compliance processes and limitations.


III. Opportunity: Total Value through Improved Compliance


  • Define "total value" for your organization (safety, security, etc.).

  • Explain how improved compliance will contribute to each aspect of total value.

  • Use data or examples to illustrate the positive impact.


IV. Proposed Solution: Improving Compliance Framework


  • Describe the proposed solution (e.g., improved management programs, compliance software, standard adoption, accountability frameworks, data monitoring, digital twin, golden pipeline, golden thread, etc.).

  • Explain how the solution addresses weaknesses identified in Section II.

  • Outline the implementation timeline and resource requirements.


V. Financial Analysis: Investment vs. Return


  • Estimate the initial cost of implementing the solution.

  • Project the long-term cost savings and revenue gains from improved compliance.

  • Utilize a cost-benefit analysis or ROI (Return on Investment) calculation to quantify the return.


VI. Risk Assessment and Mitigation


  • Identify potential risks associated with implementing the solution.

  • Develop mitigation strategies for each identified risk.


VII. Conclusion and Recommendations


  • Summarize the key points of the business case.

  • Reiterate the value proposition of improved compliance for total value creation.

  • Recommend approval of the proposed solution and next steps.


VIII. Appendix


  • Include detailed data, reports, or calculations supporting your claims.


Additional Considerations:


  • Tailor the outline to your specific industry, regulations, and compliance needs.

  • Highlight success stories of companies that improved compliance and total value.

  • Address potential concerns of stakeholders who may resist change.

  • Quantify the impact whenever possible to present a compelling case.


Tool Considerations:


The following tools help to identify value contributions, uncertainty and risk, and help with decision making with respect to options:




A Simplified Example


The details and tools used in this example will vary depending on your organization and the complexity of the compliance program. However, it demonstrates how to structure a business case that utilizes data analysis, uncertainty estimation, and a focus on total value creation to present a compelling argument for improved compliance.


 

Business Case: Improving Data Security Compliance for Total Value Creation


Executive Summary:


Our current data security practices expose us to potential data breaches, regulatory fines, and reputational damage. This business case proposes implementing a comprehensive data security compliance program. This program will enhance data security, reduce compliance risks, and contribute to achieving total value for our organization, encompassing aspects like security, trust, legal compliance, and potential cost savings.


Current State Assessment:


  • Recent internal audits identified vulnerabilities in data access controls and employee training on data security protocols.

  • We have experienced two minor data breaches in the past year, resulting in customer notification costs and reputational damage.

  • Upcoming industry regulations will impose stricter data security requirements.


The estimated cost of non-compliance includes:


  • Potential regulatory fines: $1 million (based on industry benchmarks)

  • Data breach notification and remediation costs: $500,000 per incident (historical average)

  • Reputational damage: Difficult to quantify, but can lead to customer churn and lost revenue.


Opportunity: Total Value through Improved Compliance


Total value in this context includes:


  • Security: Improved data security posture reduces the risk of breaches and protects sensitive customer data.

  • Trust: Strong data security practices build trust with customers, partners, and investors.

  • Legal Compliance: Meeting industry regulations avoids hefty fines and potential legal repercussions.

  • Cost Savings: Reduced risk of data breaches minimizes notification and remediation costs.


Proposed Solution: Data Security Compliance Program


The program includes:


  • Data Security Policy and Procedures: Develop a comprehensive policy outlining data handling protocols, access controls, and incident response procedures.

  • Employee Training: Implement mandatory data security training programs to educate employees on best practices. Includes training for leadership and management on governance and risk processes.

  • Technology Investments: Upgrade data security software and infrastructure to strengthen data encryption and access controls.

  • Compliance Management Software: Utilize software to automate compliance tasks, track progress, and identify potential vulnerabilities.


Financial Analysis: Investment vs. Return


Initial Investment:


  • Development and implementation of data security policy and procedures: $200,000

  • Employee training: $100,000

  • Technology upgrades: $500,000

  • Compliance management software: $100,000

  • Total Initial Investment: $900,000


Projected Returns:


  • Avoided regulatory fines: $500,000 (annualized)

  • Reduced data breach costs: $750,000 per year (based on risk mitigation estimates)

  • Estimated value in increased stakeholder trust: $1 million (annualized)


Return on Investment (ROI):


Using a simple ROI calculation, the projected payback period is less than one year. However, a more comprehensive analysis using Monte Carlo simulation will be conducted to account for uncertainties in cost-saving estimates.


Risk Assessment and Mitigation:


  • Risk: Difficulty in changing employee behavior regarding data security practices. Mitigation: Develop a communication and change management plan to emphasize the importance of data security and the benefits of the program.

  • Risk: Unexpected costs associated with technology upgrades. Mitigation: Conduct thorough vendor research and obtain multiple quotes before finalizing technology purchases.


Conclusion and Recommendations:


Investing in a comprehensive data security compliance program offers a significant return on investment. It enhances data security, strengthens customer trust, ensures compliance with regulations, and potentially reduces costs associated with data breaches. Based on the positive financial outlook and risk mitigation strategies, we strongly recommend approval of this program.


Appendix:


  • Detailed cost breakdown for program implementation.

  • Historical data on data breach incidents and associated costs.

  • Detailed benefits analysis including gains to total value.

  • Monte Carlo simulation results for ROI analysis with uncertainty ranges.


 

30 views0 comments

Related Posts

See All

Comments


Elevate Compliance Huddle

Mondays @ Noon on Zoom (weekly)

Elevate Compliance Huddle / Free Online Session

The Book

Learn more about our upcoming book coming soon.

bottom of page