In the 2020 State of Compliance survey, researchers collected data to define how the regulatory compliance landscape is shifting and identify emerging trends. The resulting report helps companies understand today’s compliance environment, and equips them with industry and revenue-specific insights they can use to make informed decisions and develop effective compliance programs. Download The State of Compliance 2020 report today for a comprehensive view of the landscape, how companies are responding to regulatory changes, trends in team and program structures, and the true costs of compliance.
Read the ReportThe Compliance
Landscape
Through survey responses, researchers mapped the evolving compliance landscape. While consistency in year-over-year responses remained, this year showed a wider array of regulations impacting businesses. In particular, enterprise-level companies signalled they were in-scope of emerging legislation such as the European Union (EU) Waste Framework Directive and EU Conflict Minerals Regulation in greater numbers than smaller companies. This could indicate suppliers to these companies are unaware of quickly upcoming regulatory requirements.
66%
REACH Regulation
67%
RoHS Directive
65%
Proposition 65
72%
REACH Regulation
72%
RoHS Directive
63%
Proposition 65
71%
REACH Regulation
70%
RoHS Directive
63%
Conflict Minerals
Digital Transformation
The adoption of technology to meet compliance requirements has been uneven across companies, with varying buy-in from companies of different sizes and in different industries. A large majority (85 percent) of companies reported a moderate effort toward general digital transformation, however, technology was slightly less likely to be used in compliance programs compared to other areas. Overall, the use of manual emails to collect supply chain data dropped by 12 percentage points as more companies adopt digital solutions.
Companies That Eliminated
Manual Email Data Collection
25%
in 2020
13%
in 2019
Digital Transformation
The adoption of technology to meet compliance requirements has been uneven across companies, with varying buy-in from companies of different sizes and in different industries. A large majority (85 percent) of companies reported a moderate effort toward general digital transformation, however, technology was slightly less likely to be used in compliance programs compared to other areas. Overall, the use of manual emails to collect supply chain data dropped by 12 percentage points as more companies adopt digital solutions.
Increasing Demand
The vast majority of companies indicated they not only spend more time on compliance efforts than in past years, but they expect that trend to continue. Over 88 percent of companies predicted they will need to dedicate more time to compliance over the next three years. This demonstrates companies will require a steady increase in resources to manage compliance programs.
25%
Expect time spent on compliance to increase by more than ¼ over the next three years.
32%
Companies spend over 25% more time on compliance now than they did in 2017.
88%
Companies expect to spend more time on compliance this year than last.
Confidence Is Dropping
While forecasted demand increases remain consistent, companies are increasingly losing confidence in their ability to meet growing regulatory burdens. Larger companies signalled they are more likely to invest in digital solutions in order to meet increasing requirements.
Ranked confidence to meet increasing demands, out of 10
5.4
2020
6.1
2019
6.2
2018
Departmental
Impacts
The compliance process is rarely limited to one team within a company, with findings showing most companies have a minimum of five departments involved at some level. Not only does this indicate which areas of an organization would be most impacted by increased compliance demands, but the prevalence of quality assurance teams involved in compliance indicates it is now being considered a core metric.
Top Departments Involved
in Compliance 2020
Departmental
Impacts
The compliance process is rarely limited to one team within a company, with findings showing most companies have a minimum of five departments involved at some level. Not only does this indicate which areas of an organization would be most impacted by increased compliance demands, but the prevalence of quality assurance teams involved in compliance indicates it is now being considered a core metric.
Increase in Costs Forecasted
The average cost of compliance is significantly higher than the salary costs estimated by respondents. Costs also accrue in processes related to design, governance, compliance tolls, supplier engagement and data governance. Future cost increases can be calculated using the average cost of compliance and predicted increases in time spent on compliance. As the regulatory landscape continues to grow, companies with a greater regulatory burden will need to invest to meet their increasing demands.
MID-SIZED
$24564
LARGE
$81584
ENTERPRISE
$1360559
Increase in Costs Forecasted
The average cost of compliance is significantly higher than the salary costs estimated by respondents. Costs also accrue in processes related to design, governance, compliance tolls, supplier engagement and data governance. Future cost increases can be calculated using the average cost of compliance and predicted increases in time spent on compliance. As the regulatory landscape continues to grow, companies with a greater regulatory burden will need to invest to meet their increasing demands.
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Insights in the
Full Report
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With Contributions from Partners
Download last year's State of Compliance report
to read the 2019 insights.