An effective compliance management system helps organizations manage regulatory complexities while shielding themselves from costly legal and reputational risks.
A compliance system provides an organized process for tracking regulations, managing policies and maintaining documentation. It enables more streamlined workflows while offering valuable insights into your organization’s compliance posture.
In this article, you’ll learn the critical elements of a compliance management system. You’ll also learn five steps to help you set it up and discover leading platforms to keep your organization ahead of regulatory requirements.
“Compliance management” definition
Compliance management is the ongoing work of following laws, regulations and industry standards.
Compliance management involves identifying applicable requirements, assessing current practices, implementing necessary compliance controls and monitoring or reporting compliance activities regularly.
What is a CMS and why is it important?
A Compliance Management System (CMS) helps organizations follow laws, regulations and internal policies while reducing risk and increasing efficiency.
Note: Several other business and technology terms use the acronym CMS, such as Content Management System.
For example, a financial services firm might implement a CMS that includes automated monitoring of transactions for potential money laundering. The system would flag suspicious transactions, prompt investigations and generate reports for regulatory bodies.
A CMS helps you:
Identify and address regulatory requirements
Reduce the risk of costly violations
Streamline business processes to improve efficiency and compliance
Build a culture of ethics and accountability
Enhance stakeholder trust
A recent survey revealed that 70% of corporate risk and compliance professionals have noticed a shift from check-the-box compliance to more strategic approaches over the past few years. These results indicate a change from meeting basic requirements to making compliance a part of ethical business practices.
In addition, 83% of risk and compliance professionals say keeping their organization compliant is essential for decision-making. Such considerations are now part of strategic planning and day-to-day operations.
These trends also highlight the need to embed compliance into long-term strategies. A quality CMS allows you to achieve these goals.
Key elements of compliance management
Compliance management is critical to ensure organizations meet regulatory requirements while maintaining ethical standards.
Here are the key components of an effective compliance management system.
Policy management
Policies are rules and guidelines that outline how an organization operates within legal and ethical boundaries. Efficient policy management ensures organizations stay compliant without confusion or error.
Clear, well-communicated policies provide a roadmap for decision-making and help create a consistent approach to regulatory requirements across the organization.
Effective policy management involves:
Reviewing and updating policies regularly
Ensuring policies are accessible to all employees
Aligning policies with current laws and industry standards
Communicating changes promptly
Tracking policy acknowledgments
Well-structured policies foster a culture that reduces compliance risks while ensuring consistent legal and ethical standards.
Risk assessment and mitigation
Think of risk assessment as your compliance early warning system. It spots potential issues before they become full-scale problems. Once you’ve identified these risks, develop strategies to tackle them.
Proactive risk assessment helps your team address compliance issues and escalate as needed. Focus your efforts while saving time and resources in the long run.
Here’s what the process looks like in practice:
Figuring out what rules you need to follow
Weighing how likely and damaging risks might be
Coming up with plans to manage these risks
Putting safeguards in place
Keeping an eye on how well your risk management is working
Continual risk assessment helps organizations avoid compliance issues while driving efficiency and resilience in an evolving regulatory landscape.
Monitoring and auditing
Regular check-ups and compliance monitoring help you spot issues early – enabling you to double-check your processes to ensure everything runs as it should.
Here’s what auditing involves:
Setting up systems to track compliance indicators
Reviewing your processes and controls regularly
Conducting both internal and external compliance audits
Analyzing trends and patterns in your data
Using findings to improve your compliance management program
Keeping tabs on your compliance efforts builds a more vital and resilient organization that can adapt to changing regulations.
Training and awareness
Training and awareness get everyone in your organization on the same page. These initiatives also create an environment where employees uphold regulatory standards.
In 2023, compliance professionals identified employee training (42%) and aligning policies with regulations (38%) as top challenges.
Investing in ongoing training helps you build an agile workforce that adapts quickly to changing regulations.
Incident management
Incident management involves a clear plan for compliance slip-ups or near-misses because problems can occur even when one has the best intentions. Mishandling these issues can impact compliance efforts and reputation.
Most companies take proactive steps, preparing their teams to address potential errors and minimize their impact. Atlassian’s research shows 97% of organizations have procedures for managing incidents and 78% use wargames or incident management training.
Refine your protocols continuously to prevent mistakes and anticipate future compliance challenges.
6 steps to implement a compliance management process
Implementing a compliance process involves several key steps that ensure your organization follows the law.
1. Identify relevant laws and regulations
The first step in compliance is knowing the rules that govern your business. Pinpoint the specific regulations your company must follow to map your compliance landscape. Familiarity with these laws is crucial to avoid legal risks and protect your reputation.
Every industry has a regulatory maze. For example:
| Healthcare | Must comply with HIPAA (Health Insurance Portability and Accountability Act) in the US |
| Finance | Needs to adhere to regulations like the Basel Accords |
| Technology | May require compliance with data protection laws such as GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act) |
Start by looking at your business through a regulatory lens depending on what industry you’re in and what services you offer:
Conduct a regulatory landscape analysis to spot relevant local, state and federal laws
Review industry standards that are best practices, even if they’re not legally binding
Use established frameworks like COSO or ISO 31000 to guide your process
Keep international regulations in mind if you operate globally
Charting your compliance landscape builds a strong foundation that reduces risks and aligns your business with legal frameworks.
2. Conduct risk analysis
Risk analysis reveals vulnerabilities in your operations. You need a strategic, proactive approach that handles compliance issues head-on.
Build targeted defenses and avoid costly violations by knowing where you’re most vulnerable. Gather experts from legal, finance, operations and compliance departments. Their diverse perspectives will help you spot risks you might otherwise miss.
Once your experts are on board:
Review internal documents like handbooks and audit reports
Identify external regulations that apply to your sector
Analyze each risk by likelihood and impact
Rank risks to figure out which ones need your attention first
Revisit your analysis regularly to stay ahead of new threats and changing regulations.
3. Develop compliance policies
Well-crafted policies are your first line of defense against compliance issues. They turn abstract regulations into concrete, actionable steps for your team.
Start by defining each policy’s specific goals, such as protecting customer data, preventing fraud or encouraging ethical behavior.
Next, involve your senior management, legal advisors and department heads. Their input ensures your policies are feasible and aligned with legal standards and company values.
When drafting your policies:
Include a transparent header and introduction with background information
State the purpose and objectives upfront
Define key terms to avoid confusion
Outline specific rules and step-by-step procedures
Discuss related policies and legal citations
Once you write a draft, have your legal team or advisor review it, gather feedback from stakeholders and seek approval from top management (like the board of directors). Thorough policies ensure clarity and reduce non-compliance by turning legal requirements into everyday practices for your team.
4. Introduce employee training and culture-building
Even the best policies are useless if your team doesn’t understand or support them. Training and culture-building turn compliance into a shared value.
Make compliance training programs engaging and relevant by:
Using real-world scenarios and interactive sessions rather than dry lectures
Tailoring training to different roles – sales training will look different from training relevant to your IT team
Making it ongoing, not a one-off event
Using a mix of formats – e-learning, workshops and quick refresher videos
The goal is to make compliance automatic and part of everyday decision-making.
5. Build a culture of compliance
Training should inform and instill lasting behavioral shifts, making compliance an integral part of daily work routines. Build a culture of compliance by:
Leading from the top with executives that champion compliance efforts
Recognizing and rewarding compliance-savvy behavior
Encouraging open discussions about ethical dilemmas
Integrating compliance into performance reviews
Creating a safe environment to report concerns
Note: Hold regular town halls where employees can voice concerns. Involve leadership in championing compliance goals publicly.
Invest in training and culture to build a workforce that does the right thing, even when no one’s watching.
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6. Review and update regularly
Your business’s regulatory landscape is shifting constantly. What worked last year might not today. Regular reviews ensure you’re not caught off guard by new regulations or emerging risks.
Set up a regular review schedule that pivots as needed. Conduct comprehensive annual reviews of your compliance program to assess its effectiveness and identify areas for improvement. Implement quarterly check-ins to address any emerging issues promptly. Stay vigilant for regulatory changes that require immediate attention and out-of-cycle reviews.
During those reviews:
Reassess your risk landscape – have new threats that could impact your customer experience emerged?
Check if your policies still align with current regulations and best practices
Analyze any incidents or near-misses for lessons learned
Gather feedback from employees on what’s working and what’s not
Look at industry trends and peer practices for fresh ideas
Update your training materials to reflect any changes
Create a compliance review team responsible for quarterly external and internal audits. Ensure you have automated alerts for regulatory changes relevant to your industry. Document your review process and any changes made to create an audit trail and track progress over time.
Ongoing reviews ensure your compliance program stays aligned with regulations while helping your organization adapt to evolving risks.
Challenges in compliance management
Compliance management is always changing. It’s full of legal details and regulations that organizations must handle. The number of rules, how often they change and the risk of penalties can make compliance challenging for any business.
In this section, we’ll look at compliance managers’ common challenges and share practical ways to make the process easier for businesses.
Navigating resource constraints
Many organizations need help allocating sufficient funds and staff while maintaining robust compliance programs. Resource constraints often lead to compliance gaps, increasing the risk of violations and fines.
This challenge intensifies as regulatory requirements grow more complex. To navigate these constraints:
Prioritize high-risk areas. Conduct a thorough risk assessment to identify critical compliance areas. Focus your resources on these priorities to maximize impact.
Cross-train employees. Train employees from various departments to develop a cross-functional approach to compliance. This process spreads the workload and creates a culture of shared responsibility for compliance across the organization.
Outsource strategically. Partner with external compliance experts for specialized tasks or during peak periods. Strategic outsourcing provides access to expertise without the long-term cost of full-time hires.
Implement a scalable framework. Design your compliance program with scalability in mind. A scalable framework allows adaptation to changing regulations and business growth without overhauling your system.
Intelligent solutions to resource constraints can lead to a robust compliance program that meets regulatory requirements.
Balancing compliance with business goals
Many organizations find it challenging to maintain regulatory compliance while pursuing business objectives. Viewing compliance as a catalyst for sustainable growth instead of a roadblock allows businesses to thrive while avoiding costly penalties.
Develop key performance indicators (KPIs) that track compliance alongside financial goals and make it a pillar of your business success metrics.
Educate leadership on how strong compliance practices can enhance reputation, build customer trust and open new market opportunities. Companies with data protection measures often gain a competitive edge in privacy-conscious markets.
Embed compliance considerations into decision-making at every stage of the life cycle. Involve compliance teams early in new product development to ensure it meets regulatory standards.
For example, a financial institution can track how improved Know Your Customer (KYC) processes meet regulatory requirements, reduce fraud losses and enhance customer onboarding efficiency.
Note: Effective compliance management isn’t about saying “no” to business opportunities. It’s about finding compliant ways to say “yes”.
Managing global compliance requirements
Global operations and remote team management bring a complex web of regulations that vary by country and region. Navigating this landscape requires a strategic approach to compliance management.
Start by creating a centralized framework adaptable to local requirements. This system ensures compliance efforts remain consistent across regions while reducing the risk of fragmented practices.
Establish a global compliance team that ensures alignment across jurisdictions while following local laws. Partner with experts in target markets to gain insights into regulatory nuances that global teams might miss. Through this process, you’ll avoid costly errors.
Combining a centralized framework with sector expertise allows you to create a compliance strategy that’s globally consistent and locally responsive.
5 best compliance management software solutions
Let’s look at some of the best compliance management tools available. Each solution fits different use cases. Identify your organization’s needs to choose the best compliance management solutions for you.
1. Pipedrive
Pipedrive is a sales CRM (customer relationship management) software designed to help businesses manage their pipeline and close deals. It offers robust compliance features ideal for sales-driven organizations focused on cybersecurity and privacy.
Pipedrive’s Trust Center offers transparency about security practices and compliance certifications. The platform uses secure hosting through Rackspace and AWS to protect data at rest and in transit.
Key features
AES-256 encryption and full SOC 2 compliance
GDPR, SOC 3, EU-US Data Privacy Framework and ISO/IEC 27001:2013 adherence
Two-factor authentication and single sign-on capabilities
IP and time-based access controls
Real-time security alerts and notifications
Automated data security rules and customizable alerts
Who should use Pipedrive?
Pipedrive is ideal for sales-focused organizations that require a secure CRM solution, especially those operating in regulated industries or handling sensitive sales data.
2. Cflow
Cflow is a no-code workflow automation software that helps businesses work more smoothly and improve efficiency. It enables organizations to manage compliance workflows without programming expertise while promoting regulatory adherence.
Key features
Centralized document management that’s easy to access
Automated compliance tracking and deadline management
Customizable workflow templates for specific compliance needs
Robust security features like role-based access control
Third-party risk management capabilities
Who should use Cflow?
Cflow is ideal for organizations seeking a flexible, user-friendly compliance management solution that can adapt quickly to changing regulatory landscapes and integrate seamlessly with existing business systems.
3. HIPAA One
HIPAA One is specialized compliance management software designed to meet HIPAA requirements for healthcare organizations. It follows NIST (National Institute of Standards and Technology) methodologies to ensure comprehensive coverage of security and privacy regulations.
HIPAA One lets you customize the software to fit your organization’s needs, including security settings, reporting and integrations.
Key features
Calculated risk assessment and prioritization scores
Customizable remediation tracking with action history
Automated alerts for tasks and regulation updates
Real-time and final reporting capabilities
User-friendly interface with simplified regulatory citations
Who should use HIPAA One?
HIPAA One is ideal for healthcare providers, insurers and business associates seeking a comprehensive solution to navigate the complexities of HIPAA compliance efficiently and effectively.
4. Connecteam
Connecteam is a team management platform that helps businesses communicate, schedule and manage their workforce. It provides tools to manage policies, procedures and training in one system.
Key features
Digital knowledge base for up-to-date document management
Compliance training app with progress tracking and result recording
Cloud-based employee documentation with expiration alerts
Secure in-app messaging with scheduled delivery and read receipts
Time clock for accurate timekeeping and labor law compliance
Anonymous surveys for reporting non-compliant behavior
Who should use Connecteam?
Connecteam is ideal for businesses seeking to manage compliance across multiple departments efficiently, particularly those with remote or non-desk workers who need a mobile-friendly solution.
5. PowerDMS
PowerDMS is a document management system that helps businesses store, manage and share important documents.
PowerDMS provides a secure cloud system for managing policies and procedures. It offers tools for developing, reviewing, approving, distributing and tracking policies with version control and audit trails.
Key features
Mobile app for convenient access and management
Permission to control who has access
Workflow tools for routing and approval
Policy review automation with reminders
Policy-to-standards mapping for 40+ accrediting bodies
Who should use PowerDMS?
PowerDMS is ideal for organizations seeking a robust policy management system, particularly those in regulated industries requiring frequent policy updates and strict compliance tracking.
Compliance management FAQs
Final thoughts
A robust compliance management system is essential to avoid pitfalls while ensuring long-term resilience and trust. Understanding how to navigate these complexities helps you build a system that safeguards your organization against legal and financial risks.
Check out Pipedrive to see how its CRM tools can streamline compliance tasks and help your organization stay ahead of regulatory requirements. Try Pipedrive free for 14 days.
