Those operating in a regulated industry quickly learn that standard business practices don’t apply. The compliance requirements of healthcare, finance, education, professional services, and other regulated sectors fundamentally change the way work gets done, rather than simply adding to it. Everything that makes unregulated businesses efficient becomes a challenge when business-as-usual attempts to ignore regulatory obligations.
This is not just a matter of added steps in a process. Regulation changes operations from the ground up. It affects daily routines, technology decisions, and what roles various staff members have. Organizations attempting to operate like an unregulated business while also fulfilling compliance obligations have a far more difficult job than those who accept the need for an entirely different approach.
Documentation as an Operational Requirement
In a standard business, documentation is helpful for coordinating teams, preserving information, and supporting decision-making. It has many uses, but its completion can be avoided in many situations. Organizations have leeway in how much they ask staff to document business activities.
In regulated industries, documentation is mandatory. It serves specific purposes and in certain ways. Evidence must be kept for particular periods. Records must meet standards that outside organizations will check.
This turns documentation from a supportive activity to an essential operational requirement. In an unregulated environment, staff can complete a task and move on. In a regulated environment, they must create records as part of completing the work that meets regulatory standards and take time to do so. The time spent documenting work increases exponentially in regulated environments, and there is no avenue for avoiding this task.
Standardized Processes as the Only Valid Approach
Unregulated businesses can operate “in the style of.” Staff can learn how to perform tasks with the flexibility to modify their approach as needed. This allows for innovation and the possibility of producing better outcomes by improving processes in certain situations.
Regulated organizations must standardize all processes. They need these processes to be systematic so they demonstrate they are operating according to approved processes. There is no place for innovation and flexibility because regulators require seeing that work takes place according to procedures set out by institutions that govern the relevant industry.
Part of preparing to implement a new process in an unregulated environment is the planning work that happens beforehand. In a regulated environment, this planning still takes place but on an increased scale. Changes cannot be made informally and need appropriate documentation, approval, and possibly external assessment. What could have been simply tested in altered versions of processes in a unregulated setting takes time to modify properly in a regulated one.
Technology with Different Requirements
Standard organizations use off-the-shelf programs to run their organizations. They prioritize efficiency and user-friendliness in technology acquisition decisions.
In regulated environments, organizations need to consider compliance requirements when making technology decisions. This includes ensuring that systems provide reports that regulators require, logging actions taken in case audits take place, and packaging documentation so it can be preserved as required.
Compliance requirements might not support user experience. Systems that might seem easy to use fail to provide the necessary documentation and control that regulations demand from organizations, so they do not provide alternative technology options
This may seem like an unnecessary expense but something designed to meet specific needs often appears expensive and complex. Organizations cannot afford to dismiss technology that appears complex because it meets regulatory demands that easier solutions do not accommodate.
Australian vocational training organizations working in compliance-intensive environments have some of the highest technology requirements in the realm of student management software, training documentation software, and compliance reporting software. Many of these organizations discover that generic educational institutions can no longer serve their needs as well as services like the one at https://cloudassess.com/.
Organizations in regulated industries have far higher stakes when it comes to technology decisions than unregulated organizations. Poor decisions about technology acquisition do not only lead to inefficiency—they threaten the organization’s ability to operate altogether.
Constant Readiness for Audit
Unregulated organizations can store their documentation in any way suitable for internal organization. Regulated organizations must be ready for external examinations at all times.
In a regulated industry, organizational records need to be accessible. Steps must be taken to ensure that work constantly matches documented processes. There must also be evidence of compliance with every obligation a regulator imposes on the organization.
This impacts how organizations running in regulated environments prioritize activities. Things that can be put off a while in terms of supporting organizational operations cannot be deferred when it comes to preparing regulatory compliance documentation.
Something that needs prioritizing constantly might use up people’s time even if it does not appear to move the business forward. Working in a constantly potentially auditable environment affects the mental aspect of operating in any job role in these settings. Making mistakes does not only have adverse impacts on performance; these mistakes become potential regulatory issues when people review documents.
Resource Allocation Considerations
Unregulated businesses can allocate resources in many ways, primarily focusing on what will generate the most value for their mission and goals. Organizations running in regulated environments must allocate resources necessary for compliance processes that do not add value to their core functions but are legally required.
Resources get devoted to maintaining documentation such as logbooks. Staff members need to set aside time regularly for this function without it providing value to what these staff members do for a living.
Organizations also need to be regularly trained on compliance requirements rather than placing value on the core work that sustains these organizations. Auditors must also be prepared ahead of time, taking up extra attention from management team members.
Organizations attempting to operate in regulated environments often overlook the burden compliance can place on their resources. It takes less time and fewer resources to adequately plan for these issues when attempting to navigate the complexities of dual operating systems.
Decision-Making Approaches
Decision-making in unregulated organizations relies on logic, costs, benefits, and outcomes. In regulated organizations, there is one other important consideration: compliance with regulations takes precedence over everything else.
Business decisions must now fit into frameworks set out by regulators. Everything that makes sense from a business perspective might not make sense when taking other obligations into account.
This impacts how every organization plans for growth or innovation as well. Organizations should first determine whether something is feasible under regulations before moving forward with ideas they want to implement into their organizations.
The pace of their growth must now also be managed while meeting compliance requirements of others to ensure they can continue doing business as they do now.
Operating Well within Regulatory Environments
The best-regulated organizations operate on the premise that compliance obligations run the show rather than hinder work. They build their organization around these obligations rather than attempting to work around obstacles created by these regulations.
In some cases, this means investing in systems that still might seem expensive; devoting time to complete documentation remains a requirement, even if it seems tedious; trusting that systems still might be inefficient but will eventually become easier to use; and accepting that compliance requirements pose real challenges worthy of people’s attention dedicated toward navigating these processes.
The organizations that struggle most with regulation requirements are those still attempting to operate like an unregulated organization while meeting compliance requirements as an afterthought. There are no afterthoughts worth crafting excellent solutions within regulated environments. It requires reconsideration of how one operates entirely over simply making minor changes based on business-as-usual operating protocols.