Extended enterprise compliance isn’t a one-way street. It isn’t even a two-way street or a highway. Actually, it’s more like a roundabout at rush hour, with stakeholders entering the fray from every direction. If you don’t pay close attention or you’re not sure where you’re going, you’ll crash.
Fortunately, specialized technology is available that works like GPS guidance. It can help make the extended enterprise compliance process much easier to navigate. But what should you know about these solutions? Let’s survey the landscape.
An Extended Enterprise Compliance Use Case
Companies often struggle to stay ahead of employee compliance – especially in heavily regulated industries like construction, healthcare, pharmaceuticals, energy, utilities, chemicals, steel, construction and manufacturing. But for organizations that rely on contractors to round-out their workforce, there are extra layers of complexity.
Both employees and contractors pose significant compliance challenges. However, contractors definitely cause more compliance headaches, safety risks and financial damage.
In fact, the total cost of weak contractor compliance management is much more than just penalty fees – especially when noncompliance leads to extremely expensive operational disruptions or delays.
For example, metal welders on offshore oil and gas rigs need to complete and maintain diverse certifications. These credentials must be current when a welder boards the helicopter en route to the rig and remain current throughout the assignment.
To verify that their certifications are up-to-date, rig workers typically carry tools that are tied to one or more compliance databases – either an ID card that can be swiped for status checks or a mobile learning and tracking app.
Workers who fail to show proper certifications and related documentation are denied transportation to the rig. For every rejected worker, companies sacrifice helicopter flight fares worth $5,000 or more each way, along with lower production capacity on the rig until a certified replacement is found. The opportunity cost can easily total hundreds of thousands of dollars a day. Now that’s serious financial risk!
Compliance = More Than Training + Certifications
Tracking contractor training and certification status is extremely important, but compliance verification runs even deeper. For example, hiring companies must ensure that the following items are up-to-date for every employee and contractor:
- Health, Safety, Environmental and Quality Documentation – This includes the contracting company’s policies and program guidelines, work hours, incident reports and injury reports.
- Insurance and Procurement Records – Proof of minimum and mandatory insurance coverage, as well as other hiring-related documents such as W-9 tax forms, business licenses and special certifications for veterans, minorities and other relevant affiliations.
- Hiring Company Policies and Processes – Compliance with the hiring organization’s internal rules and regulations. For example, a Brazilian Pepsi plant may have vastly different contractor hiring standards than a Coca-Cola plant in the same country.
- Individual Screening Results – Reports from background and criminal record checks, education verification and drug tests.
- Compliance Training Records – Results of all contractor training that satisfies regulatory and hiring company requirements.
The Compliance Stakeholder Ecosystem
It takes a village to ensure regulatory compliance, so understanding the various players is important. Here’s a brief overview:
- REGULATORY BODIES – These public entities establish and enforce the local, state and national rules that hiring companies and contractors must follow.
Federal government examples include the Department of Transportation (DOT), the Federal Drug Administration (FDA), the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA).
- HIRING ORGANIZATIONS – These are large companies that need access to qualified contract workers at scale. Think of organizations like AstraZeneca, BP, BHP, Georgia Pacific, Pepsi, TVA and Whirlpool. They may hire individual contractors directly, but more often they hire contractor companies who supply their own employees.
For example, imagine that Exxon wants to expand production capacity at its Baytown Refinery in Texas. It would solicit bids from reputable contractor companies who specialize in supplying talent on demand.
- CONTRACTOR COMPANIES – These organizations employ workers who are assigned to large-scale client projects all over the world. For example, continuing the scenario mentioned above, Exxon would turn to a contractor company like Halliburton, ThyssenKrupp or Henkel’s & McCoy to fulfill its contract workforce requirements.
As part of their management responsibilities, contractor companies ensure that assigned employees comply with relevant regulatory and hiring organization regulations throughout the life of every project.
- COMPLIANCE CONTENT PROVIDERS – To support compliance training requirements, content companies like Beacon, California Chamber of Commerce, OpenSesame, Skillsoft, Syntrio and Vivid Learning Systems produce accredited online course libraries for every type of occupational, health and safety topic.
Traditionally, live classroom instructors delivered compliance training, supported by printed manuals and workbooks. However, content providers have moved online to help customers save time and money. These content companies serve contractor companies, hiring clients, individual contractors, or a combination of segments.
- DATA PROVIDERS – In the compliance space, any organization that captures information about contractor companies and their employees is a data provider. In addition to the content providers above, other examples include:
- Background checking companies such as DISA, Backgrounds Online or Occuscreen
- Drug and alcohol testing organizations such as AWSI, NATSB or TPS Alert
- Specialized operator qualification firms such as American Welding Society or ClockSpring
- Psychological profiling specialists such as Select International or Criteria
The Compliance Technology Ecosystem
With so many stakeholders in the extended enterprise value chain, an effective technology infrastructure is vital. The following components are necessary for a successful business compliance foundation:
- LEARNING MANAGEMENT SYSTEM – Contractor companies, hiring clients and content companies all rely on LMS solutions to manage their compliance training courses, learning requirements, reporting and analytics.
Often the most accurate compliance picture emerges when data from these three sources is combined. Strong compliance LMS solutions are available from NetDimensions, BlueDrop, Compli, Cornerstone, eLogic Learning, Gyrus, Risc, Saba and SumTotal.
- CONTENT AUTHORING – While most compliance training is available commercially off-the-shelf, every hiring client and contractor company must help employees learn and comply with proprietary standards. Content authoring tools like Articulate, domiKnow, Gomo, iSpring and Lectora are commonly used to develop in-house online training.
- MOBILE APPS – Mobile apps have become indispensable for compliance activities, especially when managing a decentralized workforce in the field. They are necessary for downloading online compliance content to a smartphone, working with content offline, and syncing progress or completion results when connected.
- ID CARDS – Hiring companies issue identification cards that can be scanned at any time to confirm individual compliance status. Scanning, tied to compliance databases, occurs at key points of entry and when contractors attempt to use digital systems and other equipment. This ensures that only fully compliant contract employees have access to company facilities and data.
- SECURE APIs – To verify compliance in most extended enterprise scenarios, sensitive information must be shared across systems owned by multiple organizations. Strong API interoperability is required to securely aggregate and use information from these various sources. A common approach involves RESTful APIs that send JSON payloads.
- HOLISTIC REPORTING – Sophisticated supply chain solutions efficiently collect data from across the extended enterprise network and automatically deliver scheduled reports, updates and notifications. They also offer visual dashboards that make it possible to slice and dice data and drill-down as needed for effective compliance gap analysis and troubleshooting. Examples include Apttus, Browz, Quantivate, Reciprocity, SAI Global, Simplify and Veriforce.
To some learning professionals, compliance training seems like a costly and thankless nuisance. But extended enterprise compliance is a highly strategic business issue that requires know-how.
Without strong compliance systems and processes, the wheels of commerce would grind to a halt right in the middle of the roundabout. It may not be easy to manage, but it is essential. As the world of work continues to shift toward contract relationships, the need for extended enterprise compliance is likely to expand.
That means organizations that invest in well-designed compliance solutions are not just responding to today’s regulatory pressures, but are also positioning themselves for future success.
Thanks for reading!
WANT TO LEARN MORE? REPLAY THIS ON-DEMAND WEBINAR:
Convincing employees to engage in training is hard enough. So what happens when you want to educate customers, channel partners and others across your extended enterprise? Relevant content is a start, but it is not enough.
What else does it take to succeed?
Join John Leh, CEO and Lead Analyst at Talented Learning, and Kevin Hanegan, VP of Knowledge and Learning at Qlik, as they explore learning strategies that win extended enterprise hearts and minds. They discuss:
- Innovative marketing techniques to attract external audiences
- Methods for improving content quality and contextual relevance
- How to motivate learners with contests and rewards
- Creative ways to leverage video for stronger engagement
- What custom mobile apps can do to drive continuous learning
- How to measure, analyze and improve your impact, over time
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