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Standards for Compliance and Growth Challenges

Standards for Compliance and Growth Challenges

Standards for Compliance and Growth Challenges

A Tool for Effective System Design

Background

There is broad agreement that organizations' capability to promote innovation and creativity while controlling the quality of their products and services are the key drivers of competitive advantage. In their endeavour to enhance business, organizations frame their policies indicating a commitment to deliver enhanced value to their customers. This is generally done through continually improving their products/processes and services. The emphasis and focus are being shifted towards:

  • Continual upgradation and utilization of infrastructure and human resources
  • Continual improvement of processes through innovation, technology and knowledge management

During the 1990s, organizations started getting formal recognition of various Management Systems frameworks like QMS, EMS, OHSAS, etc., and their focus then shifted to ISMS, PIMS, and EnMS. This aligns with new areas of concern like security, sustainability, circular economy, etc., while maintaining and upgrading the earlier compliances.

Though these frameworks are pretty structured and robust, they are generic because they apply to businesses of various sizes and natures. The user of these frameworks struggle for reference architecture and benchmarks for designing their processes, which have a high-value proposition and bring efficiency, effectiveness, and compliance, leading to better business results.

As an organization grows, management looks for more formal systems with result-oriented structures where information is institutionalized. Knowledge is the key differentiator for a mature organization from its competitors.

Knowledge Management Standards and Organizational Maturity

While not completely synonymous, "knowledge" is often considered a key component of professionalism. Having a deep understanding and expertise in a field is a significant aspect of professionalism. The maturity process moves from Awareness to Wisdom.

StageKnowledge Type
Awareness (Availability of content)DATA (Explicit)
Understanding & TrialINFORMATION (Combined)
AdoptionINFORMATION (Interpreted)
AbsorptionINTELLIGENCE (Insight Externalized)
InstitutionalizationKNOWLEDGE (Internalized, Learned)
Business & Society LinkagesWISDOM

Standards are pivotal in an organization's maturity journey, guiding it from data to wisdom. Standards facilitate this growth by providing rationale and building the narrative in the business environment context.

Standardization of wisdom (institutionalization of information) is crucial for organizations as it ensures consistent quality and supports governance and Risk Management Standards for their product design, manufacturing, and vendor development, ultimately contributing to a robust and reliable delivery of products/systems. For sustainable growth, organizations strive:

  • To remain current with developments in technologies and compliance requirements
  • To move up in the value chain, be relevant in a business context and be part of the nation's growth story
  • For leadership roles and positions in industry, trade, and social life

Role of ISO Standards and IEC Standards in Business

Due to the constant evolution of technology in various domains, the role of standards in the product life cycle needs to be better understood. The professionals can derive high value by understanding and implementing these best practices and benchmarks. Standards generally define these.

A standard is defined as a document, established by consensus and approved by a recognized body, that provides, for common and repeated use, rules, guidelines or characteristics for activities or their results aimed at achieving the optimum degree of order in a given context. Similarly, standardization is formulating and applying rules for an orderly approach to a specific activity for the benefit and with the cooperation of all concerned, particularly for promoting an optimal overall economy, considering functional conditions and safety requirements. It is based on consolidated results from science, technique, and experience. It determines the basis for the present and future development and should keep pace with progress. These standards' attributes and the standardisation process's robustness make them a powerful tool for effective system design to meet the challenges of compliance and growth.

Standards Development Organizations (SDOs)

Any organization that develops and approves standards using various methods to establish consensus among its participants is called a standards development organization (SDO). These organizations may be accredited, international treaty-based, private sector-based, an international consortium, or a government agency.

Examples of SDOs:

  • IEC: An organization that creates standards for electrical and electronic products and systems
  • National Institute of Standards and Technology (NIST): An influential SDO that many countries use to form their regulations
  • American Petroleum Institute (API): An SDO that develops standards for the petroleum industry
  • ETSI: An SDO that develops standards for the telecommunications industry
  • British Standards Institution (BSI): A nonprofit SDO that develops standards for the United Kingdom
  • European Committee for Standardization: An SDO that brings together national standardization bodies from European countries
  • UL (Underwriters Laboratories): A standards development organization (SDO) that creates product safety standards

International Standards: ISO Standards and IEC Standards

ISO Standards have developed over 25,311 International Standards in various fields by more than 300 Technical Committees covering:

  • Health
  • IT & related technologies
  • Transport
  • Environmental sustainability
  • Management & services
  • Security, safety and risk
  • Energy
  • Engineering
  • Materials
  • Diversity and inclusion

The International Electrotechnical Commission (IEC Standards) has developed over 12,000+ International Standards in various fields by more than 115 Technical Committees covering:

  • All electrotechnologies, including energy production and distribution
  • Electronics, magnetics and electromagnetics
  • Electroacoustics
  • Multimedia
  • Telecommunication and medical technology
  • As well as associated general disciplines such as terminology and symbols, electromagnetic compatibility, measurement and performance, dependability, design and development, safety and the environment

Compliance Management Systems and Risk Management

Organizations strive to address risk in the uncertain business environment. These risks come from various sources and domains/regulations like safety, environment, information security, and privacy. The standards are also needed for:

  • Policy Deployment
  • Legal/regulatory requirement
  • Business Environment requirement (competition, etc.)
  • Contract requirement
  • Societal requirement
  • Other requirement (compliance requirements) and implied requirements

Standards help in defining structures where, apart from responsibilities, accountability is also framed in technical terms of risk owner (person or entity with the accountability and authority to manage risk) and process owner (person or team responsible for defining and maintaining a process).

Standard Operating Procedures (SOPs) for Effective System Design

A layered architecture is generally recommended for designing a management system, consisting of governance, management and policy formulation layers for Strategic management, designing of processes and procedures for tactical management, operational management and working instruments/templates for operational practitioners. Standards shall be used to formulate various Standard Operating Procedures (SOPs), which may apply to all three levels of organizational manpower.

The organization's maturity is measured by the strength of its standard operating procedures and how they are benchmarked with globally recommended practices or global standards. To keep it current, the same shall be regularly reviewed and upgraded, keeping in view the amendments in the source standards on which SOP was based, the publication of new standards with the advancement of technologies and the emergence of new concepts and theories. The same shall be institutionalized by incorporating “Key Pointers” in SOP, also known as control points/recommended practices adopted from these global standards/benchmarks. This will facilitate the enhancement of the organization's maturity and growth in business as an inbuilt agenda.

SOP Development and Key Attributes

Specific and Detailed: It clearly defines each step of a process with precise instructions, leaving no room for ambiguity.

Easy to Understand: It uses simple language and formatting, making it readily understandable for all employees, regardless of their experience level.

Visually Appealing: Incorporates diagrams, flowcharts, or images to enhance comprehension.

Regularly Updated: Periodically reviewed and revised to reflect procedures, regulations, or technology changes.

Traceable: Includes documentation allowing for tracking of actions and decision-making within the Process (traceable to global/source standards).

Quality Focused: Emphasizes quality control measures to maintain consistent standards in the output.

Compliance Oriented: Adheres to relevant industry regulations and standards.

Accountability Defined: Assign responsibility for each task within the procedure.

Feedback Mechanism: A system for gathering feedback and improving the SOP over time.

Accessible: It is easily accessible to all employees through a centralized system.

To summarise, a good SOP shall be accurate (to the extent that it can be treated as a statement of truth), compliant with legal/regulatory requirements, if any, in the context, precise, comprehensive and complete. The SOP should be tested and validated by trials, and sufficient training should be provided to its audience/user for implementation.

Company Standardization and Standards Engineer Role

In the complex environment of business challenges, Company Standardization holds an important position. It is the first level at which the corporate interest begins to function and organized effort becomes predominant. This company's standardization functions as a source and a sink of information. As a source, they generate standard operating procedures (SOP), policies and processes. As a sink, this function uses global standards as tools & means to formulate compliance procedures with regulatory requirements, contract requirements, companies' policies and other miscellaneous requirements. No standards program of any enterprise can be successful without relying heavily on other standards – national & International standards in particular.

Standards Engineer Responsibilities

A Standards Engineer is a practitioner of the discipline of standardization of any level and branch of specialization. A standards engineer creates, maintains, and enforces technical standards for an organization by facilitating the requirement of the standards into SOP's. They ensure that products and services meet industry regulations and standards. Maintains an up-to-date library of all relevant standards, keeps abreast of national and international development in standardization and provides information and advice on all standards matters. This need not be a full-time function, depending on the organization's culture, risk, and availability of resources. This functional responsibility can be assigned to any of the existing functionalities in the organization, such as the Quality assurance manager co, compliance manager li, library/TIC, Knowledge hub, etc.

Institutionalizing Knowledge Management Standards

Identify the role of the resource person as a standards engineer. Top management should commit to building this library of knowledge for the organization's growth. This commitment can be shown by providing the resources for professionals (e.g., standards engineers) to execute this task, as well as budgetary support and a policy on the expenditure for this task.

Establish activities and tasks to identify the organization's need for various standards. Often, this is done through a committee to make it a comprehensive work that is justifiable and minimizes selection.

It is recommended that you focus on the management system standards initially. A management system is how an organization manages the interrelated parts of its business to achieve its objectives. These objectives can relate to a number of different topics, including product or service quality, operational efficiency, environmental performance, health and safety in the workplace, and more.

The system's complexity level will depend on each organization's specific context. For some organizations, especially smaller ones, it may simply mean having strong leadership from the business owner, providing a clear definition of what is expected from each employee and how they contribute to the organization's overall objectives without extensive documentation. More complex businesses operating, for example, in highly regulated sectors, may need extensive documentation and controls to fulfil their legal obligations and meet their organizational objectives.

The benefits of an effective management system for an organization include:

  • More efficient use of resources and improved financial performance
  • Improved risk management and protection of people and the environment
  • Increased capability to deliver consistent and improved services and products, thereby increasing value to customers and all other stakeholders

Identify the resource organization, a distributor with an established quality management system and a channel partner with the desired SDO's. Proficient in providing its standards provisioning services in real-time online, considering your business criticality.

Identify the standards required in different configurations, like:

  • Subscription to complete set (IEC or ISO, etc.)
  • Subscription to standards segments or Technical Committee/subcommittee wise (e.g. JTC I SC 27 for cyber security)
  • Subscription to Custom collection (e.g. set of 100, 200. Standards mixed in nature from an SDO)
  • Decision on subscription vs purchase.

Economic consideration should be given to the procurement scale since standards should be treated as knowledge assets. The procurement cost is not linear; the more you purchase, the more you save. View your future requirements from this perspective and build some cushion for them.

The following factors may be considered when identifying the standards needed for short, medium and long term:

  • The gestation period of understanding the requirement and its implication
  • Time required for the absorption of technologies implied in the standard
  • Risk of not having the standard (Knowledge) in the medium-term in the timeline
  • Risk of becoming obsolete and leading to an image of unprofessional organization. A strong standardization program in an organization enhances the self-esteem of its personnel, leading to a confident organization
  • Risk of going out of competition, not understanding the contractual requirements
  • Building a culture of adoption and absorption of knowledge and an organization with long-term critical thinking rather than a penny-wise-pound-foolish approach
  • Respect for a professional approach, including patents, copyrights and other legal requirements about intellectual property rights

Emerging Areas: AI Governance Standards and Future Trends

To be a frontline and forward-looking organization, keep tracking upcoming standards in emerging areas, e.g., following areas that are all-pervasive and will be a compulsive business requirement in the near future.

  • SC 27 of JTC I of ISO/IEC publishes standards for the cyber security of IT information infrastructure.
  • Standards published on Governance risk and compliance. These standards are published by ISO, e.g. corporate governance ISO 37000, risk management ISO 31000 & compliance management systems ISO 37301
  • AI Governance Standards: Standards, such as those developed by ISO/IEC JTC 1/SC 42 on artificial intelligence, play a pivotal role in addressing the responsible development and use of AI technologies. They help to bridge the gaps in regulation, giving decision-makers and policymakers the tools to establish consistent and auditable data and processes.

ISO 42001 for AI Governance

ISO 42001 is a globally recognized standard that provides guidelines for the governance and management of AI technologies. It offers a systematic approach to addressing the challenges associated with AI implementation in a recognized management system framework covering areas such as ethics, accountability, transparency and data privacy. Designed to oversee the various aspects of artificial intelligence, it provides an integrated approach to managing AI projects, from risk assessment to effective treatment of these risks.

Conclusion

Standards are intellectual assets, and massive efforts go into framing this bank of knowledge, and it should be respected accordingly. Making society compliant with laws, conventions, and best practices standards plays a significant role from the perspective of business and society. As stated by C Rajagopalachari, the first Governor General of free India:

\"Standards are to the industry as Culture is to society.\"

This translates to \"Technological standards help to regulate society in so far as its technical needs are concerned in the same way as cultural standards serve to regulate society in the sociological sense.\"

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