What is Operational Compliance and How to Improve It?

Did you know that even though 70% of companies believe they're compliant, only 25% pass audits on the first try?

So, where are the companies going wrong with their compliance efforts?

Often, it's because they don’t quite understand what operational compliance is. It's not just paperwork; it's how your business actually runs!

Rest assured because we’re here to break down the nitty-gritties of operational compliance!

In this article, we’ll find out what operational compliance is and how you can make it better.

In this article:

• What is operational compliance
• Operational Compliance vs. Regulatory Compliance
• Improve operational compliance in your business
• Elements of a successful operational compliance
• Why companies fail to maintain compliance

Operational Compliance Definition and Why It Matters

Operational compliance means making sure your business runs the way it's supposed to. You need to follow all the rules, standards, and policies that apply to you!

These might be laws from the government, guidelines from your industry, or internal rules your company sets.

It's not just about having rules written down—it's about making sure your team actually follows them in their day-to-day work.

What’s the benefit? If you do it right, operational compliance helps avoid legal trouble!

It will also build trust and keep your business running smoothly and ethically.

What Most People Get Wrong About Operational Compliance

What comes to your mind when you hear “operational compliance”? Most people think it’s just the legal paperwork and regulations - and that’s where they’re wrong!

Let’s clear some common misconceptions first:

Myth 1: Compliance is Just Piles of Paperwork

This is the most common myth about operational compliance. You might think operational compliance is about filling out forms, creating documents, and maintaining records. But that’s not it!

Having documents outlining your company policies is important, like having a weekly work plan. But operational compliance is about making sure those plans are actually followed!

All your business operations should be aligned with the compliance requirements. So, operational compliance is not just about documents, it’s an important process!

Myth 2: Only Regulated Industries Need It

We often think "operational compliance" only matters for huge financial institutions or hospitals with tons of government regulations. But that’s not the case at all!

Yes, regulated companies have more legal compliance. But every business, whether big or small,  needs some level of operational compliance!

Think about it: Do you handle customer data? Then, you likely need to think about data privacy. Do you have employees? Labor laws probably apply to you.

Even making sure your team follows internal processes. For example, things like time off requests are a form of operational compliance!

Never ignore these laws and regulations. They can turn into unexpected compliance or even a legal liability!

Myth 3: IT is Enough to Handle Compliance

Cybersecurity risk is a huge part of today's regulatory environment.

So, you might think the IT department is enough to take care of it. Because they're the ones who set up access controls and prevent unauthorised access, right?

Absolutely, IT plays an important role! But operational compliance touches every single team.

For instance, your marketing team needs to ensure their advertising is truthful and compliant with marketing regulations. Your customer service team needs to handle customer data according to privacy compliance policies. The operations team needs to follow safety guidelines.

Start monitoring your employees today to make sure everything is going smoothly!

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Should Employers Monitor Their Employees? Ethical & Legal Considerations!

Operational Compliance vs. Regulatory Compliance: What's the Difference?

With operational requirements, you'll often hear the term "regulatory compliance" too. But are they the same?

Think of it like this:

Regulatory compliance is like obeying the traffic laws (you'll get a ticket if you don't). On the other hand, operational compliance is also following your company's internal driving rules (like always checking your mirrors) to ensure everyone stays safe and efficient.

Let’s find out the core differences between operational and regulatory compliance-

If you don’t know what operational compliance really means, you may face long-term risks and losses. On top of that, add missed opportunities and failed compliance efforts too!

Operational and Regulatory Compliance in Real-life Industries

For a better understanding of operational and regulatory compliance, let’s explore some real-life examples!

• Healthcare: Think of hospital privacy rules as regulatory compliance. But the nurses have to follow the steps to give the right medicine, ensuring patient safety every time, too! Operational compliance means these daily actions.
• Manufacturing: Regulatory compliance is when factories have to meet legal limits for pollution. Operational compliance is regularly checking the machines and following safety steps on the floor to prevent accidents. It’s how they run things safely!
• Finance: Banks need to follow laws against money laundering, which are regulatory. Operational compliance is when tellers use secure logins and follow clear steps for every transaction to protect your money. Again, it’s all about their everyday procedures!
• E-commerce: Online stores have to respect your data privacy by law because that's regulatory. But the website also has to keep your payment info safe and explain how they use your data. Operational compliance is how they handle your information!
• Tech (SaaS): Software companies have to protect their info by law. This is regulatory, like GDPR! Operational compliance is using strong passwords and securing computer systems to keep your data safe from hackers.

So, align your regulatory and operational compliance program today!

Why Operational Compliance Matters

You might think operational compliance is just a headache, another set of rules to follow. But trust us, getting it right is crucial!

Let’s hear about the compliance risks -

Operational and Financial Risks - The Price You Pay

“If you think compliance is expensive, try non-compliance."
Former U.S. Deputy Attorney General Paul McNulty

Think about a manufacturing plant that skips regular safety checks. This could lead to accidents, halting production (operational risk). Finally, it can face costly repairs and lost revenue (financial risk)!

Similarly, an e-commerce site that doesn't properly secure customer data could face hefty fines under data privacy laws like GDPR. This means direct financial risk!

A shocking 60% of small businesses close within six months after a major data breach due to lost trust and money.

Impacts on Brand Trust: Your Reputation is Everything

When there’s a compliance failure, especially involving data privacy or security, customers lose their trust. This can lead to a major loss in business, too!

The average cost of a data breach in the United States was over $9.36 million in 2024!

Nobody likes unauthorized access. So, make sure your compliance-related activities are in place!

Low Audit Success Rates

Like we’ve discussed before, if you’re not compliant, you’re more likely to fail audits!

And when a company fails its audits, they have to hire external consultants. This means additional cost and remediation efforts!

Reduced Employee Productivity

What happens when you don’t follow labor laws or internal policies in a company? The employees will feel their rights aren’t respected!

This reduces employees’ trust in the company and slows down productivity significantly!

Besides, government investigations and lawsuits can waste valuable employee time and resources. We all know how important time management is for a business!

You might be interested in:
How to Increase Productivity in a Business

How to Actually Improve Operational Compliance

Wondering how to make your operational compliance better? We’ve got you covered!

Here’s our list of easy steps you can follow to make operational compliance better -

Conduct a Compliance Audit

The first step to improvement is understanding your current situation. A compliance audit helps you identify gaps and weaknesses. You can also do risk assessments!

Are your business operations aligned with regulatory requirements? Do they follow industry standards or your company policies?

But what’s the best way to check this? You can use compliance checklist templates and audit software!

Depending on your industry and the type of data you handle, align your audits with global frameworks like -

• ISO 9001 (quality management)
• NIST (cybersecurity)
• SOC 2 (security, availability, processing integrity, confidentiality, and privacy)

Implement Compliance Management Software

If you try to do everything manually, there might be room for errors. Not only that, you’ll lose a lot of precious time too!

Now, you can find many compliance management software and platforms like Auditboard, Arena QMS, Connectteam, etc. These can even help you with simple things like employee hours!

The compliance dashboards in these tools show you real-time insights.

Many automation tools are also available for the risk assessment process and operational processes.

And if you are still having trouble running your management process smoothly, use Apploye for advanced tracking and monitoring features!

Helpful article:
How to Track Employee Hours Effectively

Define KPIs & Metrics for Compliance

How can you tell if your compliance efforts are working? You need to define the Key Performance Indicators (KPIs) and metrics first!

Here’s how to do that:

• % SOP adherence: Tracks how consistently employees follow standard operating procedures.
• Audit score: Measures the outcome of your regular compliance audits.
• Issue resolution time: Tracks how quickly compliance issues are identified and resolved.

Assign Ownership & Roles

Another important step is clearly defining ownership and roles across your company. Make sure you have a dedicated compliance officer who will lead the function!

In 2025, data security, data privacy, and cybersecurity risk management will not be possible without IT cooperation. In fact, technology can improve your productivity.

Finally, cross-team collaboration is also a great way of compliance management.

Related article:
Managing Remote Teams: 14 Proven Strategies for Success

Regular Training & Awareness

Compliance isn't a one-time training session; it needs continuous improvement. Arrange regular and updated training on compliance policies, regulatory standards, and ethical behaviour.

This will create a strong culture of compliance to help you reach operational efficiency. It will reduce potential risks and foster trust!

At the end of the day, your compliance teams will be in charge.

So, prioritize building a healthy employee culture that values operational compliance.

Schedule Continuous Auditing

Don't wait for formal audits to identify problems! Continuous auditing and monitoring are the way to go!

Use real-time employee monitoring systems to prevent compliance violations. You can also try compliance documentation.

There are many tools available for logging and version control, too.

Learn more about:
Employee Monitoring Ethics: What’s Legal, Fair, and What’s Not

Main Elements of an Effective Operational Compliance Program

Still worried about your operational compliance program? Let’s look at the key elements that make it effective -

Simple Policies and SOPs

Make sure your compliance policies are easy to understand. They should also match industry standards and regulations!

Real-time Monitoring and Alerts

Use integrated systems to spot issues early with real-time alerts. If you do it right, monitoring your employees can improve your productivity!

Employee Training and Accountability

Make sure everyone knows the rules and is responsible for following them.

59% of employees say training improves their overall job performance (Source: SurveyMonkey.)

So, arrange frequent training programs to keep your employees updated!

Routine Audits and Self-Assessments

Don’t forget to evaluate your progress! There will always be room for improvement. So, continuously review your processes to find and fix problems.

Also, conduct internal audits to make sure everyone’s on the same page about the compliance tasks!

Data Security and Document Management

Protect sensitive info and keep organized records for proof and easy access.

Why Most Companies Often Fail to Preserve Operational Compliance

Achieving compliance with operational requirements isn't always easy! Especially when a business is evolving, you might face some common breaking points -

Adding New Departments

New teams might operate differently! This makes it difficult to align with the existing compliance programs. So, your company’s operations may feel inconsistent.

But no worries, there are many automation tools and management software you can use for that!

It’s always important to track and monitor all the departments to keep your business running smoothly.

Expanding Internationally

“Expanding into new geographic regions introduces additional compliance challenges” (Source: Scrut Automation)

Growing your business in new countries means dealing with regulatory change. For example, if you do business in Europe, you have to follow GDPR. If you're in California, it's CCPA/CPRA!

Keeping track of all these different laws can be tricky and take up a lot of time. Moreover, distributed team management can also become a challenge!

Employee Turnover Without Documentation

Losing experienced staff is always bad for your business. But what if they leave without properly documenting the key compliance processes and operational standards?

That’s way worse! Not only do you lose crucial knowledge, but it can also lead to potential errors.

New employees won’t receive the best training, and your data transfer will be incomplete.

Let’s Boost Compliance and Productivity with Apploye

As you can see, to ensure business success, there should be continuous compliance monitoring.

But keeping your business on the right track with rules can be tricky! And it gets more difficult when your team is spread out.

That's where Apploye comes in!

Check out our easy compliance solutions -

See What's Happening

Apployes’ time-tracking with screenshot feature lets you see who's working and what they're spending time on. This helps make sure everyone's following work hour rules and sticking to how things should be done!

Spotting Red Flags Early

When you continuously monitor employees, you can spot if someone’s struggling or not complying.

This early heads-up lets you help them get back on track before it becomes a bigger compliance issue.

Remember, effective compliance is the best risk mitigation process for business success!

Get More Done the Right Way

When everyone knows the goals and schedules, they tend to be more focused and get more done. Our compliance software is made for this!

Tracking employees' time with internet usage and online activities makes sure they're following the correct procedures. Now, there's more clarity about how things work!

Perfect for Teams Everywhere

If your team isn't all in one office, Apploye is super helpful. It gives you a way to see that everyone's working and following the rules, even when you can't see them in person! This helps keep your internal controls strong.

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Time Audit: What It is and How to Do It? [With Examples]

Conclusion

Operational compliance doesn’t have to be overwhelming. It’s really just about running your business the right way, every single day. From following internal policies to staying aligned with laws, it all adds up to fewer risks, smoother audits, and a more productive team.

The key? Make compliance part of your daily work culture, not just a one-time checklist.

And with tools like Apploye, you don’t need to guess what’s working—you can see it yourself. From tracking tasks to spotting red flags early, it helps you stay compliant while getting more done.

Start small and stay consistent.

Remember: good compliance is more than just rules. It's about building trust, efficiency, and long-term success!

Frequently Asked Questions about Operational Compliance

What is an example of operational compliance?

Let’s say a factory trains all workers to wear safety gear and follow machine-use rules every day. That’s one of the easiest operational compliance examples! It’s about making sure daily work follows the right rules to keep people safe and avoid trouble with regulators.

How do you monitor operational compliance?

You can track compliance with regular check-ins, simple dashboards, or software, and clear rules. Some companies also use tools like the Apploye tracker to monitor activities in real time. You can also consider having an operations and compliance manager.

What is the difference between compliance and operations?

Business operations are daily activities. For example, making products or serving customers. Compliance makes sure you do these things the right way, following laws, policies, and industry rules. You need both working together to avoid issues!

What are the primary steps to improving compliance?

Start by figuring out where things are going wrong. Then, create clear rules, train your team, and use tools to help you stay on track. Keep checking in often, and make compliance part of your daily routine—not just a once-a-year thing!