ROI of Compliance: How Denied Party Screening Drives Value Creation for the Organization

By Brian Hodgson, General Manager, Global Trade Intelligence, Descartes

Adopting a denied party screening software solution and successfully implementing it throughout your organization can provide significant benefits.

These business benefits include preventing penalties and fines, promoting sustainable business practices, and enabling growth.

Amidst an increasingly complex and challenging regulatory landscape, leveraging the benefits of a denied party screening solution has become mission critical for a variety of organizations whose operations tap into the global supply chain. Yet, measuring the ROI of a denied party screening software isn’t as straightforward as it is with other types of business software.

Justifying the cost of any new solution and how it will improve processes throughout critical departments is a vital step in the buying process, but an ROI formula may not be able to fully capture the tangible and intangible benefits to be derived from a screening software. In this article we will share insights on how to measure and maximize the benefits that a denied party screening solution provides and break down how integrating the right solution into specific business processes contributes to the ROI of the software solution.

The High-Level Overview of Value Creation

Before we dive into specific departments and use cases, let’s discuss the overall process of using denied party screening software to drive business value.

The expansion of various regulations such as forced labor, and controlled technology amongst others, means that more business processes and internal stakeholders are involved in regulatory and trade compliance. Procuring any new software solution that many employees may need to interact with can be a heavy investment, in not only the upfront costs of the solution, but also in the time and resources that need to be allocated to training employees and revising processes to enable successful implementation, not to mention potential disruptions.

As a result, thoroughly understanding each department’s objectives and mapping denied party screening into their specific processes is key to building a compelling business case and supporting value creation. Once the software is successfully implemented, the new solution improves workflows rather than creates friction or an additional burden. Sanction screening software with the right integrations and flexibility enables better operational excellence throughout the organization, from sales to logistics. This article explains how to identify a best-in-class denied party screening solution for your organization.

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Enable Enterprise-wide Operational Excellence

Truly realizing the value of a denied party screening tool depends on thoroughly analyzing specific processes throughout your organization, then augmenting them with a leading sanction screening tool.

Enabling better processes and compliance performance will look different for every organization. Let’s examine some scenarios and case studies, focusing on how key business processes will benefit from successfully implementing a denied party screening solution.

Sales and CRM

Your sales teams are typically the first point of contact for prospects, leads, and customers, making them a pivotal opportunity to conduct denied party screening before establishing a business relationship. Yet, most sales representatives are not equipped to perform preliminary screenings before focusing on closing sales, which presents significant risks to the organization.

At the same time, for the sales team to put work into qualifying leads and closing deals with a potential client who ends up being on a restricted or denied party results in significant loss of time and opportunity which are quantifiable costs of not having a robust denied party screening software. For those with ineffective legacy or manual screening processes, they experience a significant delay in customer onboarding.

Fortunately, Descartes’ denied party solution offers robust integration with Salesforce, allowing our clients to run denied party requests within the popular CRM. Sales representatives don’t need to be tasked with manual processes while reaping the benefits of improving sanction compliance and minimizing time spent with denied parties.

Many of our existing clients leverage our Salesforce integration to improve efficiency throughout their sales processes and mitigate risks.

EDB, a Software-as-a-Service platform that must comply with international regulations, integrated the Descartes Visual Compliance platform directly within Salesforce to expedite compliance processes, accelerate sales cycles, and minimize third-party risks.

Movella, a high-tech 3D motion tracking technology manufacturer, integrates our Descartes Visual Compliance solution with Salesforce to comply with comprehensive export regulations affecting the many industries it services.

Both of these case studies indicate similar business benefits following successful integration, including:

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Order Fulfillment

Order fulfillment represents a valuable final touchpoint to ensure regulatory and trade compliance before shipping products to end users. The process typically involves several third parties who pose a form of risk to the organization. In the context of ecommerce, the order fulfilment process needs to happen quickly and seamlessly without delay or friction for the customer. This has sometimes led companies to tighten their denied party screening policies such that any hits are immediately cancelled. This results in loss of revenue, and high customer dissatisfaction from denial of service. Conduct screening manually when order volumes are minimal, but as the company grows, manual screening rapidly becomes a monumental task.

Implementing automated screening processes into the order fulfillment process eliminates the need for manual screening, allowing products to ship faster by removing the bottleneck.

One of our case studies focuses on Adafruit, a high-tech manufacturing company that ships components globally, such as circuit boards and microcontrollers. Adafruit integrated our platform to remove manual screening workflows, which began impeding growth as the company expanded. Descartes Visual Compliance allowed them to remove this barrier and better fulfill orders.

Integrating our denied party screening platform into existing processes allowed the organization to:

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Procurement and Logistics

Organizations throughout most industries need to handle various procurement and logistics processes as part of daily operations. These processes typically involve agreements with international companies, which then necessitates conducting denied party screening to avoid transacting with any sanctioned parties.

Conducting these processes throughout the supply chain can rapidly become time-consuming and costly. Additionally, any errors in manual screening workflows can incur significant fines and penalties.

One of our clients is a global leader in the steel and metal works industry, Reliance Steel and Aluminum. The Fortune 500 company procures materials and ships materials to end users, which requires accurate restricted party screening to remain compliant with sanctions.

Reliance Steel and Aluminum adopted Descartes’ Visual Compliance’s automated screening and rescreening. Since implementing our platform with its logistics processes, Reliance Steel has saved approximately 28,000 man-hours per year. In addition to the significant time savings, the company also:

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Human Resources and Personnel Productivity

Conducting denied party screening is unavoidable for many organizations across all industries. Yet, conducting sanction screening manually consumes a significant amount of time — and that adds up. Additionally, manual processes may result in errors that end up incurring fines and penalties.

Integrating the right compliance screening platform allows organizations to enhance personnel processes and better utilize all human resources substantially.

One of our clients adopted Descartes Visual Compliance to ensure compliance with global trade regulations. Argosy International, manufacturer of specialty chemical products focusing on aerospace and automotive industries, needs to be aware of a significant amount of sanctions and other regulations throughout its operation.

After implementing Descartes Visual Compliance, Argosy increased export compliance productivity by 75%. Other benefits include:

Measuring the Denied Party Screening Software
Solution ROI

Successfully implementing a screening tool helps avoid fines, minimize audits, and stay compliant. However, the ROI of sanctions compliance itself is a challenge to measure, as there isn’t always a direct link to revenue generation and projected returns but rather the value lies in avoiding risk and the associated costs of inefficiency.

The approach to measuring and maximizing the ROI of a denied party screening software involves aligning and customizing the solution to fit the organization’s specific regulatory risk profile, and then integrating the solution with proper workflows throughout core business processes.

We’ve explored several case studies of real companies that realized significant value from Descartes sanction screening platform. Our clients were able to understand the ROI of our denied party screening platform by measuring changes in performance, improved compliance productivity, reduction in cost, higher accuracy, increased sales velocity and enabling growth by removing bottlenecks. A cut-and-dry formula for measuring ROI may not apply to denied party screening software, but the benefits of adopting a best-in-class solution will be evident throughout your entire organization. A properly integrated solution will enable you to meet your compliance objectives, help manage constant and increasing risks, while driving / supporting value creation and growth.

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Partner with Descartes for Effective Denied Party Screening Software

Adopting the right denied screening software and successfully implementing it throughout your organization can create value at every step. However, truly driving this value depends on adopting the right solution that offers the integrations you need and the flexibility to become the single source of truth across the organization.

Descartes is an industry leader in business intelligence, and we offer highly configurable denied party screening software solutions ready to enhance processes throughout your organization. Our platform is designed to keep you in full compliance while improving operational excellence at every level.

Are you ready to transform your compliance program and support growth with proven denied party screening solutions? Contact us today to speak to a business intelligence expert to learn more. You can also read this essential buyer’s guide to denied party screening to help you select a solution that fits your needs.