Avoided Penalty Fees, Reputational Damage, And Legal Costs

Evidence and data. Interviewees consistently highlighted regulatory pressure and reputational risk as primary drivers for investing in EQS Compliance Cockpit. Prior to implementation, their organizations faced fragmented compliance processes and lacked robust mechanisms to prevent escalation of unreported cases. Several interviewees referenced the introduction of the EU Whistleblower Directive and similar regional mandates as critical triggers, noting that failure to comply could result in significant financial penalties and reputational harm. EQS Compliance Cockpit mitigated the risks by:

• Creating a safer environment to speak up. Interviewees shared that they believe the EQS platform is easy to use and secure, so employees are more likely to share concerns, which contributed to the increased volume of cases. The legal counsel at an industrial manufacturing firm stated: “Employees feel safer and more comfortable reporting issues. We’re creating a culture of speaking up.”

• Enabling proper oversight with centralized case management capabilities. As the SVP of global compliance at the business processes firm mentioned: “The platform gave us visibility and structure. We can now track every case, apply front-end controls, and ensure compliance before issues arise.”

• Reducing risks relating to unreported cases. Interviewees described reputational damage as a major concern, particularly for publicly listed companies operating across multiple jurisdictions. Unreported cases created significant risks.

Modeling and assumptions. Based on the interviews and industry data, Forrester assumes the following about the composite organization:

• The composite organization manages 125 cases in Year 1, increasing to 152 by Year 3, driven by improved reporting channels and compliance campaigns.

• Without a unified ethics platform, there is a 0.5% probability of unknown and unreported cases escalating to a point of crisis.

• The expected regulatory fine and reputational damage would cost $130,000 per escalated case.

• These assumptions are informed by interviewee feedback that, prior to EQS, compliance teams lacked proactive controls and visibility, increasing exposure to regulatory and reputational risk. The introduction of EQS enabled centralized case management and front-end controls, significantly reducing this risk.

Risks. The impact of this benefit could be lower for some organizations because:

• The number of compliance cases and risk of case escalation could be lower.

• The potential regulatory fines and reputational damage, which vary depending on the jurisdiction, industry, and nature of the noncompliance behaviors, could be lower.

Results. To account for these risks, Forrester adjusted this benefit downward by 25%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $167,000.

Case Management Efficiency

Evidence and data. Decision-makers interviewed for this study shared that their organizations saw increases in compliance team efficiency throughout case management cycles. EQS made the following tasks significantly more efficient:

• First case assessment. Interviewees’ organizations significantly reduced the duration of first case assessment. Prior to implementing EQS, it took about one week to complete case routing and triage, such as identifying the right case managers in operating countries. EQS allowed direct communication between case managers and corporate compliance teams, and provided multiple triage options, such as by named subject, risk, case type, and geography.

• Case resolution. EQS streamlined case management workflows, enabling faster resolution and reducing administrative burden for compliance teams. The director of global ethics hotline at a business processes firm mentioned: “By moving to a much simpler system, we saved days closing cases, if not weeks. We have knocked off five to 10 days per case.”

• Resolution approval process. Prior to adopting EQS, limited team capacity and inefficient communication channels often delayed compliance approval processes. One interviewee recalled having to reach out to colleagues for input through phone calls or in-person visits, which were not always feasible, especially across different sites. Their tools were not integrated, making back-and-forth communication cumbersome and slowing decision-making. With EQS Compliance Cockpit in place, interviewees’ organizations processed case resolution approvals more smoothly and gained more immediate and structured collaboration. The SVP of global compliance at the business processes company said: “A case would get to a certain point and then wait for an approval for a day or two. If no one pushed it, it wouldn’t move forward.”

Modeling and assumptions. The following considerations and assumptions are made for the benefit category:

• There is a 43% efficiency improvement for speak-up case management and a 60% efficiency improvement for gifting (e.g., gifts, travel and entertainment) and conflict of interest disclosure management.

• Time actively working on the cases is 25%, which indicates a case manager would handle three to four cases at the same time on average.

• The fully burdened hourly rate for a compliance analyst is $45.

Risks. It is possible that the impact of this benefit will be lower if:

• An organization’s previous setup is more efficient than the composite’s prior state.

• The average hourly rate for a compliance analyst is lower.

Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $199,000.

Audit Cost Reduction

Evidence and data. Interviewees shared that centralizing case management workflow and documentation simplified auditing processes. Specifically, EQS enabled:

• More efficient data identification, collection, and sharing. Interviewees reported that prior to implementing EQS, internal audits were time-consuming and resource-intensive due to decentralized case management systems and manual documentation processes. Compliance teams relied on emails, spreadsheets, and shared folders to store case information, which made it difficult for auditors to locate relevant data and verify compliance controls. As the legal counsel at an industrial manufacturing firm mentioned, the benefit of EQS was that: “We can share cases with other internal stakeholders who need to be involved in the investigation. ... It’s more compliant than exchanging emails.”

• Clearer and more transparent audit trails. Interviewees highlighted that their prior lack of centralized repositories required auditors to perform broad sampling and manual checks, increasing audit effort and extending timelines. With the implementation of EQS, interviewees claimed to have experienced a 5% to 10% reduction in internal audit efforts on tasks such as broad sampling, resulting in quicker time to more narrowed investigations where appropriate.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• The organization has 10 internal auditors.

• The average fully burdened annual salary for an auditor is $94,500.

• The productivity recapture rate is 100% as all the time saved from manual work is reinvested to conduct more thorough and higher quality audits.

• The composite reduces the effort to complete the annual auditing process by 5% in Year 1 and by 10% in Year 3 as more employees use the platform and the new compliance process becomes more streamlined.

Risks. The impact of this benefit could be lower for an organization if:

• It has a lower overall audit burden.

• Its industry and location affect auditor salaries.

Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $168,000.

Case Analytics Efficiency Improvement

Evidence and data. Interviewees described how reporting and analytics tasks were manual and time-consuming prior to implementing EQS. Compliance teams relied on spreadsheets and ad hoc processes to compile case data, which made dashboard creation and trend analysis inefficient. EQS:

• Supported efficiency improvements in generating data analytics dashboards. EQS made it much easier to create dashboards and analyze data. As the regional risk and compliance manager at a travel technology organization said: “It’s easier to do reporting now with the tool than with what we had before. We just download it and then put it in the dashboard. We are not taking as much time to produce these reports or dashboards.”

• Supported decision-making improvements for compliance control and risk mitigation. With faster dashboard creation and improved visibility supported by centralized data on EQS, compliance managers were able to introduce new controls that were fully informed by data. The regional risk and compliance manager at a travel technology organization explained, “Seeing all the data allows us to decide if we need to change or introduce new controls, which mitigates the risk even further because we start to see the types of gifts people are asking for, so we are aware of the types of potential issues that may come up.”

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• Prior to EQS, dashboard creation and analytics required manual data compilation, taking approximately 2 hours per week for compliance staff.

• With EQS, the composite reduces the effort required to create dashboards by 85%, as the platform enables automated data exports and streamlined reporting workflows.

• The composite organization performs 48 reporting and analytics tasks annually, including monthly general reports and compliance campaign-related performance reports.

• One compliance officer is responsible for analytics and reporting activities and has a fully burdened hourly rate of $78.

Risks. It is possible that an organization’s previous setup is more efficient, that its auditing effort is lower, or that salary rates are lower.

Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $15,000.

Noncompliance Penalty Fee Avoidance

Evidence and data. Globally, there has been an increase in measures relating to employee rights and how organizations should be protecting their employees in events related to ethical business practice violations. As such, jurisdiction- and industry-specific governing bodies have developed directives for industry players to adhere to with consequences of regulatory fines for noncompliance. In general, whistleblowing systems to protect employees require: 1) anonymity, 2) official and clearly defined channels to report, and 3) strong guarantees of confidentiality, nonretaliation, and fair investigations.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• Regulatory mandates such as the EU Whistleblower Directive require organizations to implement compliant whistleblowing systems with features including anonymity, secure reporting channels, and guaranteed confidentiality. Interviewees confirmed that failure to meet these requirements could result in regulatory fines.

• Forrester conservatively estimates the global average regulatory fine for noncompliance to be $21,028.

• The composite organization avoids this penalty in Year 1 by implementing EQS Compliance Cockpit, which meets and exceeds minimum compliance requirements. No additional regulatory fines are assumed for Years 2 and 3.

Risks. The regulatory fine could vary depending on an organization’s jurisdiction and enforcing entities.

Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $18,000.

Unquantified Benefits

Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:

• Improved ethical culture and awareness. Interviewees noted that the EQS investment helped accelerate compliance practices across their organizations. With executive sponsorship and an easy-to-use and trusted platform, campaigns such as annual conflict of interest questionnaires achieved high participation rates. As one interviewee said: “Last year was the first time we did the annual conflict of interest campaign using the tool, and we achieved 98% compliance. … People are starting to understand why we do this.”

• Enhanced policy management and training effectiveness. Interviewees’ organizations leveraged EQS to improve policy visibility and provide practical examples and FAQs, making compliance guidelines easier to understand. They described using the content collected through the platform as an opportunity to educate employees during case approval processes.
  The regional risk and compliance manager at a travel technology organization said, “I also use [the EQS Approvals Module] as a teaching moment a lot of times to go over things with people to help them understand.”

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement the Compliance Cockpit and later realize additional uses and business opportunities based on the EQS product roadmap, including:

• Expanding the compliance value to the full supply chain. Since the completion of the interviews, EQS has launched an integration between its Policy and Third Party modules, which will support organizations in avoiding potential audit failures or regulatory fines that are related to their supply chains.

• Supporting compliance campaigns. To ensure the success of EQS adoption and ethical culture enhancement, interviewees have developed their own compliance campaigns. EQS will provide more capabilities in the platform to drive employee awareness and engagement through targeted and trackable campaigns.

• Leveraging platform insights to enable prescriptive compliance. Based on collected insights, EQS can identify significant risk pockets, such as one region having low policy comprehension, and provide recommendations for additional compliance programs, training, and budget optimization.

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Total Economic Impact Approach).