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A Sense of Validation

Rented software can help lighten regulatory burdens.

Carbon Copies

This is not to say that hosted programs solve all regulatory problems related to software. Compliance rules and procedures vary widely across sectors — and regulatory bodies. Thus, a potential adopter needs to carefully examine a Web-based application to determine if it applies specifically to the company’s industry. And no matter how secure a hosted piece of software is, regulators will still hold customers accountable for poor recordkeeping or lax internal controls.

Those caveats have not deterred many clients. Users say rented apps help solve a world of compliance problems, including regulatory reporting requirements. Chemical giant DuPont, for instance, uses a SaaS-driven compliance system developed by Enviance to streamline its toxic-waste reporting to the Environmental Protection Agency. (For more on environmental reporting, see “Cleaning Up Carbon.”) The technology collects toxic-release inventory data from 63 U.S. sites and then sends the information to the EPA. Says Aldo Morell, DuPont’s director, safety, health, and environment: “It automatically generates the form that is submitted to the EPA from the site.”

The system has also helped DuPont slash the time it takes to enter and process data into the reports. Equally valuable: Enviance monitors EPA regulatory changes and modifies the reporting software accordingly. That frees DuPont from having to alter the application. Says Morell, “That saves us money.”

John Edwards, a frequent contributor to CFO, is author of The Geeks of War.


A hosted application helps one insurer keep up with a welter of state regulations.

Making sure employees are legally qualified to perform their tasks can be a huge headache in highly regulated industries. It’s a particularly vexing problem in the insurance business, where sales representatives must be certified in each state in which they work. “States have differing rules and regulations,” explains Dan Simpson, chief information officer at Physicians Mutual Insurance. “We don’t want to appoint someone and have them sell insurance in a state that they’re not licensed in. That would cause regulatory issues for us.”

Eager to ease the compliance burden, the Omaha-based carrier turned to Compliance Express, a hosted application from Sircon Corp. The product, a browser-based program that requires no upfront investment in software, allows users to electronically submit appointments and terminations to state insurance departments. The approach provides fast — usually immediate — electronic-transaction confirmation. The software also tracks license renewals.

The hosted program means Physicians Mutual no longer has to physically track rule changes in individual states. The application also keeps the company current with appointment and termination filing procedures and fee schedules. “We were contacting the same information sources as the Sircon database, but we were doing so in an inefficient way,” says Simpson. “We had a number of people executing manual processes to keep track of everything.” And unlike printed directories or onsite software, Compliance Express is continuously and invisibly updated.

So far, management at Physicians Mutual has no complaints about the software. In fact, a cost-benefit analysis found that the SaaS technology generated a 24 percent rate of return, with payback in just over a year. Says Simpson: “It saves us a lot of time and money just by reducing the manpower necessary to keep all of that information up to date.” — J.E.

SaaS for Regs: The Good & the Bad

The Good

  • Software validation can be shifted from customer to vendor.
  • Regulatory information is kept in a consistent form at a central location.
  • Streamlined and automated report filing.

The Bad

  • Compliance rules and procedures vary widely across different industries and regulatory bodies, making it a challenge to find a suitable SaaS application.
  • Technology does not get companies off the hook for poor internal controls.


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