White Paper

Learning, Training and Assessments in Regulatory Compliance - Learn How to do it Right

Authors: Thomas Jenewein, SAP Education

Simone Buchwald, EPI-USE John Kleeman, Questionmark

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Table of Contents

Executive Summary ........................................................................................................................................... 3

1. Business Drivers for Compliance Training, Learning, and Assessments ....................................................... 4

2. Types and definitions of Compliance Training and Assessments ................................................................. 7

Examples ........................................................................................................................................................ 8

Compliance Training Target Groups and Topics ............................................................................................ 8

3. What Learning and Assessment Technology can Support ............................................................................ 9

Learning Management System (LMS) ............................................................................................................ 9

Learning Content and Documentation Authoring Tools ............................................................................. 10

Assessment Management System ............................................................................................................... 10

4. Offerings from SAP ...................................................................................................................................... 12

How SAP Enterprise Learning and SuccessFactors Learning Manage Compliance ..................................... 12

SAP Learning Solution, the on-premise offering ......................................................................................... 12

SuccessFactors Learning, the cloud offering ............................................................................................... 13

How SAP Assessment Management by Questionmark Manages Compliance ........................................... 14

How SAP Workforce Performance Builder Manages Compliance .............................................................. 15

Integration Makes It Stronger ..................................................................................................................... 16

5. Trends in Compliance Training and Assessments ....................................................................................... 17

Appendix – Further Reading............................................................................................................................ 21

Biographies of authors .................................................................................................................................... 22

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Executive Summary

Compliance with regulations or corporate policies has become more and more relevant in the last several years. The paper explains eight key factors that make this so: more multinational companies, increasing regulations, increasing multinational laws, regulators requiring more training and assessment, regulators fining more heavily, continued employee turnover, rapid technology change, and the need to remain compliant in spite of the move to informal learning. A critical aspect of managing compliance in organizations is, of course, to ensure that all employees or related target groups know and understand the compliance rules and that they can act accordingly to follow them. This white paper explains the various aspects of managing learning and assessment in the area of compliance. It begins by outlining why and how the topic has become more important, as well as the different facets of compliance learning that exist. Technologies such as learning management and assessment management systems are then described, because only by using such technologies can organizations obtain an efficient and effective set-up to deploy and monitor compliance learning. The paper explains how technologies from the proven market leaders – SAP, SuccessFactors (an SAP company), and Questionmark – can help you create and manage training and assessment for your workforce to reduce compliance risk. It describes how the SAP® Enterprise Learning environment, SuccessFactors® Learning software, the SAP Workforce Performance Builder software, and the SAP Assessment Management application by Questionmark can provide business benefits. The white paper concludes with a look at current trends. After reading this paper you should be able to: - Describe the general field of compliance learning and assessment - Outline how to leverage technology from SAP to manage it successfully We hope you will also take away some overall practical improvements and useful business benefits for your organization.

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1. Business Drivers for Compliance Training, Learning, and Assessments

Eight key factors are increasing the need for training, learning, and assessments in the 2010s to ensure that businesses stay compliant.

1. Multinational companies. Due to the Internet and increasing globalization, businesses are

becoming more international and so need to be compliant in more jurisdictions. Very few medium

or large businesses operate in only one jurisdiction.

2. Increasing regulations. Due to growing public and political concerns around perceived business

failures, governments are increasing laws and regulations that impact corporations. Areas where

new laws or more aggressive enforcement of laws are prevalent include anti-bribery, financial

probity, data security, and consumer protection.

3. Multinational laws. Laws increasingly cross national boundaries. For example, the US Foreign

Corrupt Practices Act (FCPA) has always applied internationally, but the newer 2010 UK Bribery Act

has followed suit. Increasingly, European data protection laws are being applied across national

boundaries.

4. Regulators require training and / or assessment. Almost every regulator in almost every

jurisdiction and industry has rules that require you either to train your employees, document the

training, assess employees, and / or ensure they are competent.

5. Regulators fining more heavily. Regulators are enforcing the rules more diligently and coming

down harder on companies who fail to follow the rules, often with large fines. Regulators are also

focusing more on training and assessment, because they increasingly realize that this is key to

preventing future problems.

6. Employee turnover. Employee turnover, resulting in continual on-boarding and

retraining/reassessment, continues to be a challenge in many organizations.

7. Technology change. The pace at which technology changes means that products in almost every

industry are changing more rapidly than ever before, which increases the need for training.

8. The need to remain compliant while accommodating informal learning. Increasingly, companies

are seeing the benefit of informal learning and the 70:20:10 model, where 70% of learning is done

on the job, 20% is facilitated by others, and only 10% of learning is formal. So employees often

learn how they want or need to learn, but you still need to ensure that your workforce has the

right knowledge, skills, and abilities to help your business remain compliant.

The following graph of data1 published by the US FDA illustrates the scale of the change by showing the number of formal warning letters the FDA issued in the period from 2008 to 2013.

1 From data at http://www.fda.gov/downloads/ICECI/EnforcementActions/UCM384647.pdf

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And it’s not just letters that regulators issue. The graph that follows illustrates the fines2 imposed by the UK Financial Services Authority / Financial Conduct Authority in the same period.

There are examples of high fines in most major jurisdictions. For example, the German Federal Cartel Office (Bundeskartellamt) issued € 505 million in fines in 2011-20123. Fines are highest in the US and in the banking sector, according to a Financial Times article from March 20144:

2 Based on combined data from http://www.fca.org.uk/firms/being-regulated/enforcement/fines/2013 and

http://webarchive.nationalarchives.gov.uk/20130201171633/http:/www.fsa.gov.uk/about/press/facts/fines/2012 3 See

http://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2013/26_06_2013_T%C3%A4tigkeitsbericht.html 4 See http://www.ft.com/cms/s/0/802ae15c-9b50-11e3-946b-00144feab7de.html#axzz32iLvcKGP

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“Wall Street banks and their foreign rivals have paid out $100bn in US legal settlements since the financial crisis, according to Financial Times research, with more than half of the penalties extracted in the past year. The sum reflects a substantial shift in political attitudes towards banks, as regulators and the Obama administration seek to counter perceptions that bankers have got off lightly for their role in the financial crisis.”

Failure to train or assess effectively is only one reason for compliance fines, but it is an important reason. One report by the US FDA5 found that defective training contributed to about 25% of manufacturing process errors. Fines frequently mention failures to train and / or assess as a contributing factor. For example, a February 2014 news release from FINRA reports that the authority fined a US financial services firm $775,000 for training and supervisory failures, and includes a comment that the firm “… failed to ensure that its registered representatives understood the unique features and risks of these products before presenting them to retail clients.” 6 If your employees make mistakes, you as the employer are usually liable for the consequences. This white paper explains how you can use a learning management system as well as an authoring tool and / or an assessment management system from SAP to help manage the training and assessment of your workforce to help reduce compliance risks. In general, you need to train your workforce or give them opportunities to learn, and then you need to assess them to ensure that they have learned what they need to know. SAP technology can significantly aid this process.

5 See http://www.gpo.gov/fdsys/pkg/FR-2013-01-16/html/2013-00125.htm

6 See http://www.finra.org/Newsroom/NewsReleases/2014/P448889

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2. Types and definitions of Compliance Training and Assessments

Compliance drives more than 30% of investments in e-learning7. This indicates that compliance is a main driver for learning and education and will probably strengthen because regulations will probably continue to increase.

There are three main categories of compliance learning:

1. Organization – Imposed training (for example, training employees about internal product standards or

code of business conduct). Students are tracked by attendance or course completion. 2. Operations – Critical training (for example, the personal safety of employees and customers). This does

not include reducing the risks caused by a business disaster. A crisis of that nature falls under the regulatory (see 3) control of the Occupational Safety and Health Administration (OSHA).

3. Regulatory – Regulatory training (for example, training that is specifically required by a government agency or law). Not only does the organization need to comply with the law, it must also train its employees about the specifics of laws and show current documentation that the training requirements are being met.

The business and technology requirements for compliance training can be similar for each category. Usually tracking and reporting, security, and documentation get more complex and rigorous because of organization-imposed or external regulatory compliance. Whether a company or a regulatory agency is mandating what courses employees are required to take, the requirements may be the same. For the purposes of this paper, we focus solely on the regulatory and government-mandated compliance issues. 7 Derived from estimate in 2007 Bersin & Associates report on Automating Compliance Training

http://www.bersin.com/practice/Detail.aspx?id=3558

Organization Imposed

Operations-critical

Types of Compliance Training &

Assessments

Regulatory

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Examples Regulatory mandated training is either implied by laws or by certain agencies, institutes, or associations such as the Federal Aviation Administration, the Securities and Exchange Commission, the Federal Financial Supervisory Authority, Institute of Public Auditors (IDW), or the Food and Drug Administration (FDA). When reviewing this taxonomy, remember that:

Compliance training does not always fit neatly into one of the three categories mentioned previously. Some training may cross categories, depending on the needs of the business itself or the agency governing the regulations.

The requirements are, for the most part, cumulative. This means that the characteristics of the first category may also be applied to those in the second and the third.

Regulatory compliance is the most important requirement because of the possible legal and cost ramifications.

A few examples of agencies and laws that require stringent training requirements: o FDA o OSHA o International Organization for Standardization (ISO) o Sarbanes–Oxley Act of 2002 (a US federal securities law that addresses accounting standards;

enacted after the collapse of the Enron Corporation) o Good Manufacturing Practice (GMP) o Laws requiring equal rights and forbidding sexual harassment in the workplace, such as Germany's

equal treatment law (AGG) o Anti-bribery laws such as Germany's compliance law (WpHG) or the FCPA o Data security laws such as Germany's data-security law (BDSG) or the UK-based Data Protection

Act Compliance Training Target Groups and Topics Both enterprise managers and employees are affected equally by regulatory training requirements. Compliance training and assessments, however, reaches beyond the enterprise; organizations also need to train their extended workforces along their supply chains. Contract or external employees are a common and growing target group. For some companies, this group can be a large one due to the outsourcing trend. In a regulated industry such as oil and gas, external employees also need to undergo regulatory training. For example, before contractors can access production sites, they first need to be trained on health and safety standards; otherwise they cannot legally access the site. Depending on the regulations, different types of partners may also need to be trained and assessed (for example, sales-partners such as dealers or service-partners such as service technicians). Compliance-training topics include broader areas such as sexual harassment and anti-bribery, which affect all target-groups in a company. Topics also include industry-specific laws that apply only to financial, energy, oil and gas, or healthcare businesses and specific job functions.

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3. What Learning and Assessment Technology can Support

Learning Management System (LMS) Technology to support the practices of compliance learning is essential for two reasons. First the administrative effort required to manage compliance learning is high and thus, for efficiency reasons, is best supported by powerful technology. Second, the speed required for information dissemination (the delivery side of learning) as well as for reporting (that is, the production of high-quality, valid, and reliable auditing information that is immediately reproducible upon auditor request) are hardly imaginable without the support of technology. This being said, an LMS that provides a variety of out-of the box functions needed for compliance learning should be seen as a technology of choice. Also, deploying an enterprise-class LMS should be a top priority for any enterprise in a regulated industry. An LMS is the technology of choice for managing key processes in compliance learning. This includes:

• Managing registrations and tracking completions and attendance

• Retaining records about completion and attendance, based on regulations

• Managing resources and logistics for efficient delivery

• Providing e-learning for self-paced learning and enabling blended learning concepts

• Controlling the versions of content, pushing out revised versions for retake by learners, and

reporting which version a learner has been trained on

• Identifying training needs based on job role, location, business unit, and skill level and pushing out

courses accordingly

• Automatically notifying users about necessary courses still open, upcoming skill gaps, or retake

needs

• Providing automatic reassignment of courses to learners to make them retake a course at

predefined intervals

• Enabling progress and completion reporting and exception reporting

• Enabling managers by providing approval functionality and reporting for the business unit

• Providing assessments to demonstrate that competency has been achieved

• Maintaining audit trails(what was changed, when, by whom, previous value, new value and so on)

and electronic records

• Providing electronic signatures

• Certifying their implementation with the respective regulatory agency (for example, FDA CFR Part

11)

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Learning Content and Documentation Authoring Tools

For effective and efficient training on compliance topics, learning content is usually created by using authoring tools. In recent years it has become increasingly popular to use e-learning courses because these are more trackable and also easier to update, faster to roll out, and cheaper to deploy to larger audiences. There are different options for providing employees with learning materials when and where the materials are needed. Content can be shared in several flexible ways, including:

Through learning management systems using content standards such as SCORM and AICC

In highly customizable business processes with documentation and interactive simulations

Linking directly to learning and documentation materials from inside applications where employees work

Providing access through mobile devices to the mobile workforce

Accelerating context-based guidance (pushing and pulling) directly in the application

Requirements for such authoring tools are as follows:

Coverage of different learning methods and outputs – from documentation and handbooks to e-learning and social / mobile learning – is best handled using a single-source approach. Typical standards such as SCORM or AICC need to be supported so that content can also be managed by an LMS

Content lifetime management so that content can be both easily created and updated

Performance management, so that learning and guidance can be integrated into systems and processes used by employees when working

Assessment Management System Assessments are used:

• Before compliance training, to diagnose who needs the training

• During compliance training, to give help direct learning, give feedback to employees and

instructors, and provide retrieval practice

• After compliance training, to confirm competence, knowledge, or skills

• And also independently of compliance training, to check competence, help find problems, and

reduce errors before they happen

An assessment management system allows you to author, deliver, and report on assessments needed for compliance and other purposes, including learning, training, certification, and recruiting. An assessment management system enables:

• Collaborative authoring of online surveys, quizzes, tests, and exams

• Blended, secure online delivery of quizzes, tests, exams and surveys to desktop or mobile devices

• Reporting and analytics for sharing test/assessment results with stakeholders

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A typical LMS includes basic assessment capabilities, suitable for simpler assessment use cases such as course evaluation surveys and quizzes for learning. When you are making decisions about people (whether to promote, hire, fire, or confirm competence for compliance or certification purposes), the more robust functionality of an assessment management system allows you to create more reliable and valid assessments. The most common applications of compliance assessments are:

• Internal exams to check competence for a job role

• Course evaluation surveys (“level 1s” or “smile sheets”) to check employee reaction after training

• Knowledge checks to confirm learning and document understanding; often given immediately

after training (“level 2s”)to inform trainers and trainees whether the employee has understood the

training

• Needs analysis / diagnostic tests to allow testing out, so that competent employees can avoid

wasting time and energy on training where they already know the material

• Job task analysis surveys to identify key tasks, how important they are for a job role, and how

frequently they are performed; to help ensure that tests and assessments are valid measures of

competence

• Formative quizzes during learning to direct further learning and give retrieval practice to improve

learning retention

• Observational assessments to measure practical skills in the workplace – where an observer

watches how an employee performs a task and rates performance against a checklist

Assessment management systems and LMSs work together, and test-takers will often be directed to take assessments by using a single sign-on from the LMS.

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4. Offerings from SAP

How SAP Enterprise Learning and SuccessFactors Learning Manage Compliance Offerings from SAP include two different LMSs, both well-known to support compliance learning and the full compliance-learning business process:

• SAP Learning Solution (on-premise offering)

• SuccessFactors Learning (cloud-based offering)

´

SAP Learning Solution, the on-premise offering The SAP Learning Solution, also known as the SAP Enterprise Learning environment, is comprised of the following components:

Learning portal, the Web-based learner's personalized learning environment

Instructor portal, where instructors can manage the participation in and activities of their courses

Learning management system (LMS) to control learning processes and manage the course offering

Authoring environment to support the creation of tests and structuring of e-learning content

Virtual learning tool powered by Adobe Connect to conduct virtual learning events (SAP Enterprise Learning only)

Content management system (CMS) to store and manage learning content

Synchronous and asynchronous collaboration features ensuring that your people can share best practices throughout the organization. This can be accomplished via integration to Adobe Connect for virtual classroom-based learning or via the SAP Jam site (the social media platform from SAP) for social and informal, community-based learning

Mobile apps for tracking and delivering learning on mobile devices

The SAP Learning Solution provides tight integration with your SAP ERP HCM software implementation – offering back-office functionality for competency management, along with comprehensive assessment functionality for employee performance management. The SAP Learning Solution also features strong analytical capabilities, including support for ad hoc reporting. External learners such as partners or

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customers can be provided with learning and tracked by using the xLSO (option for the extended learning community) solution.

SAP Learning Solution offers convenient functionality to support compliance learning as described earlier in this paper. However, the main differentiator between an LMS enabled by SAP and other, stand-alone LMSs is that the SAP-enabled LMS uses one and the same enterprise-wide database for tracking the personal data as well as the learning data, and the integration is by design and seamless. This ensures consistent data, simple and fast access, and maximum reuse. An advantage of the on-premise offering is that customers can also leverage the adaptability of the software by extending it to exactly meet their customer-specific needs (for example, by adding custom coding to the system at defined extension points). Beyond this, due to the strong consulting and development partner network, dedicated, specialized solutions available for regulated training (like RegLearn from hyperCision http://www.hypercision.com/pages/reglearn-2) can be used seamlessly on top of the LMS. SuccessFactors Learning, the cloud offering SuccessFactors Learning has a proven track record for compliance learning in the market, having been very successful already under the name of its former brand Plateau. The company has more than 10 years of experience in regulated industries, including FDA regulations, which are known to be among the strictest regulations in compliance learning in the world. Since 2011, the former Plateau LMS is part of the SuccessFactors BizX Suite, and since SAP acquired SuccessFactors in 2012, the LMS is now also part of the SAP offering.

SuccessFactors Learning combines formal, social, and extended learning with unmatched content management, reporting, analytics, and mobile abilities. The result is learning that transforms the business and provides verifiable return on investment (ROI).

SuccessFactors Learning consists of the following building blocks: A learning management system (LMS) – to manage learning more efficiently by housing learning activities, including the following, in a single location to reduce costs and improve visibility including:

• Instructor-led training (ILT) • E-learning • Task-oriented OJT • Exams / assessments • Reporting and dashboards

SuccessFactors Social Learning – to blend formal and social for greater ROI and to accelerate performance and increase learning retention by seamlessly using SAP Jam as part of learning processes for:

• Mentoring / development • Concept-oriented OJT • Near real-time knowledge objects from subject matter experts (SMEs) • Collaborative groups and communities

SuccessFactors iContent (Content-as-a-Service) – to reduce costs, increase efficiency, and ensure that e-learning exceeds business results through:

• Content testing and management • Distribution via Akamai Content Distribution Network • Content updates and maintenance

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SuccessFactors Learning also includes SuccessFactors Extended Enterprise with eCommerce to train your partners and customers, mobile learning capabilities and SuccessFactors Learning Analytics to improve compliance reporting. You can use the LMS to track, train, and automate required certification assignments. In detail, SuccessFactors Learning offers functionality such as automated learning assignments based on nearly any criteria, visibility into compliance training status and activities, support for multipart e-signatures, support for FDA 21 CFR Part 11 (validation requirements for the life sciences industry), and task-oriented OJT. It is a unique, validated Software-as-a-Service (SaaS) LMS and also ensures GxP (Good (Anything...) Practice) processes. The validated and stable cloud offering with its service-specific annual upgrade schedule guarantees stability and reliability needed for compliance processes while also enabling the necessary degree of innovation. The validated SaaS option comes with standard (Installation Qualification) IQ reports:

• Standard IQ audit report with each update • Deployment system technical and process documentation • Independent, annual audit for compliance (SOC 1)

While both the on-premise and cloud-based learning solutions come with a built-in test management tool to satisfy basic assessment needs for compliance, many customers see the need for a more capable solution to manage their assessments. In both solutions from SAP, SAP Assessment Management by Questionmark can be conveniently integrated to enable companies to leverage a seamless business process. How SAP Assessment Management by Questionmark Manages Compliance SAP Assessment Management by Questionmark is an intuitive application an organization can use to create valid, reliable, trustable assessments for compliance purposes. Test authors in distributed enterprises can use browser-based authoring tools and a multilingual interface to collaborate and work together to make valid, reliable, and trustworthy assessments. SAP Assessment Management streamlines the authoring lifecycle. With its intuitive interface, you can begin authoring questions and tests in minutes. Authors around the globe can collaborate on content using the software’s secure, browser-based tools and multilingual interface. The software supports more than 20 question formats, such as hotspot, drag-and-drop, ranking, matching, and Likert scale. Standard configuration supports assessment delivery interfaces in more than 30 languages with an option for additional languages. The delivery platform accommodates a broad range of languages, including those requiring right-to-left display. You can organize a repository of test items according to learning objective, curriculum, or competency to speed the authoring process and provide meaningful results. Available font, contrast, and navigation controls can help enhance accessibility of test content for candidates with disabilities. With SAP Assessment Management, you can author assessments once and deliver them securely virtually anywhere – on standard Web browsers for PC and Mac computers as well as iOS and Android mobile devices. With this flexibility, your organization can create new options for using mobile devices to deliver medium- and high-stakes tests and exams in compliance. A responsive design means the software automatically adjusts to the device type. With integrated remote monitoring functionality, you can rate participants based on how well they perform specific tasks or demonstrate specific abilities.

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SAP Assessment Management features a Web-services application programming interface and connector apps for convenient integration with the SAP Enterprise Learning environment, SuccessFactors Learning, and other software. The application supports major industry standards such as SCORM, AICC, HR-XML, and IMS Learning Tools Interoperability (LTI). SAP Assessment Management is available in a cloud edition or on-premise edition and can be used standalone or integrated with either of the LMSs from SAP. How SAP Workforce Performance Builder Manages Compliance

SAP Workforce Performance Builder gives your entire workforce the training and necessary information they need – whenever and wherever they need it – even on their mobile devices. You can easily create and deploy context-sensitive user help, transaction documentation, training simulations, test scripts, and e-learning materials.

So how does it support compliance training? You can use it to create learning content such as e-learning courses and performance simulations, including test and certification programs or small quizzes, to train your target-groups on any compliance topic. This can be flexibly delivered to learners through SAP and third-party LMSs or through the SAP Workforce Performance Builder system alone.

In addition to learning content, it supports the generation of compliant process documentation with high-level automation achieved through audit and compliance macros to help ensure standardization. Each application or process can be automatically documented in just a few steps. If you require your compliant process documentation in various languages, this can also be done very efficiently through automated rerecording and localization functionalities. Because SAP Workforce Performance Builder uses single-source recording, you can directly create multiple output formats such as videos, simulations, handbooks, and additional formats associated with documentation without any additional effort. By directly creating QR-codes, you can provide mobile access to any content created, allowing you to reach each and everyone within the extended workforce.

One more advanced way to support process compliance is through the performance-support feature called “navigator.” Here compliance guidelines, additional information, and recommended values can be transferred and highlighted directly in the context of the respective application, process step, or object. For example:

In application process guidance can help ensure that a process is executed according compliance rules

Updates to compliance regulations can be communicated in the relevant system

Important compliance notes can be automated (for example, in a finance transaction executed with SAP software, debt limits / leverage ratios can be displayed automatically)

The following shows an example of process guidance via the navigator.

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Integration Makes It Stronger When integrated, the LMSs from SAP direct participants to take an assessment within SAP Assessment Management. Summary results are returned to the LMS, and detailed results are stored and made available for reporting within the assessment management system – or can be accessed in external reporting systems such as analytics solutions from SAP and SAP BusinessObjects Business Intelligence solutions. The combination allows a best-of-breed approach – combining learning management with best-in-class assessment management to enable reliable, trustworthy assessments. Content created with SAP Workforce Performance Builder can be integrated with the LMSs using standard methods such as SCORM formats or simple links.

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5. Trends in Compliance Training and Assessments

The following are nine key trends in compliance training and assessments: 1. Increasing interest in predictive or forward-looking measures Many compliance measures (for example, results of internal audits, inspections of what is happening, or training completion rates) are backwards looking. They tell you what happened in the past, but don’t tell you about the problems to come. Companies can see clearly what is in their rear-view mirror, but the picture ahead of them is rainy and unclear. E-learning and assessments are a unique way of touching all your employees. There is huge potential in using analytics based on learning and assessment data. We have the potential to combine Big Data available from valid and reliable learning assessments with data from finance, sales, and HR sources. SAP, with its leading assessment solution SAP Assessment Management by Questionmark and its powerful learning management systems both integrated with its unrivalled analytics solutions based on the SAP HANA® platform, offers world-leading approaches in this area. See the SuccessFactors white paper8: “Learning and Analytics: Business Briefing: Why learning with analytics bridges the gaps in your workforce’s capabilities, improves performance and delivers a quantifiable ROI,” for further insights into learning analytics. See the following screenshot (showing data exported using OData from SAP Assessment Management by Questionmark) that illustrates how performance and assessment results can be correlated using analytics solutions from SAP.

8 This white paper can be downloaded from

https://www.successfactors.com/en_us/resources.html?documentTypes=white_papers

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2. Monitoring employee compliance with policies According to Deloitte’s 2013 Compliance Trends Survey9, the biggest operational issue that chief compliance officers (CCOs) have in managing compliance risks is monitoring employee compliance with policies, with 55% of CCOs raising this as a concern. The next highest concerns were monitoring existing third parties (47%) and workforce training (44%). Typically an organization operationalizes the external rules it has to follow into rules within a company. Technology can be used to present such rules to employees, and particularly to assess their knowledge, understanding, and willingness to apply the rules. You can use compliance exams to check your workforce’s understanding of policies. And you can use observational assessments to determine if people are following policies and procedures and to alert them if they are not. 3. Increasing use of observational assessments We expect growing use of observational assessments to help confirm that employees are following policies and procedures and to help assess practical skills. Observational assessments enable measurement of participants' behaviors, skills, and abilities in ways that traditional assessment can't. In a traditional assessment – for example, a quiz, test, or exam – the participant is presented with questions for direct response. In an observational assessment, an observer is presented with questions to rate participant behaviors, skills, and abilities, such as:

• Performance of a specific task or procedure • Knowledge acquisition and application • Demonstration of skills / abilities

With the increasing use of tablets and other mobile devices, it’s increasingly practical to use a mobile device to assess competence while performing practical tasks – such as customer interviews, operating machinery, and working with patients. 4. Compliance training conducted on mobile devices Mobile Internet use continues to increase globally at rapid rates. According to the ITU10, global mobile broadband penetration will reach 32% by the end of 2014, with this percentage doubled in developed regions like Europe. Use of tablets and other mobile devices is increasing in corporate environments, and it’s becoming critical that compliance training, learning, and assessments be made available on tablets and smartphones, not just on PCs. SAP Learning Solution,

9 See http://www.deloitte.com/assets/Dcom-

UnitedStates/Local%20Assets/Documents/AERS/us_aers_dcrs_final_deloitte_compliance_week_111913.pdf 10

See http://www.itu.int/en/ITU-D/Statistics/Documents/facts/ICTFactsFigures2014-e.pdf

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SuccessFactors Learning, SAP Workforce Performance Builder, and SAP Assessment Management by Questionmark all work well on tablets and smartphones. 5. Informal learning Increasingly, there is an understanding that workplace learning happens through the 70:20:10 model where:

70% comes from on-the-job learning (making mistakes, taking time for retrospectives, and learning

from the experience)

20% comes from learning from others (mentors, conversations with peers, and meetings)

10% comes from studying (reading, researching, and taking courses)

When people are learning informally, it is still vital for regulatory compliance purposes to check that they have the knowledge and skills required to be competent in the job role. Well-managed assessments are and will remain important as informal learning becomes more prevalent. 6. Learning in the extended enterprise Another important trend is the expansion of learning to the extended enterprise, such as contractors or partners. SAP has addressed this need by releasing an SAP Learning Solution option for the extended learning community, to manage external learners. Technically, this is an add-on to the SAP Learning Solution. This add-on has some functionality, such as e-commerce or self-registration, dedicated to external learners. SuccessFactors Learning also provides rich external and e-commerce functionalities to support clients in driving education, compliance, or user adoption across their entire business networks, from supplier to end customer. Therefore, the above functionality, which is important in managing compliance, can also be used for the extended learning community. SAP Learning Solution, SuccessFactors Learning, and SAP Assessment Management by Questionmark all support the external enterprise. 7. Cloud Some corporations prefer to keep compliance training “behind the firewall.” For such organizations, SAP offers SAP Learning Solution and the on-premise edition of SAP Assessment Management by Questionmark. Other corporations see the benefit of using the cloud, and SAP can offer SuccessFactors Learning with the cloud edition of SAP Assessment Management by Questionmark. We see a steady movement towards the cloud and SaaS for compliance learning, training, and assessment – with the huge advantage of delegating all of the IT to an outside party being the strongest compelling factor. Innovations, as well as rollouts to other locations and business units, can be leveraged much faster in cloud environments. Especially for compliance functions, cloud offers a very flexible way to manage learning and assessment without requiring complex integrations or alignments with a company's training departments or related functions. You can achieve cloud deployments easily and quickly. It requires less corporate IT bandwidth and is usually more reliable, more scalable, and more secure. See http://scn.sap.com/community/erp/hcm/blog/2013/05/02/on-demand-or-on-premise-which-is-better-for-hcm for a blog written by one of this paper's authors and offering more information on the pros and cons of using the cloud for HCM.

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8. Changing workforce needs The workforce is constantly changing. The Millennial Generation, or Generation Y, expects different things from previous generations in the way that they use technology and fit into corporate society. Generation Z, who will be entering the workforce over the current decade, are often highly connected, having had a life-long experience with social media and being fully “digital natives.” To meet the needs of such workers, we’re increasingly seeing “gamification” in compliance training to help motivate and connect with employees. And the entire workforce is now accustomed to seeing high-quality user interfaces in consumer Web sites and expects the same in their corporate systems. 9. Big Data Increasingly, we are understanding ways to connect disparate data sources and to analyze large quantities of structured data, unstructured data, and other Big Data. Tools like SAP HANA increase the ability to get meaning out of large quantities of data, and we expect the increasing use of Big Data analytics to provide meaning and value in compliance training and assessment. Imagine the use of analytics (as described previously in trend 1): we can leverage big data to create alerts for compliance officers / managers or do statistical research to avoid future compliance issues. There is huge potential for Big Data in learning, training and assessment for regulatory compliance, and the use of SAP software has potential to be an efficient, safe and reliable “driver” to take us there.

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Appendix – Further Reading

Here is some further reading on the subject of learning and assessments in regulatory compliance. SAP Web sites

Training and Education Community on SAP Community Network: http://scn.sap.com/community/training-and-education

Information on SAP Workforce Performance Builder: http://www.sap.com/training-education/learning-software-svc/learn/solutions/workforce-perform-builder/index.html

Information on SAP Learning Solution / SAP Enterprise Learning: http://www.sap.com/training-education/learning-software-svc/learn/solutions/enterprise/index.html

Information on SuccessFactors Learning: http://www.successfactors.com/en_us/solutions/bizx-suite/talent-solutions/learning.html

Information on SAP Assessment Management by Questionmark: http://www.sap.com/training-education/learning-software-svc/learn/solutions/assessment-authoring/index.html

SuccessFactors white papers: http://www.successfactors.com/en_us/resources.html?documentTypes=white_papers

Questionmark white papers Questionmark white papers are available at www.questionmark.com/whitepapers. Some useful white papers in this area are:

Assessments Through the Learning Process, explaining how you can use assessments to improve the learning and measurements process

The Role of Assessments in Mitigating Risk for Financial Services Organizations, explaining why assessments meet business needs for compliance and offering best practice in using them

Five Steps to Better Tests, explaining how help-learning and measurement professionals create better tests

Responsibilities of a Data Controller When Assessing Knowledge, Skills and Abilities, explaining how to comply with European data protection law when delivering assessments and learning

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Biographies of authors

Thomas Jenewein Thomas Jenewein is in charge of business development at SAP Education for Middle and Eastern Europe. In his previous role as a Product Manager, he was responsible for education software products, and prior to that, he led the SAP internal learning and development team responsible for strategic learning programs and new media. As a thought leader in the area of learning and talent development, he also published several articles, blogs, and a book; and he presents regular at industry conferences. He studied organizational psychology in Mannheim, Germany, and San Diego, California, and is passionate about learning management, new media, knowledge management, coaching, and people development. More information on SAP Education is available at http://www.sap.com/training-education/overview.html.

Simone Buchwald

Simone Buchwald is the Global Solution Principal for Learning and Talent at EPI-USE, an HCM-focused software and services company with more than 1000 employees in 13 countries. She consults with global clients on SAP ERP HCM (focusing on talent management), HCM software from SuccessFactors, and more. Before Simone joined EPI-USE, she was with SAP, working for more than 12 years in the area of HCM. Her main role during this time was to drive the product development for SAP Learning Solution (also known as SAP Enterprise Learning) as a product manager, so she has a long-standing passion and experience in LMS and learning business processes, including compliance. Simone has a degree in Business Administration and a strong background in IT. She is enthusiastic about HCM, talent, and the latest technological trends. More information on EPI-USE is available at http://www.epiuse.com. John Kleeman John Kleeman is the Founder and Chairman of Questionmark. He has a first-class degree from Trinity College, Cambridge, and is a Chartered Engineer. John wrote the first version of the Questionmark assessment software system and then founded Questionmark in 1988 to market, develop, and support it. John has been heavily involved in assessment software development for more than 25 years and has also participated in several standards initiatives. Questionmark provides technologies and services that enable organizations to measure knowledge, skills, and attitudes securely for certification, regulatory compliance, and improved learning outcomes. Questionmark solutions enable reliable, valid, and defensible assessments by empowering subject matter experts through collaborative authoring, accommodating participant needs with blended and multilingual delivery and informing stakeholders through timely reporting and meaningful analytics. More information on Questionmark is available at http://www.questionmark.com.

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Legal note

This document is joint copyright © SAP AG, EPI-USE and Questionmark Computing Limited 2014. Although the authors have used all reasonable care in writing this document, they and the copyright holders make no representations about the suitability of the information contained in this and related documents for any purpose. The document may include technical inaccuracies or typographical errors, and changes may be periodically made to the document or to the software referenced. This document is provided “as is” without warranty of any kind. Company and product names are trademarks of their respective owners. Mention of these companies in this document does not imply any warranty by these companies or approval by them of this guide or its recommendations.