At the Cutting Edge of the Governance Risk and Compliance (GRC) Sector – Leveraging Compliance Data to Drive Business Value

By Nari Ansari and Gal Peleg

Compliance seems to divide enterprises into three categories: those that primarily publicize it as proof of “good governance,” those that actually push the boundaries far enough to bring consequences, and everyone else with their heads down, trying to address whatever regulatory standards govern their industry and the seemingly ever-changing nature of those standards.

Now a fourth group is emerging, charting their own course. These enterprises are turning compliance to their advantage by mining compliance data for digital gold: insights that increase efficiency and competitive advantage. Like the governance crowd, they have automated many compliance functions with emerging software solutions. They are looking at the resulting data with fresh eyes and using it to improve their businesses.

More Regulation…

Most people think of compliance in terms of rules and regulations imposed by lawmakers and other governing bodies, for good reason: there is a proliferation not just of new regulations but of whole new regulatory frameworks such as Dodd-Frank and GDPR. Even long-time frameworks such as SOX, HIPAA, and FCPA continue to evolve. Yet at the same time, many enterprises are setting rules of their own to address an increasingly complex environment that includes global supply chains, cybercrime, trade wars, Brexit, and other evolving risks.

In the end, it doesn’t matter where the rules come from: compliance, and the documentation that comes along with it, is essential for managing risks and maintaining brand reputation. The roster of damaged brands from just the past few years illustrates what can happen when risk and compliance management break down.

Until recently, enterprises managed compliance risks with home-grown, often siloed and disparate initiatives that focused on people and processes. The components included manual record-keeping, time-consuming audits, constant training, ever-lengthier supplier questionnaires, C-level compliance positions, and board-level reporting. The reams of information gathered and presented were considered useful mainly for answering a simple question: Are we compliant or not?

Then a new question arose: Can we at least automate and digitize risk and compliance data, like we have done with so many other processes? The answer to that question is clear: We can, thanks to a growing community of companies providing governance, risk, and compliance (GRC) technology solutions that automate the process of collecting, aggregating, analyzing, and presenting relevant data while reducing their costs to the organization.

…Meets Smarter Compliance

We believe that just as homegrown compliance structures created the opportunity for digitization, a critical mass of companies are now positioned for a new opportunity that may eclipse the earlier one. Data that was once viewed merely as fuel for the compliance machine can now be considered a strategic output in its own right, with value to the business beyond compliance.

Whether it’s a bank mining Know Your Customer data to pitch targeted travel insurance to its customers or a CPG manufacturer analyzing complaint data from the Consumer Financial Protection Bureau to improve its manufacturing methods, we see an opportunity for companies to extract incremental, “offensive” business insight from large risk, compliance, and regulatory data sets.

Why Now?

This opportunity represents a convergence of what may seem unrelated factors. But let’s remember that in a globalized, highly competitive economy there are few trends that arise in isolation.

The first trend we note is a dramatic change in the people sitting in the chief compliance officer (CCO) chair. Russell Reynolds Associates analyzed the career backgrounds of 72 CCOs in banking, insurance and asset management and reported that “gone are the days of principally legal and compliance executives nabbing the top job in the compliance function.” So who’s getting the job instead? According to the report, it’s “broader-focused appointees from consulting, risk and audit. This new breed of appointees would be well-positioned to contextualize compliance (and the associated cultural change) in the wider picture of the organization.” In other words, compliance executive leadership is not just for lawyers and specialists – it’s for multidisciplinary executives who are as fluent with brand value and enterprise risk as they are with the P&L and operations.

The second trend we note is increased use of AI/ML. The transportation sector is a leading example, in part because it is heavily regulated. Shipping companies, notably UPS, now place dozens of monitors on their vehicles for compliance with internal and regulatory rules – and then apply AI to the monitor data to optimize delivery routes and driver behaviors in ways that squeeze out fuel costs and improve customer satisfaction. Fleet operators are further served by solutions from the likes of Keep Truckin, Samsara, and Geotab, which help improve driver safety and increase the precision of preventive maintenance.

The third trend is the evolving consumer privacy landscape. Ironically, more robust data protection and security regulations such as GDPR can actually serve to enhance business value by increasing the trust between companies and their customers. In its January 2018 report, “How GDPR is an Opportunity to Create Business Value”, Gartner notes that “handled effectively, there is great potential to obtain consent to increase data access, use, and sharing rights — aligned with goals of a wider organizational data and analytics strategy. This can help drive competitive advantage, while also helping to achieve compliance in other countries and regions.”

Examples of Leveraging Risk & Compliance Data to Drive Business Value

These are examples of companies that are helping advance the use of risk and compliance data for improving everything from customer experiences to supply chain performance to more effective emergency response:

  • Avetta’s customers use Avetta to certify compliance quality of its suppliers (green flag, yellow flag, red flag) and then mine the data to identify which suppliers are best trained and best equipped for certain on-site jobs.
  • Higher education institutions have long collected data to achieve and maintain external accreditation. Watermark Insights helps universities and colleges not only collect, digitize, and report on that data to demonstrate effectiveness, but also to use it to inform curricular changes and improve student outcomes. 
  • AxiomSL’s financial services clients utilize its data integrity and control platform and its risk calculation and reporting solutions to satisfy regulatory requirements across the globe systematically.  With trusted data, banks are now also able to identify opportunities to fine-tune capital/credit risk and deliver compelling business insights across the enterprise.
  • Global Trade Management solutions from the likes of Descartes and Amber Road (now a part of E2OPEN) have long been used to satisfy mandatory export compliance obligations (e.g. restricted party screenings) and to remain abreast of regional duty programs and tariffs. But by marrying these regulatory datasets with companies’ more “traditional” supply chain data (such as bill of materials and transportation fees), clients are now able to more accurately forecast true landed costs (the total price of the shipment including customs, duties, taxes, tariffs, etc.), all the while minimizing risks and delays.
  • Rave Mobile Safety enables schools to automate collection of and access to critical facility information (e.g., floor plans, alarm information), which they need to remain compliant with fire department ordinances – and it also provide 911 dispatchers and first responders better real-time capabilities when emergencies arise.
  • Information governance and eDiscovery vendor Nuix is well known for its deep technical capabilities in high speed processing and analytics around vast data sets, typically in the context of litigation and investigations.  But enterprise clients are also able to leverage the platform to create “data lakes”, making data more accessible for re-use in future investigations, litigations and data management programs, helping reduce costs.
  • Biopharma companies rely on software from ETQ for much more than compliance with FDA requirements; they also leverage the data to mitigate and prevent high-risk events, scale operations more effectively, and streamline their go-to-market activities.

There are many other examples of organizations across industries utilizing technology from GRC vendors to not only achieve their risk and compliance objectives, but also advance their strategic objectives.  The trend is still very much in its early days, but it provides an exciting avenue for continued growth in the sector.  As an experienced technology focused growth equity firm, TCV is committed to investing in the category innovators in the GRC space and has invested in such companies as Avalara, AxiomSL, Avetta, LegalZoom, Rave Mobile Safety, RiskMetrics Group, and Watermark Insights. 

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The statements, views, and opinions expressed are those of the speakers and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any statements by the speakers and disclaims any responsibility therefor. This interview is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified, if any, are not necessarily representative of all TCV investments and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies. For additional important disclaimers, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.


HireVue to Receive Growth Investment from New Majority Investor The Carlyle Group

SALT LAKE CITY, Sept. 3, 2019 /PRNewswire/ — HireVue, provider of the most comprehensive suite of AI-driven talent assessment and video interviewing solutions, today announced that global investment firm The Carlyle Group (NASDAQ: CG) has signed an agreement to invest in HireVue as its majority investor. Existing shareholders, including TCV, Granite Ventures and Sequoia, together with HireVue management, will remain minority investors.

Over its 15-year history, HireVue has transformed the way companies discover, hire and develop the most diverse set of top talent. HireVue customers, who include over one-third of the Fortune 100, generate strong returns on their investment by reducing the time it takes to hire a candidate by 90 percent on average, and by regularly achieving world-class candidate net promoter scores of more than 70, all while increasing the number of prospective candidates, hiring objectivity and the diversity of hires. HireVue pioneered the video interviewing industry and remains the leader today, delivering a million interviews and over 150,000 pre-hire assessments every 90 days.

“We are delighted to partner with Carlyle to accelerate HireVue’s technology innovation and propel our growth globally,” said Kevin Parker, Chairman and CEO at HireVue. “Carlyle’s culture of ‘performance through collaboration’ makes it our ideal partner as we expand to new markets and enhance our support of enterprise partners around the world.”

“HireVue is the recognized video interviewing and talent assessments leader,” said Patrick McCarter, Managing Director and Co-Head of TMT at The Carlyle Group. “Innovative global enterprises are driving more efficient and effective hiring through HireVue, accessing a broader, more diverse talent pool and significantly reducing bias.”

“We look forward to partnering with Kevin and the entire HireVue team to further accelerate the business and create even greater value for HireVue’s global employees, customers and partners,” said Tyler Parker, Vice President at The Carlyle Group.

“HireVue’s market-leading SaaS platform and suite of recruitment solutions assist global enterprises in finding, engaging and hiring the best talent,” said Nari Ansari, General Partner at TCV. “We are excited about the new partnership with Carlyle and HireVue’s next phase of growth.”

The current executive team at HireVue will continue to lead the company under the direction of Chairman and Chief Executive Officer Kevin Parker.

Equity capital for the investment will come from Carlyle Partners VII, an $18.5 billion fund. The Carlyle team leading the transaction focuses on investments in global technology, media and telecommunications (TMT) companies. TMT is a core area of focus for Carlyle, representing more than $30 billion of invested equity since inception. Goldman Sachs acted as exclusive financial advisor to HireVue.

HireVue’s Solutions

The HireVue Assessment and Video Interviewing Platform combine the power of video, AI, game and technical challenges for comprehensive hiring intelligence. Validated behavioral science is the foundation of HireVue’s highly effective pre-hire assessments, which are rigorously bias-tested according to the EEOC’s Uniform Guidelines and used to support greater diversity and efficiency in hiring. HireVue customers report lower attrition and high return on investment.

In addition, the HireVue Assessment and Video Interviewing Platform is the only platform in its industry that can scale to support the growth of enterprise customers. HireVue has achieved numerous industry and federal certifications, including:

  • ISO/IEC 27001:2013 certification
  • SOC 2 Type 2 assurance
  • FedRAMP authorization

For more information about HireVue or to schedule a demo, visit www.hirevue.com.

About HireVue

HireVue is transforming the way companies discover, hire and develop the best talent by combining the power of video, games and AI for better hiring decisions. The HireVue Assessments and Video Interviewing Platform uses a ground-breaking combination of industrial/organizational science and rigorously tested, predictive artificial intelligence to help customers find and engage higher quality talent, faster. HireVue is available worldwide in over 30 languages and has hosted more than ten million on-demand interviews and one million assessments. Its more than 700 customers worldwide include over one-third of the Fortune 100 and leading brands such as Unilever, Hilton, JP Morgan Chase, Delta Air Lines, Vodafone, Carnival Cruise Line, and Goldman Sachs. For more information, visit www.hirevue.com.

HireVue Social Networks

Twitter:www.twitter.com/HireVue
LinkedIn:www.linkedin.com/company/hirevue 
Facebook:www.facebook.com/HireVue 
YouTube:www.YouTube.com/user/HireVue
Instagram:www.instagram.com/hirevue/

About The Carlyle Group

The Carlyle Group (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across four business segments: Corporate Private Equity, Real Assets, Global Credit and Investment Solutions. With $223 billion of assets under management as of June 30, 2019, Carlyle’s purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. The Carlyle Group employs more than 1,775 people in 33 offices across six continents.


Perceptyx Announces Strategic Investment From TCV

TEMECULA, Calif., Aug. 12, 2019 (GLOBE NEWSWIRE) — Perceptyx, the employee survey and people analytics platform that helps companies transform the way they leverage their people data to drive business success, today announced it has received a significant investment from TCV, one of the largest growth equity firms backing public and private technology companies. The investment and expertise from TCV will help fuel Perceptyx’s rapid growth through product innovations for current and future customers, positioning the company to build upon its market-leading people analytics platform. As part of this investment, Nari Ansari (General Partner, TCV) and Dave Eichler (Vice President, TCV) will join the Perceptyx Board of Directors.

Founded in 2003, Perceptyx provides deep insights into an organization’s people, giving leaders the data and insight they need to improve the employee experience, predict challenges in the business, and drive strategic action to deliver improved business performance.

This is an exciting moment in Perceptyx’s history. For over 16 years we have been on a mission to help people and organizations thrive, and the partnership with TCV is evidence of the value that our customers continue to derive from our platform,” said John Borland, CEO of Perceptyx. “TCV has a history of investing in category-redefining companies, and their partnership reaffirms our culture of innovation, off-the-charts customer retention, and the increasing demand for a more integrated approach to talent analytics in driving business strategy and operations.”  

Advancements in machine learning and the growing volume and availability of business and people data continue to fuel increased demand for deeper talent insights that enable Human Resources (HR) to be more strategic partners to the business. While the global Human Capital Management (HCM) market size is expected to reach US$22.6 billion by the end of 2025 (a 7.6% CAGR), the 2018-2019 Sierra-Cedar HR Systems Survey found that 41% of CHROs plan to increase spending on Talent Analytics in particular, further indicating that the Talent Analytics market is heating up.

Perceptyx’s history of building a best-in-class product as well as their strong customer focus has the team well positioned to capitalize on the enormous and growing opportunity within the HCM space. We are very excited to partner with the Perceptyx team to help them reach their full potential,” said Dave Eichler, Vice President at TCV.

Since TCV’s inception in 1995, the firm has raised over $15 billion across ten funds and invested over $12 billion in leading technology companies. TCV investments include notable franchises such as Netflix, Facebook, Expedia, Spotify, Airbnb, Peloton, Splunk, and Zillow – and they have partnered with leading cloud / SaaS software companies, such as Avalara, ExactTarget, Alarm.com, HireVue, GoDaddy, Twilio, Toast, Webroot, and Xero.

TCV partners with companies we believe are leaders within their market vertical,” said Nari Ansari, General Partner at TCV. “We have been watching Perceptyx closely for quite some time and have been impressed with their consistent growth and amazing track record within the Fortune 1000. We look forward to supporting the team as they embark on their next phase of growth.”

The investment from TCV is particularly significant for Perceptyx in that it represents the first external investment since its founding in 2003. Entirely self-funded and profitable from its inception, Perceptyx has fueled its own growth through a relentless focus on product innovation and client satisfaction, achieving greater than 95% client retention. As the people analytics provider to over 30% of the Fortune 100, experiencing accelerated growth, Perceptyx is poised to further its growth and expansion through the partnership.  

For more information about Perceptyx, visit http://www.perceptyx.com.

About Perceptyx
Since its founding in 2003, Perceptyx has been revolutionizing the employee survey and people analytics industry, delivering enterprise-level employee surveys and people analytics to more than 30% of the Fortune 100. With an unrivaled technology platform and a tailor-made, flexible approach, the Perceptyx technology makes it easy for managers and HR or business leaders to discover insights deep within large and complex organizations, driving meaningful action to improve business outcomes. Driven by a deep intellectual curiosity and culture of innovation, Perceptyx is challenging the status quo – to help people and organizations thrive.

About TCV
Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. TCV has invested over $12 billion in leading technology companies and has helped guide CEOs through more than 120 IPOs and strategic acquisitions. TCV’s software investments include Alarm.com, Altiris, Ariba, Avalara, Avetta, AxiomSL, CCC Information Services, ExactTarget, ETQ, FinancialForce, Genesys, IQMS, OSIsoft, Rapid7, Rave Mobile Safety, Sitecore, SMT, Splunk, Toast, Vectra AI, and more. TCV is headquartered in Menlo Park, California, with offices in New York and London. For more information about TCV, including a complete list of TCV investments, please visit http://www.tcv.com.

SOURCE: Perceptyx, Inc.

Media Contacts:

Perceptyx
Daniel Norwood
Phone: 951.526.2422
dnorwood@perceptyx.com

TCV
Katja Gagen
Phone: 415.690.6689
kgagen@tcv.com


The Rise of Augmented Marketing: Q&A with Michelle Peluso

Michelle Peluso has spent the past two decades helping to forge a new relationship between people and technology. She started her first company, Site59, with a group of friends in 1999 and later sold it to Travelocity, where she served as CEO during the “roaming gnome” era. Peluso became an Executive Advisor to TCV before joining Citibank as Global Consumer Chief Marketing and Internet Officer responsible for the digital experience of the bank’s 100 million global customers. Peluso then took the helm at fashion pioneer Gilt, which she later sold to Hudson’s Bay Company. She became IBM’s first Chief Marketing Officer in 2016 — a move that highlights the transformation of marketing into a core corporate capability.

Still an Executive Advisor to TCV, Peluso remains committed to discovering how marketing can redefine relationships with customers, a transformation that requires curiosity, agility, innovation, persistence, and resilience. In this exclusive interview, Peluso discusses:

  • How the CMO’s role has changed in the last decade
  • Four trends that continue to revolutionize marketing
  • How the rise of ‘augmented marketing’ will challenge CMOs as never before

TCV: It’s widely acknowledged that there has never been a more challenging time to be a CMO. How have you seen the role change since you founded Site59 in 1999?

Peluso: It’s no wonder the average CMO tenure is only 2–3 years and has seen a drop over the past two decades. It’s a hard and incredibly dynamic role, as marketing has shifted from a thoughtful, functional discipline around creatively amplifying the company message to a much more dynamic, real-time, analytical  —  and creative  —  driver of client experience, revenue, and company performance. Expectations have never been higher for marketers, and the new seat they have at the table is an amazing opportunity for the best of them to grow and lead.

TCV: It’s easy to say all these changes have been driven by the rise of the internet. But there are several distinct trends that are reshaping marketing…

Peluso: Clearly four major shifts have shaped, and are shaping, how we can connect with customers, how we can analyze our effectiveness and drive results, and how we need to lead our respective organizations. First was the era of digital. For me, this was the beginning of the internet, making transactions and content interactive, convenient, and more personal. Then, we entered the era of social, which has been all about engagement and authenticity. Social toppled the notion of hierarchy and forced brands to think differently. Third, we have seen the era of mobile, which began with mastering the art of a smaller screen but evolved into much more as the focus has been about location and real-time and always-on engagement. These three eras have dramatically reshaped every industry while elevating the role of the individual, with far-reaching consequences.

TCV: That’s three…

Peluso: Right. We are now on the cusp of the era of cognitive learning, or as we call it at IBM: Augmented Intelligence (AI). We’re building fast and smart systems that understand vast amounts of unstructured information, such as natural language and imagery, recognize data patterns to create recommendations, continuously learn from these recommendations and many other sources of data, such as books, medical records, and conversations with humans and finally, interact with humans in a natural way. AI lets us better understand and engage with our customers; it enables us to make more precise bids on advertising and improve ROI across every dollar spent, and it will fundamentally shift the paradigm of how consumers interact with websites. Arguably, we are already starting to see this with new AI home devices and natural language interaction.

TCV: This new vision will require an entirely new way of doing things, which is a significant change for any company, much less for a massive organization like IBM. How does a CMO drive these kinds of changes within such an established framework?

Peluso: The cognitive change is no different than any other large-scale change management program. To be a cognitive company, you need to be clear about your mission  —  what challenges do you want to solve? What decisions do you most want to improve? You need to have the assets, which are all about your data sets but, even more, your team, marketers, developers, and data scientists. And, of course, you need the right tools. Companies new to AI should identify a handful of specific problems they want to address and apply AI tools to solving those problems. Then, repeat the process to address new challenges. This way, a corporation will see meaningful and measurable results as they evolve into a cognitive company. Patience is required. Companies must learn how to use AI, and these systems also require learning, so “training” the system is critical. It’s a classic crawl, walk, run.

TCV: How does this new approach to marketing change the way you look for and hire the right talent for ‘augmented marketing’?

The traditional marketing waterfall process  —  develop a creative idea, send it to advertising, media, and a CRM team, and then analyze results  —  can no longer keep up with the pace of the market today. I take a lot of inspiration from the Agile movement, which fundamentally reinvented the technology development process. At IBM, we’re applying Agile to our marketing function, and that means creating small empowered teams with the right skills, clear accountability, sprints, and a constant focus on prioritization. When you adopt Agile, you can see how different marketing becomes, and the emphasis it puts on hiring Agile teams that have a strong mix of creative, process, digital, and data science skills.

TCV: What role will marketers have in identifying and developing new technologies for the augmented marketing era? Or will that function remain within the realm of the IT department?

Peluso: AI is about man (or woman) AND machine. Users of all sorts, not just developers or CIOs, can use AI in small and big ways to help them solve the most difficult problems. That’s the promise, and we’re starting to see this at organizations all over the world. Marketers will play a critical role in how AI is developed and applied. One of the many things I learned while working with the TCV team and their companies is that it’s fundamentally important to be insatiably curious about technology because the most successful marketers are as analytically rigorous as they are creative.

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The views and opinions expressed in this Q&A are those of the interviewee and do not necessarily reflect those of TCV or its personnel. Executive Advisors are typically independent consultants who are not employees of TCV but have a strategic relationship with TCV and/or provide valuable advice or services to TCV and/or its portfolio companies. For additional important information regarding this post, please see “Informational Purposes Only” under the Terms of Use section of TCV’s website, available at http://www.tcv.com/terms-of-use/.