Classify compliance categories

When preparing for the Project Management Professional (PMP) exam, it’s crucial to understand the various compliance categories, their meanings, and their significance. It helps in understanding the project’s complexity and recognizing all aspects required to ensure it aligns with regulatory requirements. Compliance can be classified into four primary categories in project management: statutory, regulatory, contractual, and internal. Let’s delve into the details of each category.

1. Statutory Compliance:

Statutory compliance encompasses laws set by the legislative bodies that must be obeyed by the organization and project managers. For example, adherence to the Americans with Disabilities Act (ADA) means ensuring that projects do not discriminate against individuals with disabilities. Failure to comply with statutory regulations can result in severe penalties, fines, and can severely impact the project timeline and budget.

2. Regulatory Compliance:

Regulatory compliance refers to the organization’s obligation to comply with the rules and regulations set by industry-specific regulatory bodies. For instance, a project inside a healthcare organization must comply with Health Insurance Portability and Accountability Act (HIPAA) regulations, while banking projects have to follow regulations set by the Banking Regulatory Authority. Compliance with the established regulations is not optional, and non-compliance can have devastating impacts, ranging from fines to authority-imposed sanctions that could halt the project altogether.

3. Contractual Compliance:

Contractual compliance refers to adhering to the terms and conditions agreed upon in a contract. Consistent regular audits are required to ensure that all the requirements are being met. For instance, if there’s a statement in your project’s contract requiring weekly reports to the client, not doing so would be a breach of contractual compliance. Other examples could be missing the agreed deadlines, going over the budget, or not satisfying the desired quality standards. Not complying with the contractual obligations can result in financial losses, reputational damage, or contract termination.

4. Internal Compliance:

Internal compliance refers to adherence to the company’s internal policies and procedures. These regulations ensure consistent operations within the organization. Application of Project Management Office (PMO) methodology, policies about project document retention, and regular project status reporting are examples of internal compliance activities. Failure here does not carry legal implications but can affect the project’s success and integrity.

Conclusion

In conclusion, compliance regulations are a critical part of project management. Non-compliance in any of these categories can have significant consequences for the project and the organization. It is critical, therefore, that a Project Management Professional (PMP) understands these various compliance categories and their potential impacts on project progress, success, and completion. To ensure adherence, project managers must plan, check, act, and review these requirements in a cyclical manner throughout the project lifecycle.

Examining these categories, it’s clear that compliance is a responsibility that a project manager carries, and it’s necessary to give each category of compliance the attention and priority it requires. Consider these aspects as foundational knowledge for the PMP exam.