Why product compliance is becoming a business priority

Product compliance is becoming more difficult to manage as safety regulations, supply chain due diligence requirements, sustainability requirements, and disclosure mandates continue to expand. Compliance teams must not only demonstrate that products meet current requirements, but also prepare for changing regulations across products, materials, suppliers, and markets.

SAP commissioned independent research firm Verdantix to interview 37 senior product compliance decision-makers at large manufacturing firms across North America, Europe, and APAC.¹ The research examined team structures, priorities, operational challenges, and planned technology investments across quality and compliance, product safety, supply chain compliance, and product sustainability functions.¹

The research shows that compliance teams are dealing with several challenges at once. Compliance teams are being asked to keep up with changing regulations, collect more supplier information, support sustainability-related requirements, and manage growing reporting demands, often while working across fragmented systems and with limited resources.In many organizations, relatively small compliance teams are responsible for managing these growing demands.

Together, these findings point to a common need: making it easier for teams to access and share the information they need. The sections that follow explore the challenges identified in the research and the approaches organizations are taking to address them.

Keeping products and raw materials compliant remains the top priority for product compliance teams. In this study, 68% of respondents ranked it as their most important product compliance priority over the next two years.¹ More than 70% also said that keeping up with regulatory change was among their top three priorities.¹

Product compliance teams are focused on two related goals: meeting current requirements and preparing for new ones. As regulations continue to evolve across products, materials, and markets, teams need to understand what has changed, who is affected, and what actions may be required.

Regulatory change does not only affect compliance teams. It can influence product development, sourcing decisions, supplier relationships, and reporting requirements across the business. As a result, many organizations are looking for better ways to track requirements, understand their impact, and make sure compliance information is available when people need it.

Many organizations still struggle to connect compliance activities with day-to-day business processes. In this study, 73% of respondents said that embedding compliance into logistics processes was a significant challenge.¹ 65% said the same about embedding compliance into R&D.¹

When compliance information is not available where work is happening, issues may not be identified until later. Product teams may need to revisit design decisions, while logistics teams may need to address compliance concerns after products are already moving through the supply chain.

This can create extra work, delays, and unnecessary complexity. Bringing compliance information into product development, sourcing, logistics, and other business processes can help teams identify issues earlier and reduce the need for rework.

This study found that many organizations manage product compliance through a mix of commercial software, in-house tools, and spreadsheets for different compliance activities.¹ As a result, compliance information is often spread across multiple systems rather than managed in one place.

This fragmentation can make it harder for teams to find the information they need and keep it up to date. It can also increase the effort required to coordinate work across different systems and groups.

As compliance requirements continue to grow, fragmented systems can make it more difficult to share information, support reporting, and scale compliance efforts across the business.

This research found that product compliance analytics and reporting is expected to see the strongest growth in investment over the next year. Nearly 20% of respondents expect spending in this area to increase by more than 20%, while another 35% expect an increase of 10% to 19%.¹ Regulatory content management and supplier data management are also seeing strong planned investment as organizations look for better ways to manage growing compliance demands.

Several factors are driving these investments. This study found that firms are grappling with overlapping frameworks that cut across sustainability, supply chain transparency, and product safety. Product compliance spending is being influenced not only by product safety and compliance requirements, but also by ESG regulations, supply chain due diligence requirements, and other sustainability-related obligations. Many of these requirements depend on the same product and supplier information, increasing the need for better visibility, reporting, and data management.

Organizations are also placing greater importance on how product compliance solutions fit into the broader technology landscape. Nearly 90% of respondents rated platform architecture, scalability, and interoperability as either very important or most important when selecting a product compliance software provider.¹ The research also points to growing interest in AI-enabled capabilities. Nearly three-quarters of respondents said automated reporting and analysis is already in use or highly likely to be adopted within the next two years, while strong interest was also reported for AI-assisted document review and supplier outreach.¹

Product compliance is easier to manage when information and processes are connected. Teams need access to product, supplier, and regulatory information where work is happening.

SAP S/4HANA for product complianceis designed to centralize compliance data and support product compliance activities in a single solution. It supports product compliance assessments, dangerous goods management, and compliance document management while connecting compliance information with product and operational data.

The solution also helps bring compliance activities closer to everyday business processes. Compliance checks can be integrated into product development and key business processes such as procurement, sales, and logistics, helping teams identify issues earlier and work from the same information across the business.

By connecting compliance information with business processes, teams can spend less time moving information between systems and more time addressing compliance requirements.

Product compliance is becoming harder to manage as requirements continue to grow. The research suggests that many organizations are investing in better ways to manage information, improve reporting, connect systems, and reduce manual work.

The findings also point to a common goal: bringing information together. Product, supplier, regulatory, and operational data are often spread across different systems and workflows. When teams can work from the same information, it becomes easier to understand requirements, prepare reports, and gain a clearer view of compliance activities.

When information and processes work together, teams spend less time searching for answers, fixing problems, and repeating work. They can focus more on keeping products compliant, supporting the business, and staying prepared as requirements continue to evolve.