Virtual Compliance Reduces Headache of Federal Regulations

Virtual Compliance Reduces Headache of Federal Regulations

Officials at startup company Virtual Compliance Inc. say that unlike many Internet-based businesses, theirs solves a real problem: how to comply with federal regulations.

Virtual Compliance, which launched its first product in 1997, has produced online systems that help companies wade through federal rules for occupational safety and hazardous materials with the click of a mouse. Its patent-pending system could have far-reaching applications in the information technology industry, especially for systems integrators, company officials said.

"We see ourselves as one of the few business-to-business Internet applications that has a real business model and solves a real problem," said David Frankil, chief executive officer of the Arlington, Va.-based company.

When Frankil and co-founder Dr. Win Froelich conceived of Virtual Compliance in 1994, Internet technology wasn't advanced enough to deliver their ideas to the desktop. "We were a little bit ahead of our time," Frankil said.

Nonetheless, the two men began developing prototypes. They got angel financing of $500,000 in April 1998, and in April 2000, $3 million in venture capital allowed them to add management staff with extensive application development and regulatory experience.

Virtual Compliance's products tell users what they have to do to comply after they answer a series of questions online. They don't have to read complicated regulatory language printed in tiny type, although they can access the original documents if they want.

Users get up-dates when regulations change, as well as information about vendors who provide training and other services and products that they may need.

Other compliance software typically helps users manage information that they input after wading through thousands of pages of regulations, Frankil said.

Virtual Compliance has "embedded 20 years of experience into 20 clicks of a mouse," Frankil said. "It's like TurboTax, but for compliance. You tell us what you're doing, we'll tell you what you have to do, and if something ever changes, we'll tell you what you have to do as well."

A series of linked databases makes this possible. The information users provide is linked to the regulations, and sections that apply to their business operations are tagged. The users then get a list of things they must do to comply.

The process saves time, as well as Tylenol.

"It's headache reduction. You'll find very few people outside the legal community who enjoy reading these regulations," Frankil said.

Virtual Compliance's clients are large and small: an eye-care clinic in Ohio, for example, and some of the largest manufacturers in the country. The firm has inked deals to provide its products to members of the National Association of Manufacturers and users of EqualFooting.com.

NAM, based in Washington, represents 14,000 member companies in every industrial sector. EqualFooting.com of Dulles, Va., is an online marketplace for small manufacturing and construction businesses.

"By having access to a database of more than 14,000 action items, members have the option to create personalized to-do lists and ensure they stay in compliance with federal regulations," said NAM spokesman David Walker.

Virtual Compliance officials said their system can be applied to any regulation, and they're considering developing products that would help companies get a grip on rules for workplace ergonomics and information technology accessibility for people with disabilities.

Officials also said their digital expert tools can be applied to almost any business process, and they're discussing the possibilities with several systems integrators.

"We have created tools to create digital experts that will have great use for tech companies that go in and engineer or automate business processes," Frankil said. "Say you're an integrator in telecom. The whole structure of telecom regs is a nightmare to keep track of. An IT integrator could take our tools and apply them to the [Federal Communications Commission] regs."

The tools could also help systems integrators promote their products and services without having their experts in every client meeting, officials said.

"We can codify what's between their [expert's] ears so other employees can go out and expand the reach of that integrator into future revenue opportunities," said Ellen Herbst, vice president of sales and marketing. "They can close more deals because they can use their staff to conduct more of the engagement."

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