Application Portfolio and Compliance: Meeting Regulatory Requirements

Ensure your application portfolio meets regulatory and compliance requirements. From data protection to industry standards, learn how to manage compliance across your software landscape.

Compliance in the Application Portfolio Context

Why Portfolio-Level Compliance Matters

Individual application compliance is necessary but insufficient. Regulators and auditors look at how data flows across your entire technology landscape—not just within single applications. A compliant CRM connected to a non-compliant spreadsheet still creates regulatory risk.

Portfolio-Level Compliance Concerns:

Data flowing between compliant and non-compliant systems
Personal data stored in applications not assessed for data protection
Shadow IT handling regulated data without oversight
Third-party vendors processing data without adequate agreements
Audit trails fragmented across multiple systems
Inconsistent access controls across the portfolio

Key Regulatory Frameworks

Data Protection:

Personal Data Protection Bill (PDPB) — India
General Data Protection Regulation (GDPR) — EU/UK
California Consumer Privacy Act (CCPA) — US

Industry-Specific:

ISO 27001 — Information Security Management
ISO 9001 — Quality Management
SOC 2 — Service Organisation Controls
PCI DSS — Payment Card Industry
HIPAA — Healthcare (if applicable)

Financial:

GST compliance and e-invoicing requirements
Companies Act 2013 — Financial reporting
RBI guidelines — For financial services

Compliance Assessment for Applications

Data Classification First

Before assessing compliance, classify the data each application handles:

Tier 1 — Highly Sensitive:

Personal identifiable information (PII)
Financial data (payment cards, bank accounts)
Health records
Employee records
Trade secrets

Tier 2 — Business Sensitive:

Customer transaction data
Internal financial data
Vendor contracts and pricing
Business strategy documents
Product designs and IP

Tier 3 — General Business:

Marketing materials
Public-facing content
General correspondence
Published policies
Publicly available data

Application Compliance Checklist

For each application handling Tier 1 or Tier 2 data:

Data Handling:

[ ] Data processing agreement (DPA) in place with vendor
[ ] Data residency requirements met (where is data stored?)
[ ] Encryption at rest and in transit
[ ] Data retention policies configured
[ ] Data deletion capability (right to erasure)
[ ] Data export capability (data portability)

Access Control:

[ ] Role-based access control implemented
[ ] Multi-factor authentication enabled
[ ] Regular access reviews conducted
[ ] Principle of least privilege applied
[ ] Audit logging of access and changes

Vendor Compliance:

[ ] Vendor holds relevant certifications (SOC 2, ISO 27001)
[ ] Incident response SLA defined
[ ] Breach notification process agreed
[ ] Subprocessor list reviewed
[ ] Regular compliance updates from vendor

Compliance-Driven Portfolio Decisions

Retire Non-Compliant Applications

Applications that cannot meet compliance requirements and have no vendor roadmap for compliance should be prioritised for retirement.

Red Flags:

No encryption for sensitive data
Vendor refuses to sign data processing agreement
Data stored in non-compliant jurisdictions
No audit trail capability
No access control beyond basic login

Consolidate to Reduce Compliance Scope

Fewer applications handling sensitive data means a smaller compliance scope:

Consolidate customer data into the CRM (reduce the number of systems with PII)
Centralise financial data in the ERP (reduce PCI DSS scope)
Use a single document management system for regulated documents
Standardise on SSO to centralise access control

Migrate for Better Compliance

When current applications cannot meet requirements, migrate to alternatives with built-in compliance features:

Cloud platforms with built-in encryption and compliance certifications
SaaS applications with pre-configured data protection settings
Vendors offering compliance management dashboards
Platforms with automated data retention and deletion

Building a Compliance Register

Application Compliance Register Template

| Application | Data Tier | DPA? | Encryption? | MFA? | Certifications | Compliance Score | |-------------|-----------|------|-------------|------|----------------|-----------------| | CRM | Tier 1 | Yes | Yes | Yes | SOC 2 | 5/5 | | HR Tool | Tier 1 | Yes | Yes | No | ISO 27001 | 4/5 | | Spreadsheets | Tier 2 | N/A | No | No | None | 1/5 |

Maintaining the Register

Update quarterly or when applications change
Review after each new regulation or standard update
Include in annual audit preparation
Use as input for portfolio rationalisation decisions
Share with compliance and legal teams

Audit Readiness

Preparing Your Portfolio for Audits

Maintain complete application inventory with data classification
Document all data flows between applications
Keep vendor compliance documentation current
Ensure audit trail access across all regulated applications
Prepare evidence packages for each compliance requirement
Conduct internal pre-audits quarterly

Common Audit Findings to Prevent

Sensitive data in non-assessed applications (shadow IT)
Missing or outdated data processing agreements
Inconsistent access controls across systems
Incomplete audit trails for regulated transactions
Data retained beyond retention periods
Unused accounts with active access to regulated systems

Action Plan

[ ] Classify data handled by each application in your portfolio
[ ] Identify all applications handling Tier 1 data
[ ] Check data processing agreements for all Tier 1 applications
[ ] Assess encryption, MFA, and access controls
[ ] Build an application compliance register
[ ] Flag non-compliant applications for migration or retirement
[ ] Review vendor certifications and compliance documentation

Compliance is not optional—it's a non-negotiable requirement that should actively shape your portfolio strategy. By embedding compliance into your assessment and governance framework, you reduce risk, avoid penalties, and build trust with customers and regulators.