From Compliance Burden to Competitive Edge: How Automation Unlocks Business Value

For decades, compliance has been viewed as a cost center — a necessary overhead that consumes time, people, and resources. With the EU’s Ecodesign for Sustainable Products Regulation (ESPR) now set to reshape the European market, companies face even stricter requirements. Digital Product Passports (DPPs) will soon become mandatory across industries like textiles, batteries, electronics, and construction products.

At first glance, this might look like another layer of complexity. But for those willing to rethink their processes, the shift presents a major opportunity: automation can transform compliance from a burden into a competitive advantage.

The real cost of manual compliance

Many organizations underestimate the financial drag of compliance work. Manual or semi-automated documentation processes typically involve:

Collecting declarations from suppliers by email or spreadsheets
Re-entering data across multiple formats and systems
Preparing certification files and audit trails by hand
Chasing updates whenever regulations change

Research from the National Association of Manufacturers (NAM) highlights just how heavy this cost is: on average, firms spend over €25,000 per employee per year on compliance-related tasks. For small manufacturers, that figure can reach double the per-employee cost of larger companies.

Beyond the cost, there are operational downsides. Skilled staff waste hours on repetitive administrative work. Errors creep into documentation, which then delay certifications and market access. And when regulations evolve — as ESPR will — companies often scramble to adapt, creating bottlenecks at the worst possible time.

Automation as a force multiplier

By digitizing and automating these workflows, companies can flip the script. Protag’s platform extracts, structures, and validates data directly from existing systems, turning raw supplier or production information into compliant Digital Product Passports.

This unlocks multiple layers of value:

Time savings: Tasks that once took days are reduced to minutes. Compliance files can be generated on demand, without endless back-and-forth.
Cost reduction: Lower administrative overhead translates directly into healthier margins, particularly for SMEs.
Risk reduction: Automated checks minimize the chance of missing or incorrect data — reducing exposure to penalties or lost market opportunities.
Faster go-to-market: With documentation ready earlier, new products can enter markets without compliance delays.
Brand trust: Customers, partners, and regulators increasingly demand transparency. Having instant, verifiable product data builds confidence and strengthens relationships.

Beyond compliance: strategic benefits

Perhaps the most overlooked advantage is how compliance automation enables strategic agility. By being ESPR-ready early, companies don’t just meet minimum requirements — they position themselves as leaders in sustainability and transparency.

Imagine a scenario where two firms compete for a major client contract. One struggles to assemble compliance documentation weeks after the request, while the other delivers a complete DPP package instantly. In today’s market, the latter firm gains credibility, trust, and a clear competitive edge.

Turning regulation into strategy

At Protag, we believe that ESPR and the Digital Product Passport shouldn’t be seen as an obstacle. They are an opportunity to streamline processes, cut costs, and build stronger supply chain ecosystems.

By automating compliance, companies can:

Reduce cost pressures and free up resources for innovation.
Respond faster to regulatory or market changes.
Win more business, thanks to better transparency and traceability.

Compliance is no longer just about avoiding risk. Done right, it’s about unlocking efficiency, credibility, and long-term competitiveness.

References

European Commission (2022). Ecodesign for Sustainable Products Regulation (ESPR): Making sustainable products the norm. Available at: https://environment.ec.europa.eu
FasterCapital (2023). Regulatory Compliance Costs for Small and Medium Enterprises. Available at: https://fastercapital.com
National Association of Manufacturers (NAM) (2014). The Cost of Federal Regulation to the U.S. Economy, Manufacturing and Small Business. Washington D.C.: NAM.
New Jersey Business & Industry Association (2014). Regulatory burdens on small manufacturers. Trenton: NJBIA.
Torriti, J. (2010). The Standard Cost Model: A Framework for Estimating Administrative Burdens in the EU. European Journal of Risk Regulation, 1(3), pp. 219–228.