Overcoming Resource Constraints with Data-Driven ABC Regulation

For the vast majority of Alcoholic Beverage Control (ABC) agencies operating across North America, growing resource constraints are dominating the discussion in deciding how to best scale services for increased demand while simultaneously improving the effectiveness of regulatory outcomes. Driven by systemic constraints in staffing, process, and technology, today’s alcohol regulators are finding themselves resource challenged in numerous areas:

Resource Constraints

Insufficient Staff

Staffing resources have not kept pace with the increased demand for new regulatory measures in the ABC space, including the ongoing monitoring of Direct-to-Consumer (DTC) sales and the resultant cross-border shipping of alcohol products. Already impacted by the escalating shortfalls seemingly systemic to government hiring (particularly in the areas of IT, data analysis, and regulatory compliance), these cumulative effects mean many agencies are now operating with less staff being asked to do more than ever. This has resulted in increased workloads, employee turnover, longer processing times, and reduced capacity for complex or time-sensitive tasks.

COVID Impacts

Workloads for most agencies have increased following the COVID-19 pandemic due to a variety of factors:

In response to the pandemic, 91% of states surveyed reported that their state expanded the types of allowed sales. Many of these new licensed services have remained in place post pandemic.
93% of states surveyed confirmed that compliance activity was not possible during the pandemic, contributing to a significant backlog that continues to this day.
Some process modifications have continued beyond the pandemic with some agencies closing/discontinuing in-person services, cross-training staff so fewer employees can provide multiple services and deploying staff from home rather than the office. While many of those surveyed have responded that the move to an online service model has increased organizational efficiencies while decreasing costs, the net result for many agencies is still insufficient staffing allocations demanding agencies do more with less.

Geography

For some agencies, the size of their geographic footprint is also a prohibitive factor. For agencies with a handful of inspectors covering a large geographic area, this can lead to increased public safety risks as non-compliant businesses are able to operate undetected for extended periods. For compliant businesses, the inability to complete inspections on a timely basis creates a knock-on effect prolonging processing and approval times for license/permit applications and/or training and education certifications.

Regulatory Inconsistencies

In the US, the 21st Amendment provides much needed flexibility for ABC regulators to adopt laws, rules, and regulations specific to their state culture and context. However, the regulatory complexities and nuances within a jurisdiction can prove challenging for licensees to navigate the provisions and for ABC regulators to apply the laws consistently.

The fair and consistent application of the law can be particularly challenging for regulatory agencies lacking technology solutions that can enable seamless information access and transparency across multiple stakeholder groups. For example, some agencies may collect large amounts of data on alcohol sales, licensing, and compliance, but lack tools to efficiently analyze the data. This makes it difficult for agencies to identify trends, flag potential issues, or make data-driven decisions that can improve regulatory outcomes.

Paper & Process Inefficiencies

In addition to outdated technology and staffing constraints, many regulatory agencies are hampered by outdated processes that are exacerbated by both of these limitations. From time-consuming data entry to paper-based filing systems to mandatory in-person applications, outdated processes compound critical resource constraints in all areas—overburdening staff with inefficient business processes containing inherent errors, duplication of effort, and a lack of scalability to scale for high volume demands.

Underage Drinking

The lack of resources to fully investigate and prohibit underage drinking violations has long been recognized as an under-resourced area of alcohol regulation, especially in comparison to the budgets and resources allocated to prevent illicit drug use. Being forced to rely on a ‘spot check’ approach to ensure compliance with underage drinking preventions is problematic given the growing scope of the problem. Especially in the absence of data-driven tools capable of flagging potential offenders based on both historical compliance records and trending sales patterns, state and provincial regulators are often limited to taking a scattershot approach to a pervasive problem.

Lawsuits Prevention

In the absence of a data-driven technology solution equipped to provide robust regulatory data access and transparency, agencies are faced with the possibility of frivolous and time-consuming lawsuits arising from licensees alleging everything from compliance ‘targeting’ to bad faith conduct and procedural unfairness.

By proactively sharing enforcement data openly and transparently with the public via a public portal to illustrate why investigators may be visiting a particular outlet or why they are there more frequently, regulators help to insulate their agencies against specious lawsuits that are both time consuming and costly to defend.

"93% of states surveyed confirmed that compliance activity was not possible during the pandemic, contributing to a significant backlog that continues to this day."

A Data-Driven Solution Framework

Given the scope and severity of these various resource constraints, ABC agencies are increasingly focusing their efforts on a solution framework that can feasibly solve all of these issues in one fell swoop while simultaneously creating a platform for innovation to address the newly emerging challenges for state and provincial regulators.

The solution framework that is proving most effective is a data-driven and automation-assisted regulatory software system—purpose built for the unique requirements of the alcohol regulatory sector.

Offering a range of features and capabilities, systems such as POSSE ABC equip regulators to overcome the staffing, technology, process, and data accessibility constraints that are currently impeding their operations. This proven solution framework attacks the problem on several fronts:

System Modernization

Providing the immediate capability to streamline regulatory workflows and modernize licensee and stakeholder engagement, a modern ABC software system facilitates remote access and is easily scalable to accommodate growing caseloads, data volumes, and transactions. Cloud-based systems such as POSSE ABC provide advanced cybersecurity features, such as encryption and multi-factor authentication, reducing the risk of cyberattacks whilst protecting sensitive data.

Designed to integrate seamlessly with other systems, both within the agency and across different government stakeholders, the system helps to eliminate data silos and improve information sharing, yielding inherently efficient regulatory processes and outcomes. For example, regulators can use the system to automatically cross-reference data from different sources, such as tax records, business licenses, and compliance reports, to quickly identify potential issues or discrepancies.

Optimized Workflows

Data-driven software solutions alleviate staffing constraints by automating routine tasks and optimizing workflows for error-free processing and timely outcomes. For example, the automated processing of license and permitting applications reduces the need for manual data entry, freeing up staff to focus on more complex or high-priority tasks.

Data analytics and machine learning algorithms can also be used to identify patterns and trends which help regulators to allocate resources more effectively by prioritizing inspections and investigations based on risk.

Equally important, data-driven software systems like POSSE ABC can be leveraged to provide real-time insights and dashboards giving staff a clear understanding of workflows, performance metrics, and regulatory trends. In addition to helping managers to make more informed decisions about staff, workloads, and resource allocations, these modern solutions support WFH initiatives helping agencies to better attract and retain qualified staff through increased work-life balance and flexibility.

Data Usability

Systems like POSSE ABC empower state and provincial alcohol regulatory agencies to better utilize the data they collect, replacing siloed data structures and archaic paper-based systems with accessible digital records—equipped for easy searching, data retrieval, and analysis. By automating data entry and validation, POSSE ABC reduces application errors and approval turnaround times.

Moreover, the system’s data-driven process empowers agencies to analyze data in real-time within a highly intuitive and user-friendly reporting tool designed to generate timely and actionable insights. For example, agencies can use these tools to track trends in alcohol sales, flag compliance issues, and monitor the effectiveness of enforcement efforts—ensuring that regulators are meeting their public safety and business regulation objectives.

Data Transparency

By extending the business intelligence and reporting capabilities of their POSSE ABC system via a public portal for external stakeholders including citizens, licensees, and partner agencies, state and provincial alcohol regulators are equipped for easily achievable wins on several fronts:

Investigators can use the portal to monitor compliance data and identify licensees that warrant immediate attention.
Law enforcement can access data on licensed alcohol establishments in their communities to better inform policing initiatives.
Publicly accessible data supports the work of local coalitions, who can access alcohol compliance checks results to inform their work with local licensees.
Education and Certification firms can reach out to licensees failing to pass compliance checks to offer assistance and support such as responsible beverage server training.
Grant administrators can access information pertinent to retail sales trends for reporting requirements and/or grant proposals.

"The solution framework that is proving most effective is a data-driven and automation-assisted regulatory software system—purpose built for the unique requirements of the alcohol regulatory sector."

In Our Next Installment

These are just a few of the use-case scenarios that are possible for those forward-thinking state and provincial ABC agencies keen to overcome their escalating resource constraints through the implementation of a data-driven software system like POSSE ABC.

In the next part of this series, we’ll examine the key features and functions that you should expect in a fully mature enterprise software system of this nature—including the specific capabilities available out-of-the-box for your internal and external stakeholders as well as your partner agencies.

Finally, and most importantly, we’ll look at the key implementation tasks you should consider to ensure both a successful system launch and the ongoing maximization of your system’s capabilities.