Feeds

Spending on compliance and corporate governance soars

One man's red tape is another man's gravy

Secure remote control for conventional and virtual desktops

Increased corporate spending for compliance and corporate governance is having a significant impact on IT budgets, says Gartner, and financial compliance management spending will swallow 10–15 per cent of IT budgets in 2006, up from less than 5 per cent in 2004.

In October and November 2005, Gartner sponsored a financial compliance management survey of 326 audit, finance and IT professionals in North America and Western Europe. Preliminary results indicate that compliance initiatives, as defined by the Sarbanes-Oxley Act (SOX) in the US and related regulatory mandates in other geographies, are diverting a large amount of new IT project discretionary resources to support corporate governance efforts.

French Caldwell, research vice president for Gartner, said: "Projects that were not aligned with compliance and corporate governance were delayed or cancelled, and SOX efforts inhibited the purchase of large amounts of software related to building new technologies and deploying new projects."

Although software is not required to pass a SOX audit, Gartner analysts said it can help to significantly reduce the compliance burden. The majority of the initial spending for SOX projects was for professional services focused on consulting, audits, process management and workflow, documentation, and planning.

New software that will be purchased for these projects will provide business process management, corporate performance management, information access and decision support, document and records management, security, IT operations management and storage using established systems.

"Companies should look for solutions to support multiple regulations and multiple business units," said Tom Eid, research vice president for Gartner. "Sustainable compliance, that is, a level of effort that is sufficient but not excessive, will only be achieved by consolidating compliance efforts through a programmatic rather than project oriented approach."

Gartner said through 2007, companies that choose one-off solutions for each regulatory challenge they face will spend 10 times more on IT solutions for compliance than their counterparts that take a sustainable programmatic approach.

The pressure of meeting SOX deadlines may have led many CIOs to implement one-off projects and miss opportunities to secure long-term benefits for their businesses. This will, in some cases, mean more budget will be spent to advance these projects in 2008 and 2009.

"IT organizations need to implement IT controls for compliance management without increasing architectural complexity. This requires that IT organizations work hand-in-glove with financial, legal and business operations to manage operational risk," said Eid. "Expanding compliance and operational risk demands offer an opportunity for IT to build long-lasting value for the firm, or face the threat of becoming a scapegoat for operational and legal deficiency."

Copyright © 2005, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Remote control for virtualized desktops

More from The Register

next story
Bladerunner sequel might actually be good. Harrison Ford is in it
Go ahead, you're all clear, kid... Sorry, wrong film
Euro Parliament VOTES to BREAK UP GOOGLE. Er, OK then
It CANNA do it, captain.They DON'T have the POWER!
Musicians sue UK.gov over 'zero pay' copyright fix
Everyone else in Europe compensates us - why can't you?
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Megaupload overlord Kim Dotcom: The US HAS RADICALISED ME!
Now my lawyers have bailed 'cos I'm 'OFFICIALLY' BROKE
Forget Hillary, HP's ex CARLY FIORINA 'wants to be next US Prez'
Former CEO has political ambitions again, according to Washington DC sources
prev story

Whitepapers

Designing and building an open ITOA architecture
Learn about a new IT data taxonomy defined by the four data sources of IT visibility: wire, machine, agent, and synthetic data sets.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
5 critical considerations for enterprise cloud backup
Key considerations when evaluating cloud backup solutions to ensure adequate protection security and availability of enterprise data.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Protecting users from Firesheep and other Sidejacking attacks with SSL
Discussing the vulnerabilities inherent in Wi-Fi networks, and how using TLS/SSL for your entire site will assure security.