Feeds

Spending on compliance and corporate governance soars

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

Choosing a cloud hosting partner with confidence

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.

Protecting users from Firesheep and other Sidejacking attacks with SSL

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
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.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.