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."
