Financial regulations offer career opportunities for IT professionals
Forthcoming corporate governance regulations, such as
Basel 2 and Sarbanes-Oxley, will require IT systems to be
integrated across subsidiaries worldwide and data will have to be
verified and cleaned up, as part of multimillion-pound projects
that could make or break careers.
But how can IT staff become involved in this high-profile work?
What extra skills might they need? And what challenges will they
face when working on the projects?
Analysts advise that IT staff should take the lead in preparing
businesses to meet the Sarbanes-Oxley rules and other regulations
on corporate governance.
British businesses with a significant US presence, such as HSBC and
British Airways, are already preparing their IT systems for
compliance deadlines.
Experience from the US shows that businesses are likely to find
thousands of IT-related holes to fill before they can demonstrate
that they meet the US standard for financial reporting, said
Malcolm Marshall, a partner at professional services firm
KPMG.
"To help them comply, it is absolutely critical for their financial
reporting that companies understand how to embed the processes into
the IT organisation," said Marshall.
There will be an effect on both front-office and back-office IT, as
accounting changes will find their way to front-office systems,
which will then have to be modified to be able to feed the data to
modified back-office systems. Such an extensive range of changes
will lead to a great deal of complexity for those involved in the
process.
However, in many cases, IT staff are not being allowed to get
involved in compliance. A survey of 120 senior executives conducted
by the Economist Intelligence Unit found that two-thirds of firms
did not involve their IT departments at a strategic level when
planning for compliance.
The study also warned that a lack of integration in IT systems had
added cost and complexity to compliance programmes among almost
three-quarters of those surveyed - illustrating the need to involve
IT staff at an early stage.
Peter Redshaw, principal financial services analyst at Gartner,
said that as corporate governance legislation would require
organisations to report on an increasingly wide range of business
processes they would need the right staff in place to manage the
vast amounts of historical data that would be created.
IT professionals look set to benefit from the raft of corporate
governance regulations. Compliance projects are driving much of the
new IT investment and helping to nudge up salaries, according to
Ann Swain, chief executive of the Association of Technology
Staffing Companies (Atsco).
IT skills widely used on regulatory projects include SAP,
PeopleSoft, Oracle, Hyperion and Sybase. IT staff who want to work
on compliance projects should specify a preference for risk
management or enterprise resource planning, according to Atsco.
What areas do the new rules affect?
Basel 2
Due to come into force at the start of 2007, Basel 2 is a new
framework for international financial regulation to create more
transparency in businesses' financial activities.
Challenges include linking disparate databases and ensuring accuracy of data.
Sarbanes-Oxley
Sarbanes-Oxley is a US act to encourage greater information
transparency, accuracy, and accelerated reporting. Everything from
financial records to e-mail communications are affected, notably in
relation to management, maintenance and archiving of data.
