IT investment in corporate governance and compliance could guzzle 10-15% of your budget in 2006, warns market analyst Gartner.
This is a rapid increase from 2004, when typically firms allocated 5% of budget to cope with Sarbanes-Oxley (SOX) and other regulations.
To get full value from their investment, you should centralise your compliance initiatives rather attack each regulatory challenge individually, advises Gartner.
Those that opt for one-off solutions will fork out 10 times more.
Compliance has already diverted spending from other initiatives. “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,” says French Caldwell, research vice president for Gartner.
New spending began to increase in the back half of 2005, as companies recognised that software investment can ease the compliance burden.
Initial SOX spend targeted areas such as consulting, audits, workflow and planning. The newer software investment will provide support in business process management, records management, security and IT ops management.
Gartner’s conclusions are based on interviews with 326 audit, finance and IT professionals in the US and Europe.