FREE DM Review Site Registration!
Sign-up today and access DM Review on the Web!

Your FREE registration entitles you to:
FREE email newsletters

FREE access to all DM Review content

FREE access to web seminars, resource portals, our white paper library and more!

   

Robert Frances Group Predictions for 2006 - Compliance

This is excerpted from the Robert Frances Group Agenda Note "RFG Predictions for 2006, Part 2." For additional information, please visit www.rfgonline.com.

In 2006, firms will increasingly face the challenge of compliance with multiple regulatory mandates. Global organizations will need to focus on local compliance initiatives, such as Bill 198 in Canada and the Japanese version of Sarbanes-Oxley (J-SOX). Additionally, federal government agencies will have an increased focus on the U.S. Office of Management and Budget's (OMB) Management Accountability and Control Circular No. A-123. Regulations will shift from primarily vertical issues to more broadly applied constraints. Enterprises will need to devote more effort to understanding how they are affected by the various initiatives. Successful companies will go after the strictest interpretations possible, after carefully considering the costs associated with compliance.

While the first year of SOX had many enterprises focusing on what was required to demonstrate compliance to their auditors, savvy firms in 2006 will be turning their focus to sustaining compliance and reducing some of the incremental costs incurred in 2004 and 2005. Out of that costly activity, a list of work items was developed that often resulted in future additional revenue opportunities for services vendors. For many, this incremental spending will continue to make the difference between profitability and taking a loss for the fiscal year.

In 2006, many firms will seek to establish a platform-based approach to compliance that provides effective controls, fraud prevention, internal and external communications, and increased visibility and transparency, even in the face of new regulations. Enablers for compliance include enterprise software, professional services firms, and a strong management commitment.

Enterprises that recently updated or started to address processes and technologies will likely have an easier time aligning applications for compliance in 2006. In contrast, enterprises operating on older legacy solutions that have not been recently revisited and/or have long been highly customized will present significant alignment and compliance challenges to their IT and business executives. IT executives seeking to ease future compliance initiatives should therefore strive in 2006 to minimize or eliminate custom development for critical applications.

There will be several popular compliance-related spending targets in 2006. These will include, but not necessarily be limited to:

  • Business intelligence (BI).
  • Business performance management (BPM).
  • Controls monitoring solutions (including business assurance analytics, IT change management, security controls, survey-based risk management).
  • Enterprise content management (ECM) (especially the integrated management of dynamic and static electronic and physical content).
  • Enterprise information integration (EII).
  • Information on demand (IoD).
  • Enterprise resource planning (ERP) configuration update and improvement (especially regarding business services).

In addition, many firms that have implemented intermediate solutions for SOX compliance will purchase enterprise applications that can provide and enable enterprise collaboration. Firms require many emails and faxes to prove compliance, and a collaboration tool makes more sense. A PC-based compliance tool requires too much manual effort to get the survey responses in for SOX 404. Therefore, business services will continue to be a major area of spending for the enterprise and IT, to ensure continuously compliant processes.


This piece is brought to you by the DM Review editorial staff.

For more information on related topics, visit the following channels:



Industry Vendors