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.
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