Gartner: More Spending on Compliance, Corp Governance

By | December 15, 2005

According to results from Gartner’s Financial Compliance Management survey, IT financial compliance management and corporate governance will increase to between 10 percent and 15 percent of IT budget in 2006.

“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,” said Tom Eid, research vice president for Gartner.

Preliminary results of more than 300 finance and IT professionals indicate that compliance initiatives, as defined by Sarbanes-Oxley and other regulatory mandates, are diverting a large amount of new IT project discretionary resources to support corporate governance.

“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,” said French Caldwell, research vice president for Gartner. “However, by the second half of 2005, increased interest in IT solutions to ease the burden of compliance has begun to drive new spending.”

Gartner predicts that companies that would choose one-off solutions for each regulatory challenge would 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.

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