Wednesday, December 14, 2005

Increased corporate spending for compliance and corporate governance is having a significant impact on IT budgets, according to Gartner, Inc. According to preliminary results from Gartner's 2005 Financial Compliance Management Survey, IT financial compliance management spending will increase to between 10 percent and 15 percent of IT budgets in 2006, up from less than 5 percent 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, who are knowledgeable of compliance practices and efforts within their companies and organizations. Preliminary results indicate that compliance initiatives, as defined by the Sarbanes-Oxley Act (SOX) in the United States and related regulatory mandates in other geographies, are diverting a large amount of new IT project discretionary resources to support corporate governance efforts.

"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."

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