Can Real Business Value Be Gained from Sarbanes-Oxley? - Page 2

By Marcus Blosch  |  Posted 2004-05-01 Print this article Print

In theory, dealing with these issues should be straightforward: Analyze and document data definitions, values and business rules; then compare and reconcile as necessary. In practice, however, this is a demanding, time-consuming exercise that requires knowledgeable business analysts and programmers. Gartner Research estimates that over 70 percent of the effort spent on a typical data-warehouse project is devoted to data analysis. And where the data is concerned, complying with Sarbanes is not much different.

Have CIOs underestimated the effort required to do all that analysis? There are signs that some CIOs are feeling the kind of pressure that goes with an unexpectedly big job. CIOs also cited "inadequate IT budget" as one of the top four obstacles to compliance—and thats just another way of saying that the problem is bigger than the solution. There are three ways to deal with the situation: Get a bigger budget, exceed the budget (for time, money, or both), or cut the scope of the project down to something that can be done within the budget.

It appears that many CIOs in our survey are choosing the third approach. Almost half said that their enterprises would do the minimum necessary to become compliant. In effect, that means theyll focus primarily on financial data and systems.

the minimum enough? Only if you want minimum returns. In March, Gartners Executive Programs group published a survey of almost 1,000 CIOs worldwide. Respondents cited enabling new products, business intelligence and process improvement as the biggest new IS priorities. Standardized data about customers, products, services and operations are essential to these ambitions. Limiting the Sarbanes-Oxley cleanup effort to financial data may cost CIOs, and those costs may not be very far down the line. Those survey respondents who see Sarbanes-Oxley as a significant business disruption—meaning theyre putting more effort into it—are also most likely to think theyre going to get business benefits. We think theyre right.

In the last decade, businesses have funded big waves of IT spending—on client-server technology, e-business, Y2K, ERP, CRM, and now Sarbanes-Oxley. Its not surprising that many businesses want to spend as little as possible to solve this one. Its probably too late for many CIOs to scope their compliance projects to include information that would really improve their customer- facing business processes. But theyll get another chance, because the need to do so will remain long after compliance deadlines have passed.

Richard Hunter and Marcus Blosch are vice presidents at Gartner Executive Programs.


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