Women in ICT Awards
Poll Shows 39% of Companies Believe Sarbanes-Oxley Will Make Them More Competitive, According to META Group
- 09 December, 2003 11:16
<p>Poll Shows 39% of Companies Believe Sarbanes-Oxley Will Make Them More Competitive, According to META Group
Many Firms Will Use SOX to Improve Business Efficiency, Going Beyond Compliance Requirements</p>
<p>SYDNEY, Australia. (December 9, 2003) Organisations must look beyond just tactical Sarbanes-Oxley (SOX) compliance and focus strategically on leveraging SOX investments, according to META Group, Inc. (Nasdaq: METG). Most US-based organisations are in various stages of SOX projects as they approach the deadline for compliance to Section 404. META Group has identified six phases a SOX project must be managed through with IT playing a strategic role. The IT organisation needs to be included as a supporter of enterprise internal control projects and must understand the maturity level or stage of the SOX project in order to help.
META Group estimates 10% of SOX-affected firms are at the¡exploration (Level 0) stage. Twenty-five percent of affected firms are at building awareness (Level 1), which is where the enterprise SOX project is being defined and resources are being identified to manage the Section 404 process. The greatest percentage (40%) are at project initiation (Level 2) with their SOX initiatives, which is where the formal enterprise SOX project begins. Twenty percent of firms are at project execution (Level 3) and are actively involved in executing their internal control projects, given the rolling compliance date (through June 2005). Only 5% of firms are at perform assessment/review results (Level 4), working on identifying business processes. Finally, probably very few firms are at optimisation (Level 5), and for most, this will begin after the initial Section 404 compliance date (June 2004 and ongoing).
"Seventy-one percent of companies polled in a recent META Group survey believe they will meet SOX by their required deadlines," said John Van Decker, vice president with META Group's Technology Research Services. "Firms are moving further along the SOX maturity curve and are considering business application projects to address deficiencies in the financial control processes."
Spending on SOX is primarily focused on Section 404, and the auditing and compliance service providers are the initial beneficiaries. Spending for business applications will ramp up in 3Q04 as firms complete their Section 404 projects and address weaknesses, according to META Group. In addition to driving increased business for audit/risk service firms, SOX compliance efforts will prove a boon to IT product and service vendors.
"SOX requires that firms have documented and compliant internal controls around financial management processes," said Van Decker. "SOX has a major impact on IT, including support for business applications and IT governance."
Many firms will utilise SOX as a means of improving business efficiency, going beyond what is merely required to comply. Forty-nine percent of firms polled believe SOX is a necessary cost of doing business, and 39% say SOX will eventually make them more competitive.</p>
<p>About META Group
META Group is a leading provider of information technology research, advisory services, and strategic consulting. Delivering objective and actionable guidance, META Group¡¦s experienced analysts and consultants are trusted advisors to IT and business executives around the world. Our unique collaborative models and dedicated customer service help clients be more efficient, effective, and timely in their use of IT to achieve their business goals. Visit metagroup.com for more details on our high-value approach.</p>
<p>Peter Carr, General Manager