Analysts point to compliance growth

Analysts point to compliance growth

Local integrators are using regulatory compliance as a market driver for a number of offerings including storage, reporting and document management.

The news follows a global study from IDC analysts that predicted 22 per cent compound annual growth in the IT compliance sector over the next four years. Spending is tipped to exceed $US20 billion by 2009.

The study found companies were making considerable efforts to formalise and automate processes to meet regulatory compliance.

This has placed greater onus on IT departments to audit, monitor and report on processes with resultant opportunities for vendors and their partners, IDC senior research analyst, Julie Rahal Marobella, said.

A thirst for email and storage management, as well as data security, was starting to take a wider hold locally, according to Data#3 CEO, John Grant.

"Corporate governance in the past had been restricted to listed companies only but now large private businesses are spending on it," he said.

"Personal risk is driving the compliance market as senior directors become liable."

Gartner is also predicting further opportunities for the local software sector as more compliance processes are automated.

Vice-president and chief of its Asia research, John Roberts, estimated annual growth of about 40 per cent during the next five years.

"Current Australian regulation is making directors personally liable for the accounts," he said.

"There is nothing like the threat of jail to make people ensure data is truly represented."

Roberts highlighted business pro­cess management tools, rule-based engines and document control as areas of outstanding opportunity for the local integration community.

While Australia was still not regulating to the same degree as the US, he predicted bodies like the Australian Securities and Investments Commission would increasingly demand greater accountability.

To date, opportunities had been particularly prevalent in the government sector, according to Alphawest CEO, Garry Henley.

The company won a 10-year contract worth $82 million late last year as part of a consortium supplying an electronic document management system to the WA government.

Henley expects other states to follow this year but suggested the drivers for these solutions were as much about practicalities as compliance.

"One of the main things driving it is the mass of electronic information that companies are dealing with," he said.

Citing a recent workflow software solution implemented for an insurance company that tracked and disseminated 16,000 documents per month, Henley said improved governance also delivered major customer satisfaction benefits.

Need to know

* Regulatory compliance was a $US7.5 billion global market last year. IDC predicts this will reach $US20.5 billion by 2009.

* While local regulations are not as tight as in the US, integrators are reporting that personal liability of executives is driving compliance into the private sector.

* Gartner predicts process automation will drive annual growth of 40 per cent in the local software sector during the next five years.

* The market analyst firm has highlighted business pro­cess management tools, rule-based engines and document control as areas of outstanding opportunity.

* Compliance should be sold as much on tangible business benefits as it is on risk mitigation.

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