Risk & Compliance

Somewhere under the Rainbow

More than half of IT vendors and business-service providers say that Sarbanes-Oxley hasn't stimulated significant sales.
CFO StaffMarch 15, 2004

Think you’re relieved that the deadline for compliance with Section 404 of the Sarbanes-Oxley Act of 2002 has been moved back several months? IT vendors are no doubt cheering as well.

In December, IT consulting firm Meta Group Inc. said that its poll of IT vendors and business-service providers found that 57 percent of them were disappointed by or had failed to see any significant sales of their products being driven by Sarbox-compliance concerns. But as evidence that hope springs eternal, fully 97 percent said they think Sarbox compliance will ultimately stimulate sales.

Meta Group analyst Stan Lepeak urged IT vendors that are currently “chasing the Sarbox rainbow” to take the time to develop truly useful products, rather than going to market with “warmed-over IT solutions in a loose Sarbox wrapper.” Software companies are likely to stress that their products make it easier to cope with Sarbox over the long term; that is, they facilitate what Movaris Inc. calls “sustained compliance.”

When PricewaterhouseCoopers LLP surveyed 120 corporate Sarbox project leaders in January, it found that 90 percent of them either had invested in IT as part of their efforts to comply, or planned to do so. Of those, about half viewed IT as “essential” to compliance efforts.

They were nearly unanimous in saying that compliance required more effort than they first anticipated, with one-third citing an increase of about 25 percent, another third putting it in the range of 50 percent, and the final third claiming that compliance was proving to require at least 75 percent more effort than originally estimated. That should prove a useful factoid for the next IT marketing blitz.