Total compliance spending in 2006 will reach $27.3 billion, with $6 billion or 22% allocated to the Sarbanes-Oxley Act, and spending is expected to climb even higher in 2007 as companies devoting $28 billion to compliance initiatives, according to a new report by AMR Research.
Governance, risk management, and compliance have been a top priority with many business and IT executives during the past few years, largely the result of the introduction and enforcement of the Sarbanes-Oxley Act starting in 2004.
“Spending on Sarbanes-Oxley is only the visible tip of the compliance iceberg,” said John Hagerty, vice president of research at AMR Research. “Any expectation that compliance spending might moderate is just wishful thinking as companies in all industries grapple with increased regulatory concerns and stricter governance and risk policies within their own firms.”
The survey of 325 North American business leaders and IT professionals with more than 10,000 employees also shows that technology is playing an increasingly significant role in the integration of compliance requirements into existing business processes. 75% of companies will leverage compliance to improve business performance with almost $9 billion of the $27.3 billion spent on compliance in 2006 earmarked for technology.
Companies that treat compliance as more than just a necessary budget item are seeing unexpected benefits. Survey respondents ranked the top business benefits of compliance as streamlining business process, 36%; improved quality, 28%; secure information, 14%; supply globalization efforts, 11% and better visibility to operations, 10%.