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Wednesday, November 24, 2004
Hidden gold in corporate cleanup
Security continues to hold steady over software as the third top IT priority, with organizations busy coping with cyber threats, keeping up with software security updates, and contemplating a plethora of security solutions and methods.
Sarbanes-Oxley may strike dread in the hearts of some IT executives, but not Tracy Austin. Austin, the chief information officer with casino operator Mandalay Resort Group, said the financial reporting regulations act resulted in a 30 percent increase in her information technology budget this year and battle-tested her fairly young IT staff. “I was able to beef up our test and development system budget, as well as our firewall and intrusion detection system budget,” Austin said. “Sarbanes-Oxley opened up the awareness of our (chief) executives and prompted questions about…our business risks. So instead of talking about technology, we were talking about what are our business risks and the technology to address them.”
That’s because the regulations laid down in the Sarbanes-Oxley Act and other laws hold executives’ feet to the fire, making them responsible for signing off on the accuracy of their financial statements. Last week, a key section of Sarbanes-Oxley kicked in, turning up the heat. That push to overhaul systems looks likely to be a boon for security technology providers.
Overall spending on complying with the Sarbanes-Oxley Act is expected to reach $5.5 billion this year, according to a recent survey by AMR Research. That’s more than double the $2.5 billion that was spent last year.
And technology companies are expected to grab nearly a third of the multibillion-dollar spending pie in 2005. Companies are spending more on compliance in general, according to a PricewaterhouseCoopers survey released on Tuesday, which found that about half of U.S. and European businesses expect to increase those budgets by an average of 23 percent during the next year to two.