Sarbanes-Oxley Compliance To Boost Tech Spending - InformationWeek

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Sarbanes-Oxley Compliance To Boost Tech Spending

Companies will spend more on technology for Sarbox than on personnel so that compliance can "become repeatable," according to a new AMR report.

Sarbanes-Oxley (SOX) requirements will cause companies to increase spending on technology in 2006 while actual headcount numbers dedicated to compliance efforts will decrease slightly, according to a report released Tuesday.

After interviewing more than 300 IT and business leaders, AMR Research concluded that spending to meet the requirements of the federal compliance act will be $6 billion, essentially the same as the $6.1 billion expected to be spent in 2005.

"Budgets [in 2006] allocated to internal headcount are expected to fall by 8 percent while the technology allocation will grow by more than 13 percent in real dollars over 2005 numbers," AMR Research reported.

AMR said it expects headcount/labor totals to come it at $2.3 billion for 2006 while $1.9 billion will be spent on technology, much of it to automate compliance efforts.

"Budgets are shifting from headcount to technology so that compliance can become repeatable," said AMR vice president of research John Hagerty in a statement. "These spending predictions support a long-term approach to SOX compliance."

The survey revealed that 40 percent of companies specify a budget for SOX with the remaining percentage funding their compliance effort from existing operations.

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