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March 14, 2005

Cost of compliance

Amey Stone

Even though a lot of good has come from the new corporate regulation ushered in by the likes of Enron and WorldCom, cleaning up has come at a cost. And, for public companies today, that cost doesn't seem to be declining with time.

Today AMR Research released a new study that predicts companies will spend $80 billion on compliance in the next five years. This year they will spend a collective $15.5 billion, with the average company coughing up $500,000.

At least that money is going to create jobs and increase IT spending, even if it isn't directly contributing to companies' productivity. Tech firms will get about 29% of the funds and 40% will go to internal staffing, the study finds. Expect consulting and software outfits to benefit the most.

The study's author, John Hagerty, says optimistically in the release, "Companies that see the big picture will put these mandates to work for them and use them as a catalyst to improve or even rethink many parts of their organizations." Let's hope so!

05:39 PM


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