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IT Directions ’06

As a new year begins, Sarbox and governance converge — and new technology takes a holiday.

Research conducted by Deloitte & Touche found that 61 percent of CFOs plan to adopt a “beyond compliance” strategy in which compliance requirements are seen as an opportunity to improve business and gain competitive advantage, while only 17 percent intend to take a compliance-only approach.

Even the severest Sarbox critics concede that bringing their companies into compliance has yielded a number of positives. CFOs responding to the Deloitte & Touche survey listed a number of these, including streamlining operations, optimizing controls and related processes, and improving accountability through the organization. “I think most people would say that gaining a better understanding of their organization’s internal controls has certainly been of benefit,” says Schmidt, who had been CFO at FedEx Express before joining CNL.

Schmidt notes that prior to Sarbox, awareness of how financial processes interface with IT was often sketchy, or, as he says, “too much of a black box.” As the result of compliance efforts, however, a level of understanding has been gained on both sides of the aisle. “You’ll hear, ‘Oh gosh, so that’s what you really need, that’s what you do with what we input [from finance],’” says Schmidt. “‘If that’s the case, here are some different ways we can do things faster, quicker, and smarter.’”

Now that most companies have controls in place and are in compliance, IBM’s Schroeck says the next step is to add BI software to the mix. The logic? Why gather up lots of information merely to satisfy a legal requirement when you can also use it as the basis of better decision-making. “Companies will augment financial information with customer, product, and channel information in an effort to make quicker, better-informed decisions about business developments,” he says. In 2006, expect vendor sales pitches to begin to emphasize this beyond-compliance idea. — Laton McCartney

What Else in ’06?

We polled a number of IT consulting firms and asked what they see as the big issues for 2006. Here are some of the highlights.

While it’s surprising that a mere 2 percent of CFOs responding to our survey want to reduce the number of vendors they deal with, they may understand that the market is simply doing it for them. IDC predicts that IT and telecom mergers will continue unabated, with infrastructure, data/content management, and services particularly ripe for consolidation.

IDC also believes that software-as-a-service will reach a notable tipping point as one or more of the major software vendors (SAP, Microsoft, Oracle) offer next-generation versions of their products in this model.

Outsourcing and offshoring will lose their luster, says Nucleus Research, although the company believes that clients of such services have learned valuable lessons regarding project/ contract management and collaboration, which they will extend through their internal operations.

Service-oriented architectures will gain ground and win over skeptics, says Nucleus, and also give companies a viable way to rebuild patchwork systems and kill legacy applications.

Specialization will become a handicap for IT workers, says Gartner, predicting that the market for IT staffers with expertise in a given technology will decline by 40 percent over the next five years. On the rise are “versatilists,” who understand the business and whose multidisciplinary backgrounds and experience allow them to harness IT to ever-changing business conditions.

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