Columns

Sarbanes-Oxley hovers over corporate America

• By Michael W. Bucken
• May 1, 2004

Does the government crackdown on corporate malfeasance -- and the corporate governance statutes passed to halt the practice -- mean that IT must create expensive new systems to ensure management plays by the rules? And do publicly held corporations have the financial and IT resources required to meet the needs of these complex regulations? Those are just some of the questions Editor-at-Large Jack Vaughan tackles in this month's Cover Story, "Plugging into SarbOx," which looks at some of the options IT managers have to ensure compliance with the regulations, led by the Sarbanes-Oxley legislation, passed amidst a slew of corporate scandals uncovered with the bursting of the Internet bubble. Well-known scandals like Enron, Tyco and WorldCom have forced Congress to act quickly (and correctly from this seat) to ensure public faith in the public markets, and now those regulations are on the verge of enactment.

Some observers say new processes and software tools will be vital to ensure compliance with the new laws. Suppliers are pushing tools and technologies they say can automate the process, but IT managers need more than tools to make sure the requirements are met. Clearly, Vaughan points out, no software package can ensure that the new standards are met through corporate accounting processes. IT managers must know and document business processes, ensure that there are checks and balances along the way, and analyze the risks of not following the process. In addition, managers must be able to check the status of a transaction at any point in the process in real-time.

Making the SarbOx compliance issue more difficult for IT managers is its moving target date. The SEC continues to extend the deadline as it seeks to ensure widespread compliance is possible. Nonetheless, the regulations aren't going away and IT managers must deal with them quickly.

This issue also features a look at how Walldorf, Germany-based SAP AG, which has grown from a sleepy supplier of mainframe apps to making a place for itself in many enterprise data centers over the past 15 or 20 years, has bet on Web services to keep its place. Freelance writer Peter Bochner looks at how SAP is counting on its recently released NetWeaver services software to open up the long-proprietary SAP platform to developers of all stripes. [see "SAP development strategies: NetWeaver this way comes"]

Experts tell Bochner that SAP's moves so far have been impressive, but the company still has a ways to go to open the technology enough for today's new breed of corporate development managers. We'll keep an eye on their progress.