Compliance-related technology spending is expected to increase in SA this year, says research firm BMI-TechKnowledge.
The year is also expected to see a knock-on effect as larger organisations busy with compliance activities also start to expect suppliers to be compliant, says BMI-T analyst Astrid Hamilton, who authored BMI-T`s latest Compliance and IT Spend report.
She adds that the amount companies plan to spend on compliance-related activities this year ranges from less than R500 000 to R10 million.
However, the report indicates that many local organisations are unsure of what is expected of them with regard to regulatory compliance.
Neither do they always fully understand the regulations with which they have to comply, or even with which regulations they need to comply.
Hamilton says the increase in spending this year will be driven by legislation and increased pressure on organisations to comply.
The report shows that 34% of respondents expect their compliance budget to increase this year, while 11% expect a decrease in their budgets.
Last year 62.9% of respondents said their expenditure was in line with initial expectations, while 22.9% said spending was higher than anticipated and 11.4% said spending was lower than expected.
Says Hamilton: "The reasons for 2005 compliance spending being higher than anticipated for 23% and lower for 11% is a lack of understanding of compliance regulations and what is expected of companies with regard to compliance, difficulty in calculating the costs of compliance - there is often an IT and a corporate cost component to becoming compliant - and companies not initially taking into account all the regulations they are subject to."
According to the report, the top three technologies companies plan to evaluate this year to support compliance issues are security applications and technologies, document and records management technology and enterprise applications.
Enterprise applications include applications for enterprise resource planning, supply chain management and customer relationship management.
"Companies are viewing technology as a pivotal strategy to managing compliance processes," the report says. "However, evaluation of appropriate technologies is in an early stage."
Hamilton says the total sample size for the report was 182, with respondents being medium and large corporates from a number of different industry sectors, including the financial sector, government, business and legal services, retail and wholesale trade and manufacturing, and others.
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