With a new President of the United States coming into office, one thing’s for sure: CFOs, controllers, and their companies are going to face more regulation, more scrutiny, and yes, more economic distress.
After all, the US$700 billion Troubled Asset Relief Program isn’t driving recent events on Wall Street. No, the stock sell-off, the downturn in the economy, and the corporate layoffs and belt tightening are being fueled by Wall Street’s anticipation of life under the next administration.
What’s going to happen after January 20, 2009? That’s the question scaring people and driving the job losses. And the answer is, we can expect more legislation and regulation because both candidates and their parties have made it clear they believe a lack of regulatory pressures – to one degree or another – played a role in our current economic decline.
Any law designed to remediate past wrongs or prevent future transgressions is going to have a huge fiscal and functional impact on the way businesses regulate and report on themselves. Given that, companies should consider casting a ballot in another pivotal election, namely, the race to cut their compliance spending.
Internal and regulatory audits can inflate a finance department’s budget by a factor of 10. All to answer auditors’ questions, and address material weaknesses and deficiencies related to ERP, financial management, and other primary business applications. Today, businesses have to cut costs by laying off employees. But in the case of compliance, there’s another way to reduce spending: automate your financial controls, and thereby your compliance reporting, for primary business applications.
Application GRC is a new class of enterprise business software emerging to provide that automation – business-focused, compliance and control systems that complement primary business applications. Pre-configured, off-the-shelf application GRC solutions provide complete visibility into data activity and automate controls to maintain the integrity of critical business information, improve operational efficiencies, and mitigate business and financial risk.
By using application GRC software to perform routine but time-consuming tasks such as auditing ERP data and controls that haven’t changed since the last audit, companies can reassign their people to more constructive, profitable activities. The software can cut costs, save jobs, and confirm compliance. In today’s business environment, that’s a compelling campaign platform and should capture a lot of votes for application GRC.
John H. Capobianco is president and CEO of Lumigent Technologies, Inc., the first to market with automated financial controls for primary business applications to drive down the cost of regulatory compliance. Learn more about Lumigent at http://www.lumigent.com, and contact John at [email protected].
