Though compliance is an imperative, the processes and practices used to enable it can provide a wide range of additional benefits for organisations. Michael Lindner, VP EMEA at Serena technologies, takes a look at meeting the challenges of ongoing regulatory compliance.

Compliance has become a boardroom issue for almost all businesses. The auditing scandals of 2000 and 2001 in the US, and their knock-on effects across the globe, have served as a catalyst for increased business transparency and accountability. As a result a raft of acts and legislative regimes has been introduced all over the world to ensure companies protect the interests of their stakeholders, partners and customers.

Most regulatory legislation, such as the Sarbanes-Oxley Act and similar controls in Europe, now demands that senior executives guarantee the accuracy of all financial reporting. In addition companies are required to have - and demonstrate that they have - increased control over their software applications and associated assets. All transactions and business activities must now be fully auditable, requiring a much higher level of visibility across the organisation.

However the complexity of the IT systems that govern today's business processes inhibit this. Often developed internally to fulfil specific needs, and operating as stand-alone applications across a range of platforms, these systems make it difficult to achieve the levels of visibility required for regulatory compliance.

Many organisations for example are undergoing complex mergers and acquisitions or restructurings, requiring the integration of disparate, undocumented IT systems and business processes. Such complexity exponentially increases the risk of severe penalties such as fines - and even prison sentences for senior executives.

With organisations needing to ensure that all changes to business processes and software applications are implemented with the relevant legislation in mind, ongoing changes to IT infrastructure must be continually tracked and tested to ensure they continue to conform to legislative requirements.

The quest for accountability

Worldwide there is a marked trend towards greater accountability, even where no formal legislative controls exist today. This is putting increasing pressure on companies to document their business processes and activities more effectively. It is also driving increasingly transparent financial reporting and new measures to protect investors.

In nearly every case senior executives are now directly responsible for the accuracy of their company's financial reporting. Stiff penalties await those who fail to comply with legislative controls.

However the risk of punishment at the hands of regulators and irreversible damage to brand value should not be the sole drivers for compliance. Already the commercial advantages of new legislation have made themselves felt, as the acts that ensure transparent business operations have begun to restore investor confidence and enhance the market value of organisations all over the world.

Organisations face a number of key challenges in the quest for compliance. Many for example are undergoing complex mergers and acquisitions or restructurings, requiring the integration of disparate, undocumented IT systems and business processes. Others depend on intricate heterogeneous IT infrastructures to drive their activities and need to provide greater insight to their IT environments.

In each case technologies that document, monitor and control every element of the business are of critical importance.

Meeting compliance challenges

In general terms regulatory legislation aims to establish best practice for transparent, accountable business activities. In doing so it determines who should have access to financial and customer data. It ensures the security of applications and business processes, and stipulates how changes to IT systems and processes must be controlled and documented. Finally legislation commonly requires companies to provide clear audit trails for all business activities.

Many companies, and all large organisations, support their business processes with a range of complex IT applications. As a result legislation demands that existing infrastructure supports efficient data management and protection, auditing and financial reporting. In addition all new IT development projects must be undertaken with the demands of relevant legislation in mind from day one.

To ensure compliance on an ongoing basis companies need a way to monitor their existing IT functions and a standard, repeatable process for developing new, fully-compliant applications and changing existing ones. In addition all changes to business processes, application functionality and IT infrastructure must be comprehensively documented and shown to be compliant.

But achieving these goals can be a daunting task in today's diverse IT environments. Often organisations work with a range of complex proprietary applications that run on disparate platforms. Furthermore stand-alone systems are often in place to manage specific business processes. This makes it difficult to take a holistic view of business activities and creates a real barrier to achieving compliance on an ongoing basis.

By investing in new technologies that document, track and manage application development and IT operations in a fully integrated way, organisations can achieve greater visibility across their business processes. In doing so they can also, crucially, create audit trails that improve accountability and demonstrate compliance.

The wider benefits of compliance

Though compliance is an imperative, many organisations discover that the processes and practices used to enable compliance provide a wide range of additional benefits. For instance through compliance organisations can improve management control and gain insight supporting the decision-making process across all operational areas.

It can also provide an ideal basis for true IT governance, reducing administration costs across the enterprise and supporting business best practice in the long-term.

Importantly the changes to business practice required to achieve compliance can also be used to streamline IT processes, such as requirements management and change management - for example supporting the adoption of a standard, repeatable approach to software development that can reduce costs significantly.

Consistent, repeatable processes enable organisations to create and maintain applications more quickly and easily, without risking non-compliance at any stage. Furthermore there are likely to be fewer errors, leading to reduced downtime and reduced negative impact on operations.

The bottom line is to put the right technology in place and compliance need not be the headache you may think it is today. It can enable companies to ensure compliance by capturing, automating, tracking and auditing all changes to key business processes and IT infrastructure.

The right functionality will allow companies to integrate compliance requirements into their normal business operations, enhancing transparency and auditability. It will also keep projects on track, improve collaboration and teamwork, and keep everyone fully informed. This not only ensures that companies remain compliant in the long-term but also improves the quality and productivity of the IT organisation in particular and the company in general.

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