Upfront: Decision Support Outweighs Compliance in IT Investments

For the CFOs of some of today's leading companies -- including Cisco Systems, FedEx and Wendy's International Inc. -- a need for better decision support capabilities is the top driver of corporate investment in the finance function.

In a survey conducted by Cap Gemini Ernst & Young, three-quarters of respondents cited gaps in corporate decision support as the basis of their business case for improving finance. Only about half cited Sarbanes-Oxley compliance efforts. While this may seem surprising at first blush, the underlying logic is sound. A compliance focus is indicative of a short-term, quick-fix mentality. Concentrating on world-class decision support capabilities positions a company for long-term profit improvement.

An organization that improves decision support will meet the real-time disclosure requirement under Sarbanes-Oxley as a result of that upgrade. Among the surveyed companies that are capable of reporting material changes to their financial status within 24 hours, 71 percent have improved their management reporting processes or systems (versus 45 percent for survey respondents overall), and 52 percent have improved their forecasting processes or systems.

Sixty-six percent of respondents said that they still require longer than two days to disclose material changes to their financial condition -- a delay that may not be sufficient to meet the real-time disclosure requirement in Section 409 of the Sarbanes-Oxley Act.