Corporate Ireland’s current approach to compliance with regulations like Sarbanes-Oxley is unsustainable, independent research commissioned by HP Ireland reveals. One in 10 Irish companies estimate that 70pc of their IT budget is solely compliance related.
The research found that the regulations that Irish business leaders felt most affected them are Sarbanes-Oxley, the new accounting standards IFRS and IAS, health and safety regulations and the Data Protection Act.
Irish companies’ approach to complying with regulations are often process driven rather than results driven, the research found. As a result companies are finding compliance time-consuming and cumbersome to implement.
Most compliance processes in Irish companies are often very manual and labour intensive.
The research found that company directors are often unaware of the potential for IT to integrate and automate compliance procedures.
HP Ireland general manager Martin Murphy (pictured) said the research highlights the need for a streamlined process to help businesses to overcome the burden of regulatory compliance.
He said that while compliance is now a permanent fixture of Irish business life, senior management’s understanding of the role IT can play in compliance remains limited.
“Any companies operating in Ireland with revenues exceeding €25m will have compliance obligations,” Murphy told siliconrepublic.com. “It’s not just for the big guys in corporate life but this impacts SMEs [small and medium-sized enterprises] as well, especially if you are aiming at a global market.
Murphy said that while large corporate firms are spearheading progressive compliance/IT strategies, there is a considerable lack of awareness at an SME level. “Large corporate companies in Ireland are investing heavily in compliance but companies further down the chain see compliance as a burden than something that can actually add value.
“There is no point spending money just to be compliant. That means it becomes an overhead. Compliance should actually be engineered to deliver cost savings for your business as well. A good strategy should be driven by the board and the CEO down.
“That’s where there are IT systems and infrastructures that can help businesses be compliant and enjoy business efficiencies,” Murphy said.
He said he was confident that SMEs would harness compliance/IT strategies to their benefit. “The recent report of the Government-backed Small Business Forum found that 23pc of SMEs in Ireland saw compliance as significant.
“This indicates they are gradually getting the message. There was a fear factor caused by a lack of clarity of what compliance means and move a way from the concept of it being something just for the big guys of Irish business.
“Most companies are now working in an international environment, seeking to expand markets and horizons. Compliance with international regulations is vital. Anything that provokes debate is a good thing,” Murphy concluded.
By John Kennedy