Don't Waste The Crisis: Predictions For 2009

"You never want a serious crisis to go to waste," said Rahm Emanuel, President-elect Obama's chief of staff, during a recent Wall Street Journal conference. "This crisis provides the opportunity for us to do things that you could not do before."

So it's official: We're in a crisis.

But as Emanuel suggests, in crisis lies opportunity. And in 2009, the opportunities will revolve around regulations and spending. Specifically, more regulations and less spending. IT organizations that look for and act on those opportunities will survive, if not thrive, going forward. Those that see only crisis will need all the luck they can get. Here's what IT — and the rest of us — can expect in the coming year:

IT Vendors Feel the Heat. Spending for standard hardware and software will tighten, as we have seen before when buyers begin to reign in the cost structure for their businesses. In turn, major IT vendors will become more aggressive, putting tremendous pressure on small and mid-sized software companies. Natural selection, which rages throughout industry cyclically, will separate the winners from the losers — those with aggressive marketing and a verifiable ROI, and those without it.

"Hidden" Corporate Taxes on the Rise. According to a recent Newt Gingrich column, the average company pays an estimated $4.36M hidden tax in yearly SOX compliance costs. Expect that number to increase as the 111th Congress considers new regulations to restore the economy and our confidence in corporate America. For companies that must demonstrate their compliance, the new regulations will necessarily impose additional costs — "compliance tax." While some argue this could hamper companies, their competitiveness, and ultimately, the economy, bipartisan consensus favors more accountability, more oversight, and more regulations.

Economic Distress Drives Automation. Economic pressure and greater regulations, higher taxes, and more scrutiny of regulatory reporting mean more auditing and more economic distress. In response, IT will focus on greater automation of business processes previously done by hand, driving ROI to save companies and save jobs — theirs and everyone else's.

Corporations Give Themselves a Tax Cut.The flip side of rising but hidden corporate taxes is the sizable, hidden tax cut corporations will give themselves. Using software that automates regulatory compliance reporting, corporations will respond quickly and accurately to increasing regulations without spending millions. Financial compliance control systems will let corporations have their cake and eat it, too — oversight and accountability without onerous costs — so organizations can focus their energies on satisfying customers, turning profits, and, yes, even spurring the economy.

Compliance Providers Take Center Stage. With increasing regulations expected in 2009, companies offering compliance solutions and services will see increasing demand for their services. The rise of these companies will mirror the rise of a new class of enterprise software to provide compliance automation — application GRC. These business-focused, compliance and control systems will complement primary business applications, performing routine but time-consuming tasks such as auditing ERP data and controls that haven't changed since the last audit. The software will cut costs, save jobs, and confirm compliance, letting companies reassign people to more constructive, profitable activities.

Remember, crisis is a state of mind, a "glass half full vs. half empty" proposition. Keep your eyes — and your readers' and customers' eyes — on the prize, overcoming obstacles in the pursuit of success in 2009.

SOURCE: Lumigent Technologies, Inc.