Businesses Split About Outsourcing SOX Compliance

August 16, 2004 ( - Businesses looking to be Sarbanes-Oxley Act (SOX) compliant are split between keeping those functions in-house and outsourcing the labor.

Twenty-one percent of those surveyed indicated that they are more likely to outsource functions as a result of compliance with SOX regulations, while a slightly smaller group (19%) expects to outsource less. Seventeen percent of those polled do not expect compliance to have any effect on outsourced work, while a full quarter (25%) indicated that they had no way of calculating the impact , according to META Group, Inc’s study Organizational Trends in Sarbanes-Oxley and Regulatory Compliance Issues.

Only 55% of respondents surveyed believe that compliance measures will change their use of external business or outsourcing services. Of that group, only 9% characterized the expected changes as “major.”

“Companies must address the fundamental confusion surrounding the impact of compliance on the organization,” said John Van Decker, vice president with META Group’s Enterprise Application Strategies service. “The effects of SOX will be felt across the board, especially within the IT function. Organizations need to understand and prepare for compliance measures that will influence everything from reporting, to auditing, to supply chain management.”

Across job titles, C-suite executives are significantly more likely than line-of-business managers (vice presidents, directors, managers, and business staff) to increase outsourced functions as a result of Sarbanes-Oxley (SOX) compliance efforts.