“The survey results clearly demonstrate the extensive business benefits of integrating IT and corporate governance, especially in today’s era of extreme competition and evolving regulatory realities such as Sarbanes-Oxley,” said Robert Courteau, president and managing director of SAP Canada, which sponsored the survey.
“This survey reinforces the strong role that information technology systems play in enabling Canadian companies to sustain and improve their business and, at the same time, meet changing regulatory and stakeholder requirements,” added Joel Martin, vice president, Enterprise Software, IDC Canada. “In addition, companies indicated that integrating corporate governance initiatives with proven IT systems led to key benefits, including greater efficiencies, better productivity, less duplication of effort and cost savings.”
The survey assesses the role IT and enterprise applications play in corporate governance among Canada’s major enterprises. The study revealed that IT is critical for both leading private and public companies to foster good governance practices and to execute their business strategies and meet industry compliance standards. Survey results show that companies that integrate their compliance process with IT systems are less likely to find sustaining corporate governance initiatives a challenge. Of the 100 business leaders surveyed from the Financial Post’s list of the top 800 firms across Canada, nearly 60 percent agreed that sustaining governance initiatives is an ongoing challenge. Of the other 40 percent, all indicated that integrating governance and compliance initiatives into enterprise applications made the difference.
Fully 76 percent of companies surveyed indicated they have compliance processes in place. When asked to specify a single benefit from integrating IT and governance, companies surveyed overwhelmingly indicated greater operational efficiency (57 percent of respondents). Other benefits obtained included increased productivity (14 percent), cost savings (13 percent), greater transparency to shareholders (12 percent) and accelerated implementation of governance processes (9 percent). The survey also reveals that the enterprises face a number of key challenges when dealing with governance issues. They included the cost and time of collecting information (cited by 27 percent of surveyed companies), duplication of work (23 percent), cost of audits (15 percent), employee collaboration (14 percent) and security (nine percent).
Fifty percent of an organization’s governance efforts are spent on finding the right information multiple times. Fortunately, the survey shows a capable IT system that helps automate corporate governance processes also reduces the burden of issues such as duplication. Executives that previously worked on corporate governance have more time for other tasks, noted Martin. “It’s a virtuous circle,” he said. “As companies invest in integrating IT with corporate governance, the more time executives have to innovate and help their companies compete and grow.”
The survey indicates that Canadian corporations are facing multiple governance or regulatory issues including:
- Sarbanes-Oxley and Bill 198 (mentioned by 51 percent of respondents)
- Personal Information Protection and Electronics Documents Act (PIPEDA) (38 percent)
- Workplace Hazardous Materials Information System (34 percent)
- Environmental Act Compliance (18 percent)
- US Patriot Act (11 percent)
“Many of these concerns, such as Sarbanes-Oxley and PIPEDA, are relatively recent corporate governance challenges and the demands they are placing on Canadian companies are helping to drive today’s investment in IT,” said Martin. “In fact, investments in enterprise applications will rise nearly 7 percent in this year, and 22 percent by 2010.”