Oracle, SAP and IBM are among the technology vendors launching products and services aimed at helping businesses comply with the U.S. government's Sarbanes-Oxley Act.
Sarbanes-Oxley was established last year in response to high-profile accounting scandals at companies such as Enron. It calls for new corporate disclosure and financial reporting standards. Investing in compliance-related software and services is expected to boost performance of the information technology industry, as companies work to meet the new government regulations. According to AMR Research, companies will spend up to $2.5 billion to comply with Sarbanes-Oxley this year.
On Monday, both Oracle and SAP introduced products that directly address demands on corporate accounting policies Sarbanes-Oxley stipulates. Oracle's software focuses specifically on corporate treasury operations and will be marketed as part of the vendor's financial software package. SAP launched compliance management applications that combine functionality from its business software, along with customer relationship management and human resources applications to help build internal accounting controls.
The revamped Oracle Treasury software promises to create a validation system for corporate payment processing and breaks out individual treasury operations to help enforce separation of financial duties. The applications feature expanded support of FAS 133 and IAS 39, two accounting standards for treasurers; and the package boasts new reporting tools for tracking hedge funds and financial derivatives.
Oracle is including support for foreign currency exchanges and completion of money market transactions in the package. The system aims to help automate responsibilities that are related to purchasing or issuing debt with discounted securities. The vendor believes that taking some of the human element out of these processes will help companies save time and reduce opportunities for errors or fraud. In addition, the software includes reporting tools that are meant to give treasurers real-time access to cash flow information.
The new version of Oracle Treasury, due out sometime during the first quarter of 2004, will also be available from the software maker as an outsourcing service.
SAP's package targets the production of financial statements and promises tight integration with its other enterprise applications, in particular its MySAP Financials software. The product features the Audit Information System (AIS) that's used in MySAP Financials, which gathers information from corporate information systems and documents to help streamline accounting processes.
The SAP software also features a unique "whistle blowing" function that allows employees to send anonymous complaints that regard questionable business practices via a company portal. SAP said the complaint system is also integrated with its MySAP Human Resources tools.
Last week, IBM introduced an e-mail management service in response to Sarbanes-Oxley and new regulations the National Association of Securities Dealers and the U.S. Securities and Exchange Commission established. IBM also unveiled a service for detecting money laundering that's related to the USA Patriot Act, a legislative effort that attempts to thwart terrorist activities.
Oracle, SAP and IBM are far from alone in the compliance software space; storage vendor EMC, tech giant Hewlett-Packard and security software maker Check Point Software have already launched products that are meant to help companies comply with a growing number of new regulations.