By 1 January 2005, UK public sector bodies were supposed to have completed information infrastructure restructuring projects enabling them to comply with the UK Government's Freedom of Information Act, and private sector companies were required to support the International Financial Reporting Standards (IFRS).
By July, European companies listed in the US must complete similar projects to comply with the US's Sarbanes- Oxley (SOX) legislation, and by 1 January 2006, Europe's banks must be ready to meet phase 1 of the New Basel Capital Accord (Basel II).
Just complying with SOX is expected to cost companies $500,000 for every $1 billion of their revenue. Would this money not be better spent on innovative business systems?
Atle Skjekkeland does not think so. At last month's Information Age Effective IT 2005 Summit, the MD of AIIM Europe said: "Compliance is often seen as a cost issue, but it is also a way of looking at new technologies, a path to innovation." Regulation comes at a price, he concedes, but it has its own rewards: greater business transparency, security and, by dint of the need to invest in new supporting infrastructure, innovation.
Conservative companies might need the impetus of regulation to drive new investment, but can spending on the same mandated processes as your competitors really be called innovation?
Lastminute.com, whose success is founded on the innovative use of IT, clearly has it doubts. The UK company has already delisted from Wall Street rather than meet the cost of SOX compliance.
According to Sir Digby Jones, director general of the Confederation of British Industry (CBI), as many as 60 European companies are set to follow suit.