particular, are threatened on an hourly basis. And just when
things appear to be stable, new requirements, issues, and solu-
tions appear. This increased security comes at a great cost, yet it
often adds little direct value to the customer’s use of the compa-
ny’s product or service.

Compliance Costs Increase

In the United States, the Sarbanes-Oxley Act (SOX) pushed regu-
latory issues onto the front burner for every publicly held compa-
ny. Passed in response to leadership and accounting scandals, the
act requires changes in corporate governance, financial statement
disclosure, executive compensation, and auditor independence.
These new requirements currently consume a significant share of
management attention and emotional energy. A recent study by
the Meta Group puts annual Sarbanes-Oxley compliance costs at
$7.2 million per company, on average.

1

Jon Van Decker, vice pres-

ident with Meta Group says, “What makes SOX different is the
heightened level of security around non-compliance. CIOs [chief
information officers], as well as other officers of a company, can
be liable for inaccurate information or insufficient controls, with
the possibility of fines or prison sentences.”

2

Customer Expectations Accelerate

The power of customers continues to increase in almost every
business transaction. With more choices and more information,
the customer is increasingly in control, and the upward spiral of
customer expectations not only rises, but accelerates. The Internet
has changed the game. Today, purchasing alternatives can be
located globally and accessed instantly. Buyers are smarter, and
they have become resistant to sales calls from people who don’t
do their homework or add value.

Economies Fluctuate

Continuously fluctuating economic conditions make it difficult to
surf waves of expansion. Frequent directional changes in con-

16

Understand