The Next Leap in Productivity: What Top Managers Really Need to Know about Information Technology

6.2. The Unexpected Gift of Sarbanes-Oxley

The Sarbanes-Oxley Act of 2002 (SOX) requires all publicly traded companies in the United States to provide extensive financial information to regulatory agencies. Recent rulings by the Securities and Exchange Commission further stipulate that the information be provided in a uniform manner; in fact, the information must be provided in SOA-friendly Extensible Markup Language (XML) format.

People will argue the costs and benefits of SOX for as long as the earth turns, just as they argue over the costs and benefits of taxes. Some people will say SOX is good because it makes it easier for investors to see what is really going on inside a corporation; others will say SOX is bad because it adds unnecessary layers of complexity to corporate operations.

I am here to say that SOX is a boon to the corporations!

The SOX reporting requirement, which may seem onerous or unwarranted or intrusive or whatever bad thing you want to say, is actually a blessing in disguise. Because the only reasonable way to gather and report that information on a regular basis is to have a well-functioning IT group that can produce this kind of information in virtually any format at the drop of a hat.

If your IT group cannot do that, you are in trouble. And you should be grateful to SOX for bringing the problem to your attention.

SOX forces your IT group to become an agent for transparency and to behave transparently. Vast improvements in productivity are virtually at ...