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India Lagging Asia Pacific in Regulatory Compliance Take Up, According to Serena Software Survey

Aug 01 2007

India Lagging Asia Pacific in Regulatory Compliance Take Up, According to Serena Software Survey

Written by Tarachand Wanvari

Thursday, 02 August 2007

Serena Software, Inc. released the results of its 2007 Asia-Pacific (APAC) CIO survey. The survey, conducted for Serena Software by MarketShare, interviewed nearly 350 CIOs from medium and large companies across the APAC region, including 50 from India. The survey measured the understanding of IT and regulatory compliance, levels of compliance-related implementations, and IT spending directed at compliance-related activities.

In India, it was revealed that while more than two-thirds (68%) of companies agreed that there were business benefits in implementing compliance initiatives, only 18% of companies have already implemented compliance programs. The level of compliance program implementations in India is lower than the APAC average of 42%, and lags behind leaders Japan (56%) and Singapore (52%). However, future uptake is promising with 46% of India respondents planning to implement compliance programs by the end of 2008.

It was also revealed that most India CIOs (88%) realize the importance of IT in ensuring regulatory compliance but other senior management did not share the same view. Less than half (44%) of India CIOs feel that upper management support the role of IT for compliance.

Other findings from the survey in India:

    * Only 40% of CIOs in India feel they may be held directly accountable for compliance activities, lower than the APAC average of 67%
    * The two main reasons why India companies feel compliance is important are: (a) "to do business/ trade with foreign companies" (52%); (b) "to increase the company's potential of partnering with foreign companies" (32%)
    * India respondents currently spend a low proportion of their IT budget on compliance-related activities, but spending will increase in the near future. Only 20% report that they currently spend "more than 15%" of their total IT budget on compliance-related activities. Outlook is only slightly better with 26% planning to spend "over 15%" of their total IT budgets on compliance-related activities over the next 2 years.

"Companies in India have been slow in taking up regulatory compliance programs but they are starting to realize the importance of international compliance requirements as it gives them an opportunity to gain a competitive advantage in their market," said Mr. Keshav Prakash, Country Manager for India, Serena Software. "Take-up of compliance programs in India is mainly driven by corporate headquarters demands and global trade requirements. If companies in India want to do business with a Multinational Corporation (MNC) or trade with an overseas company - they have to meet a certain grade of standards. Assurance must be given to customers and partners that they can work at the same level that they do."

For Asia Pacific, the level of compliance implementations in the region has increased significantly over the last twelve months. In 2006, only 21% of companies indicated that they had already implemented compliance programs - this has doubled to 42% in 2007.

The survey also reveals that the main reason for starting up compliance initiatives in APAC is ‘to meet local regulations (current and upcoming)'. Last year, the number one reason was to ‘do business/ trade with foreign companies'. This shows that the local regulatory environment is becoming more apparent to CIOs and this is a major factor for company's looking to implement compliance programs.

"While the take-up of compliance initiatives in Asia has increased, the main drivers have also changed, with local regulations being a major factor. This can be expected with countries such as Japan already creating J-SOX which is set to go into effect next year. Other countries in Asia are following suit and developing their own industry regulations and this will be the main driver of compliance activities in Asia over the next two years," explained Mr KC Yee, Vice President for APAC, Serena Software.

Key APAC survey findings:

    * Japan is seen as the leader in regards to current take-up of regulatory compliance, taking over from Singapore. 56% of Japanese respondents say they have already implemented compliance programs compared to the APAC average of 41%. Singapore is now in second place at 52%.
    * More than two-thirds of APAC CIOs think that they can be held accountable for compliance activities, compared to only 57% last year.
    * Singapore is seen as the leader in terms of percentage IT budget spent on compliance (34% of companies spend more than 15% of their budget on compliance). Currently Korea lags the other countries, (8% of companies spend more than 15% of IT budget on compliance) however, it has the strongest growth prediction over the next 2 years with 42% of companies planning to spend over 15% of their total budget on compliance-related activities.
    * The survey shows that APAC companies are starting to spend a larger proportion of their IT budget on compliance. This year, over 25% of respondents indicated that they spend "more than 15%" of their total IT budget on compliance, compared to only 9% of respondents last year.
    * The ‘banking & finance' industry currently has the highest rate of regulatory compliance in APAC at 58%. The ‘telecommunications' (38%) and ‘information technology' (37%) industries have the next highest rate of compliance take-up. The ‘travel & tourism' industry has the best outlook with regard to future take-up of compliance activities with 56% of companies from this vertical indicating that they will implement compliance programs by the end of next year.

IT applications are used in all aspects of the business, therefore to ensure regulatory compliance, companies need to run and evaluate their application development lifecycle more closely - costs and activities need to be traced and justified. But the application development lifecycle is complex because it is heterogeneous, global, and collaborative, and due to this complexity many non-standard, labor intensive processes exist. This leads to IT building applications that do not meet requirements, are late to market, and are of poor quality.

Serena Software's Application Lifecycle Management (ALM) solutions help manage complexity in application development by automating the entire lifecycle and providing complete visibility into the portfolio of projects. This helps companies meet regulatory compliance requirements and also enables IT to deliver the most business value with their available time, budget, and skills.

"IT is involved in all aspects of the business and therefore plays a major role in ensuring regulatory compliance. As IT develops applications to meet new business requirements, companies can use Serena's Application Lifecycle Management solutions to automate the arduous and costly task of compliance, providing flexible and streamlined capabilities for tracking, controlling, and managing activities," said Mr. Yee.