22 April 2004
Five Questions Directors Should Ask
Five Questions Directors Should Ask:
How the Right Software Can Help Your Company Comply
by Randy Myers
Board members looking at an expenditure on Sarbanes-Oxley compliance software won’t be expected to understand all the nitty-gritty technical details of how the software works. Still, they can make sure the company gets a product that meets its needs. Here are five questions that consultants advise directors to ask a CFO or CIO who wants them to sign off on something that could cost into the millions.
1.Will this solution allow us to meet our first-year filing requirements? “Make sure nothing that’s being proposed will put your first-year certification at risk,” says Lee Dittmar, a Philadelphia-based partner with Big Four accounting firm Deloitte & Touche. “Make sure that the product is proven. You don’t want any development-type project when you’re involved in a bet-the-farm proposition.”
2. How will this software help the board get the information it needs to provide adequate oversight? Is the information the software will give you something that you can’t get in other ways? Says Craig Schiff, founder and CEO of the consulting firm BPM Partners: “Some companies already have good IT systems in place and have been buying business performance-management software even before it was called that. Don’t buy software whose capabilities overlap those of programs you already have.”
3. Will we be able to jump to a better software package if one comes along? “Make sure you buy a program that has a short-term focus for immediate purposes but that can also be adapted to more effective systems over the next five years,” says Anthony Miller, vice president of strategy, product marketing, and professional services at LRN, a Los Angeles consulting firm that is developing comprehensive compliance software.
4. What benefits will the software provide beyond compliance with Sarbanes-Oxley? “Expenditures of this magnitude can seem hefty if they’re just for compliance,” notes Schiff. He says his company’s system will not only help with Sarbanes-Oxley compliance but be of use in running the rest of a business more efficiently too. Producers of similar software make the same claim, arguing that this helps justify the capital expenditure.
5. Is the company we’re choosing going to improve the product down the line? Ask about the manufacturer’s long-term development plans and the improvements it has on the horizon, advises Rocco Tarasi, national director of the consulting firm Resources Connection Inc., which is based in Costa Mesa, California. “This will allow you to evaluate what weaknesses might exist in the product today,” says Tarasi, who works out of his company’s Pittsburgh office. “And while you’re at it, ask if you have to pay extra for those anticipated improvements or if they’re included in the price of your support and maintenance package.”
Posted by Ed at 4/22/2004 07:51:00 PM