India lags in compliance take up, says a MarketShare survey

Bangalore

July 25th, 2007

In India, only 18 percent of the companies have implemented the regulatory
compliance programs compared to 42 percent for Asia Pacific, according to the
APAC CIO survey 2007, conducted by Serena Software.

According to the reports Japan is seen as the leader in regards to current
take-up of regulatory compliance, taking over from Singapore. 56 percent of
Japanese respondents say they have already implemented compliance programs.

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 percent) of
companies agreed that there was business benefits in implementing compliance
initiatives. However, future uptake is promising with 46 percent of India
respondents planning to implement compliance programs by the end of 2008.

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

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 percent report that they currently spend "more than 15
percent" of their total IT budget on compliance-related activities. Outlook
is only slightly better with 26 percent planning to spend "over 15
percent" of their total IT budgets on compliance-related activities over
the next two 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 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 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 percent of
companies indicated that they had already implemented compliance programs - this
has doubled to 42 percent in 2007, according to the survey results.

Singapore is seen as the leader in terms of percentage IT budget spent on
compliance (34 percent of companies spend more than 15 percent of their budget
on compliance). Currently Korea lags the other countries.

The banking and finance industry currently has the highest rate of regulatory
compliance in APAC at 58 percent. The 'telecommunications' (38 percent) and
'information technology' (37 percent) industries have the next highest rate of
compliance take-up. The travel and tourism industry has the best outlook with
regard to future take-up of compliance activities with 56 percent of companies
from this vertical indicating that they will implement compliance programs by
the end of next year.