The proposed Companies Bill is a double-edged sword for the channel, according to analyst firm Butler Group.
Following on from the WorldCom and Enron fall-out, the Companies Bill is the UK equivalent to the US Sarbanes-Oxley Act. It will require firms to provide financial information on request and make all their business processes transparent. A date for the implementation of the Bill has yet to be decided as it is still in its early stages.
Mike Davies, senior research analyst at Butler Group, said although the Bill is good news for channel coffers because firms will have to invest millions in IT to ensure systems are compliant, VARs need to be on their guard.
"Sales processes are taking longer, and that is because IT awareness has increased among businesses. They are less keen to part with their cash than in the past without knowing they are getting value for money," he said.
"Another problem is that everybody seems to be hanging their hat on the compliance bandwagon, and end-users could get fed up and ignore the message completely."
Davies added that because the Bill will have "incremental parts to the legislation" it is a potential source of ongoing revenue for the channel. "However, a VAR must get the installation right, or they could end up losing business and their reputation, and their client may even end up in jail for non-compliance," he said.
Des Lekerman, managing director of VAR Eurodata Systems, said: "Three or four years ago firms were spending money without thinking about it, because it was IT and it was left to the professionals. Now they need assurance they are buying the right solution.
"A lot of UK companies won't take the Bill seriously and will just see it as another expense. The channel will have its work cut out convincing some of them to make that investment."
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