StORES Magazine - September 2007 - (Page B7) Budgets for total expensed outside labor and consultants (non-employee, onshore and offshore) are expected to increase 17 percent in 2007. In addition to software development and support and hardware maintenance, retailers plan to increase spending on outsourcing for areas such as security (33 percent), application implementation (23 percent) and business process outsourcing (22 percent). Security continues to be a major concern, especially for credit card and consumer information, and retailers are turning to outside companies for consulting and system surveillance. Retailers are also using consultancies for broad, complex and multi-phase application implementation projects. Bucking the outsourcing trend is the area of web hosting, where retailers are bringing their previously hosted e-commerce applications in house to exercise more control and flexibility in their cross-channel operations and boost visibility into consumer activity. PCI grabs dollars as HIPAA and SOX projects wind down Security and compliance budgets are set to increase 38 percent this year. As deadlines loom, budgets for PCI data security standards jumped to 62 percent of the total security and compliance budget, up from 44 percent in 2006. To ensure consumer privacy, retailers are focusing on regulatory audit and compliance, securing transactions, remediation and intrusion detection. Overall spending for IT security and compliance is expected to double in 2007, accounting for 2 percent of overall IT spending. In addition to PCI, corporate social responsibility, government compliance and green initiatives are contributing to the growth in this area. Budgets for the Health Insurance Portability and Accountability Act (HIPAA) and Sarbanes-Oxley (SOX) projects shrank as retailers successfully completed technology projects that demanded security and compliance attention over the last few years. FIGURE 7: IT work outsourced, onshore and offshore 2006 Application development Application implementation Application management Data center operations Store hardware maintenance and support HQ hardware maintenance and support Security Business process Web hosting WWW.STORES.ORG FIGURE 8: 2007 22% 19 12 18 44 25 6 7 26 Security and compliance budget breakdown 2006 PCI Compliance SOX Customer Privacy HIPAA 44% 38 5 9 2 1 2007 62% 23 8 4 2 2 21% 15 11 17 43 25 5 6 31 C-TPAT Social Compliance STORES / SEPTEMBER 2007 B7 http://WWW.STORES.ORG
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