ISACA Journal - 2015 Volume 1

Guest Editorial INDUSTRY LEADERS EXAMINE THE LATEST BUSINESS ISSUES

Using a computer to automate and implement continuous monitoring (CM) in IT has been around for decades. It was adopted early by IT auditors and IT security specialists, and later used to monitor transactions by operations and financial managers. 1 Since the early 1990s, monitoring has been a key component of internal controls systems as defined by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 Consequently, many companies utilize continuous transaction monitoring.

However, there have always been many hurdles to overcome to make it truly effective, including the high cost of software acquisition, getting on the company’s IT platform and the complexity of remediating exceptions within the software itself. These hurdles have made monitoring transactions an uphill battle. 3

“Although many companies have made impressive strides in adopting and deriving value from their initial CM efforts, in general, current usage remains slight relative to its potential.” 4 Reasons cited include the need for capital investment and building the business case for the capital investment.

BIG DATA AND THE CLOUD

The growth of big data has added to the interest in and need for more continuous monitoring to advance business processes. To accompany the growth of big data, and uncomplicated continuous transaction monitoring, a star in the software industry has emerged—the cloud.

The cloud computing system is made up of two “ends,” a front and a back end, usually connected by the Internet. The front end is the side the client sees, and the back end is made up of data servers and storage systems. Together, they comprise the total cloud. Since information and applications are stored in one place, cloud computing eliminates the need to load different software systems onto individual computers and allows for greater access and collaboration between employees and team members.

The cloud-based approach is changing the software industry, with many technology companies moving from enterprise resource planning (ERP) to Software as a Service (SaaS) models. Rather than be defeated by changing times, one company, described below, revolutionized its product offering to remain competitive and expand the use of analytics and monitoring.

Oversight Systems, a technology company in Atlanta, Georgia, USA, had been in business for nine years, and pre-2012, the mainstay of its business was providing continuous transaction monitoring for clients on a daily basis. The software was popular, but installation of the software onsite at a client’s office meant a high purchase price and lengthy sales cycle.

In 2013, Oversight decided to change its entire approach for two reasons. First, after many years, the markets had shifted and most clients found they did not need onsite, daily transaction monitoring. Second, this technology shift meant many clients wanted a lower-cost, lower-maintenance solution. Oversight decided to move to a SaaS model instead, and its latest product, Oversight Insights On Demand, is the result of that shift. Insights on Demand is a web-based application with specific monitoring applications designed to deliver analytics quickly and effectively.

For example, spending managers can use the modules to assist them in making better business decisions. The application still monitors 100 percent of training and education (T&E) and payment card (P-card) data, but delivers the analysis of those data at the desired frequency of the company.

While examples of companies making the switch to the cloud and/or adding SaaS modules are rising, a preeminent example of a leader in the trend is Salesforce.com, now the world’s leading cloud-based customer relationship management (CRM) application. 5 A tangent benefit of the cloud is the expanding breadth

Michael P. Cangemi, CISA (retired), CPA, CGMA, is an author and business advisor, with a significant focus on technology for business and specifically continuous monitoring and analytics for governance, risk and compliance (GRC) and business process improvement. He is the former president, CEO and director of Etienne Aigner Group Inc., and president and CEO of Financial Executives International. He is the president of Cangemi Company LLC, which he founded, and through which he serves as senior advisor and director to various companies and manages his other business interests.