In a recent post, my colleague Sean (aka Desmond) O’Neil addressed the challenge of Identity Management Projects being caught in a “Compliance Project Death Spiral.” It reminded me of the Burton Group Catalyst Conference in May 2005. A panel discussion was addressing the strong opportunities for using Identity Management tools to improve compliance with government regulation. In my naive way, I raised my hand and asked how much money companies were spending to fund these compliance projects instead of funding growth or efficiency initiatives. The response was something like, “Well, the companies are spending money for things they should have been doing all along. It is worth the investment.”

Perhaps that has some truth, but Sean adroitly points out, “By being classified as a compliance project, it [an identity management project] will be looked at by senior management as overhead and a non-revenue generating activity.”

There are really only two sustainable motivations for spending money on IT – to reduce business cost or enable business growth. All other business drivers can usually be grouped under those two headings. Unless a project is firmly linked to those two business expectations, it may flourish for a time, but will eventually dwindle away. It happened for Y2K; it is happening for Sarbanes Oxley.

The trick is to make sure that a project that may have taken root in a compliance budget is also firmly recognized and nurtured as a growth-enabler or cost-reducer. Fortunately, Identity Management can deliver both.

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