IDC 2012 Canadian BI Maturity Survey Results – Red Hot Alarm!

August 9, 2012

Just reviewed some of the results of an IDC and Ideaca survey of Canadian BI Maturity conducted earlier this year.

The survey’s results are a red hot alarm bell that should be a prompt for many Canadian companies to start thinking more seriously about business intelligence and analytics.  It should also be a wake up call for the federal government because this is a national issue of competitiveness, productivity and innovation.

The summary report is called IDC Executive Brief – The Current Reality of Analytics in Large Canadian Enterprises: IDC Canada Maturity Model.

This is who the the report says the survey was given to:

In the spring of 2012, IDC surveyed 100 business and 100 IT leaders from Canadian firms with $100 million or more in revenue. IDC spoke with director, VP, and C-level executives to better understand how businesses were integrating analytics into their competitive strategies.

During the presentation of the results that I attended in Calgary, a question from the audience was “is that 200 separate companies or was survey given to more than one person in any company?”  The presenter wasn’t 100% certain but believed it that only one person per company was given the survey.  So for now, assume it was a survey of 200 Canadian firms.

However, if that is the case, you may be thinking like me, how responses could differ, potentially wildly, depending on whether it is given by a IT or business person.  I would like to see survey results by who answered the questions. Actually as an aside that would be a very interested study on its own.

So, IDC developed a maturity model from the study data.  Here is what they had to say about that:

Our aim was to identify which cultural and technological choices and decisions determine analytical competency. It is quite possible that using business intelligence (BI) with incorrectly specified models or misunderstood data is worse than not using BI in the first place. The benefit of a maturity model is that it allows for clarity about how firms can improve their analytical orientation — and what the key differences are between sophisticated adopters and starters.

The IDC model was driven by three critical dimensions:

  • Analytical technology tool adoption
  • Analytical diffusion
  • Process sophistication

These dimensions were used to categorize each company into one of four categories. These are shown below in order of maturity from lowest to highest and with the percentage of companies in each category:

  1. Starter – 48%
  2. Simple – 28%
  3. Strategic – 15%
  4. Savant- 10%

That’s right .. nearly half of Canadian companies with revenue over $100 million are in the ‘Starter’ category!  And another quarter are only in the ‘Simple’ category.  Only 25% of Canadian companies with revenue above $100 million made it to the top two levels of BI maturity, ‘Strategic’ or ‘Savant’.  And ‘Savant’ held only 10%.

So, here we are in 2012, at the dawning of the age of ‘big data’, ‘data scientists’, companies around the world are actively competing and innovating on a whole new playing field of data and analytics, and 75% of Canadian companies have barely begun to get started with business intelligence.

Just to be clear about the implications of this shockingly poor showing by Canadian companies.  The McKinsey Nov 2011 study titled Analytics: The Widening Dividewhich was a joint study by MIT Sloan Management Review and IBM Institute for Business Value with insights gathered from more than 4,500 managers and executives, said the following about competitive advantage through analytics:

  • The gap is widening
  • Transformed organizations use analytics more widely
  • Transformed organizations leave others behind
  • Moving faster with analytics
  • Managing risk for strategic advantage

Let’s continue with the IDC Canadian BI Maturity study results.  Some other findings that were highlighted in the report:

  • 40% of respondents report using spreadsheets as their main tool. Our maturity model as well as common sense denotes spreadsheets as an indicator of analytical immaturity.
  • 33% have static reports as their highest level of analytics.
  • 18% claim to do “what-if” modeling.
  • 28% say they do process monitoring.
  • 13% use predictive analytics.
  • 10% use automated decision making.
  • 15% have adopted automated decision making (even in financial services).
  • 35% of respondents have enterprise wide data marts, datawarehouses, or enterprise wide BI services.
  • Analytics is still predominantly a tool for executives and managers.
  • Analytics has established itself as a worthwhile investment providing solid value. Overall, 21% thought analytics represented great value, combined with a further 40% for good value.
  • Adoption of mobile analytics is 33% .

The heaviest users of analytics were as follows:

  • Financial department (62%)
  • Sales (53%)
  • Operations (45%)
  • Marketing (36%)
  • IT (21%)
  • HR (15%)
  • Supply chain, admin, executive, inventory mgmt, customer care, procurement, engineering, risk mgmt/fraud, other, merch planning, legal and others were all either ~10% or less.

Data management was found to be lacking:

“Investing in data — whether quality, timeliness, and/or comprehensiveness — is critical to the success of any analytics project. IDC has found that it is vastly under-emphasized in the average Canadian organization. ..  The fact that only 31% of respondents have enterprisewide, fully standardized processes only goes to show how far we have left to travel.”

Another important observation made during the survey was:

“marketing fog is emerging around terms like “predictive analytics” and “real time.” Numerous respondents believe their firms have already adopted these solutions when in fact they have not.”

This jargon and marketing speak is likely causing inappropriate decisions around software purchases and resources.  Even the survey and its report have some ambiguity around the terms “business intelligence” and “analytics”.  Suffice to note that for the uninitiated there is some learning to do to understand them.

For now, lets leave aside the relative comparison of Canada vs the rest of the world in terms of maturity.  But I suspect  that some countries, if given this survey, such as the US, UK, NZ, Singapore, Taiwan, Germany, would do relatively better than Canada.

Even if that is not the case, and Canada ranks equal to its advanced economic peers, then it should still want to improve.  That aside, this is still an individual ranking and surely the field on which competitors play is not even.  For example American retail giants have been coming into the Canadian marketplace and totally changing the competitive landscape.

So, lets just say that this survey is a red hot alarm bell for Canadian business and especially those 75% of Canadian companies at the lower end of the BI maturity scale.

This is also a red alarm for Canada.  There is a very real possibility that these poor showings are being reflected in Canada’s perennially low productivity showings relative to other advanced economies, as well as Canada’s recent slight move down in innovation rankings.

This is something the federal government could get involved in by simply making it a priority issue and challenge Canadian business to aim and achieve a bit higher.  The government could also facilitate events, take the lead themselves, promote education that gets Canada more data scientists.

One thing is certain, this train left the station a while ago, and it is picking up speed.  The competitive gap is yawning wider every day.

FYI, Ideaca is planning a webinar featuring a guest speaker on this topic to be held tentatively on September 25, 2012 at 1pm EST.

Contact Ideaca for a copy of the survey.

CDN BI Maturity Results from IDC: Private Unveiling