More BI spending needed, says study

An industry-sponsored study indicates while awareness of business intelligence (BI) is high among Canadian companies some of them want to invest more in the space.

On behalf of the Marketing Research and Intelligence Association and outsourcer EDS Corp., Ipsos Reid surveyed over 500 Canadian business executives and managers on their company’s BI activities. The respondents rated their company’s performance in different areas of BI at 6.8 out of 10, ranging from environmental scanning and secondary market research at 6.3 to competitive intelligence at 7.1.

Most respondents (six out of 10) said their companies were spending enough on BI, but one-third said their company should be spending more. The study noted larger companies were 50 per cent more likely to say they should be spending more on BI.

“That was an interesting gap because when you look at other variables in the survey there’s not as big of a gap,” said Steve Mossop, president, Market Research Canada West, Ipsos Reid. Mossop said larger companies are more budget-oriented, and the nature of the budgeting process could explain why managers at larger companies feel their investment in BI isn’t high enough.

He noted in larger companies decision-making for BI gets pushed down the chain, and the further away from senior management you are the harder it is to get buy-in for a large IT project. “It may be frustration from people that if it doesn’t fit in the budget then it doesn’t get done, even if it’s a good thing to be doing,” said Mossop.

Of the sample group, 34 per cent were larger companies and of those companies, 36 per cent said they spent over $150,000 on BI. However, half of the respondents from large companies didn’t know how much their companies spent on BI. Mossop said that’s because BI tends to be siloed in different business groups in larger companies, which prevents companies from getting the full value of their BI investments.

“There seems to be a smattering of these functions within the company,” said Mossop. “Companies need to house it all under the same roof and create a BI department responsible for all these functions.”

Vendors have been working to end that siloing of applications, with firms such as Cognos and Hyperion Solutions recently releasing “consolidated” versions of their BI platforms that bring together various BI tools in one unified package. Competition is also growing as enterprise vendors like SAP and Oracle enter the space, and with Microsoft and IBM soon expected to also go after a piece of the BI pie.

Montreal-based drug maker Pfizer Canada has used BI tools from Hyperion for about five years, mainly in the sales and marketing and finance departments. Michael O’Shaughnessy, Pfizer’s senior manager for information architecture, said their data warehouse integrates over 80 internal and external data sources monthly, generating 24 BI products, including a customized dashboard for their 800-person field sales team.

O’Shaughnessy said they don’t really have a need to deploy BI enterprise-wide, or spend more on BI than they currently are. “I don’t think we’re spending too much, or not enough. The consensus is we’re spending at the correct level,” he said. “If we invested more in BI we could get more results, but I think our spending reflects where we are (as a company).”

Warren Shiau, lead analyst, IT research with The Strategic Counsel in Toronto, said the BI spending gap might not be a budget issue. When larger companies say they’re not spending enough on BI, he said there’s usually a background infrastructure issue inhibiting the spending.

Shiau noted that BI has existed in different forms for years. In the early 1990s it was called executive information systems, and now has been re-branded BI as vendors push the benefits down from the executive suite throughout the organization.“It works, it helps,” said Shiau. “Anything that gives you information helps your business decisions, as long as the data behind the information is good.”

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