december 1, 2005 state of the business intelligence industry

1December 1, 2005

State of the Business Intelligence Industry in Canada

Presented by:Steve Mossop, PresidentMarket Research Canada West

2

Outline of Today’s Presentation

Background

General Definition of BI

BI Intelligence Study

– Objectives and Purpose

– Awareness, Involvement, Knowledge of

– Overall Organizational Performance

– Importance of BI Relative to Other Functions

– Spending levels and Priorities

Overall Challenges For MRIA/BI

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Defining Business Intelligence

MarketResearch

TelephoneSurveys

OnlineSurveys

FocusGroups

MysteryShopping

CustomPanels

Online FocusGroups

One-on-ones

EnvironmentalScanning

AC NeilsonReports

AssociationStats

GovernmentReports

MediaMonitoring Economic

Reports

SyndicatedStudies

Data Mining

Predictive Modelling

Segmentation

Mining Customer Records

POS Systems

CRM

LibrarySciences

CompetitiveIntelligence

Google

InternalScanning

News Scanning Services

Ad Scanning/Tracking Mystery

Shopping

Website

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Purpose of the Study

The purpose of the study was to gather perspectives on Business Intelligence in order to further promote BI.

Specific objectives include:

– Determine who is responsible for BI in the organization and who are the key influencers.

– Understand how BI is defined within the organization.

– Identify the common practices that exist and the areas that are growing in the future.

– Identify some of the leading edge trends and techniques that exist.

– Assess the importance of BI in the organization relative to other business functions.

– Determine how BI is funded (amount and from who’s budget).

– Explore expectations for future growth in BI for organizations.

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Methodology and Sample

The findings are based on an online Ipsos Reid poll conducted across Canada on behalf of MRIA and EDS between November 7 and 15, 2005.

Respondents had to be very or somewhat knowledgeable about at least one aspect of Business Intelligence activities:

– Data mining,– Environmental scanning,– Secondary research, – Competitive intelligence, or– Primary market research.

Of the 674 willing participants, about 76% or 514 qualified for inclusion in this study.

We did 5 follow-up one-on-one interviews to get more depth to the findings.

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Methodology and Sample

Respondents consisted of:

– Managers (40%)– Directors/Top Level Executives (27%)– Professional/VP (10%)– Owners (7%)

Large and small organizations:

– 50 or less (43%)– 51–500 (24%)– 500+ (34%)

Profile:

– Male (70%), female (30%)– 7% under 35, 22% 35–44, 35% 45–54, 36% 55+– 46% with university degree (inc. 16% with graduate degree)– 38% Ontario, 24% Quebec, 14% BC

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Definition of Business Intelligence

Business Intelligence is defined as a process for professionally gathering, processing, analyzing and disseminating decision-making information relevant to your organization. It can also be referred to as knowledge management. Business Intelligence involves the collecting, filtering, analyzing and prioritizing data from various sources including data mining (from customer records, databases and other internal sources); market research; competitive intelligence; and, industry resources.

61% Have Heard of Business Intelligence

98% Agree With the Definition

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Organizational Involvement in Business Intelligence Activities

Have you heard of the following business terms?Which of the following is your organization involved in?

Aware ofBusiness Term

% Yes

Organization Involved in Activity

% Yes

Business Intelligence 61 45

Data Mining 61 42

Environmental Scanning 45 41

Competitive Intelligence 49 38

Market Research 98 30

Base: All respondents (n=514)

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Awareness and Knowledge of Business Intelligence Activities

28%

17%

16%

16%

12%

64%

48%

51%

43%

46%

7%

26%

25%

30%

33%

9%

8%

12%

10%

1%Market Research

Data Mining

BusinessIntelligence



Very knowledgeable Somewhat knowledgeableNot very knowledgeable Not at all knowledgeable


How would you describe your level of knowledge of …?

Awareof Term

98%

61%

61%

49%

45%

10

Level of Involvement in Business Intelligence Activities

16%

16%

16%

14%

14%

25%

27%

28%

26%

23%

28%

30%

31%

30%

29%

27%

26%

31%

34%

30%Market Research

Data Mining

Business Intelligence



Primary decision-maker Key influencerSecondary influencer No input at all


Please indicate your level of involvement, within your organization, in each of the following.

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Performance Rating of Business Intelligence Activities

23%

13%

17%

12%

14%

19%

24%

29%

32%

22%

19%

30%

53%

59%

52%

67%

68%

52%

Importance of BI (n=514)


Data Mining

Market Research

Competitive Intelligence

Environmental Scanning

Rated 1, 2, 3, 4 Rated 5, 6 Rated 7, 8, 9, 10

Base: Organization involved in activity (n=varies)

Please indicate how important Business Intelligence is to the success of your organization.

How would you rate your organization’s overall performance in each of the following?

Note: Importance ratings are based on a 10-point scale where 1 means not at all important and 10 means very important.Performance ratings are based on a 10-point scale where 1 means very poor and 10 means excellent.

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Responsibility for Business Intelligence Activities

BI is a high-level function/responsibility in organizations, falling under:

– CEOs (35%)

– CMOs (14%)

– CIOs (9%)

– Sales (12%)

Among CEOs, the level of commitment to BI is high:

– 31% very committed

– 34% somewhat committed

– However, 17% not committed, and 18% DK

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Importance of Business Intelligence in Organizations

20%

17%

16%

13%

13%

11%

13%

12%

12%

41%

37%

36%

34%

31%

31%

30%

28%

28%


Please rate the importance of Business Intelligence compared to each of the following otherbusiness functions of your organization.

9%

14%

11%

13%

13%

11%

16%

11%

10%

17%

23%

25%

26%

27%

24%

29%

27%

21%

Marketing/Advertising/Communication

Much more Somewhat more

% More Important

Somewhat less Much less

% Less Important

Sales

Management

Administration

Operations

IT/Technical Support

Accounting and Finance

HR

Production

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Spending in BI Initiatives

A total of:

– 1.18M businesses in Canada– Total revenues of $2.552 trillion dollars in 2004 – 495,000 over 5 employees

Average spending on BI in survey

– Median: $25K– Mean: $200K

$12B–$29.5B industry in Canada

– (1.18M*$25K=$29.5B, or 495KX$25K=12.37B)– Or about 1% of all revenues

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Spending Priorities For Business Intelligence

36%

34%

33%

32%

27%


Do you think your organization should be spending more, less or about the sameon each of the following in the future?

% More% Less



Market Research

Data Mining


5%

6%

6%

7%

8%

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Spending Priorities For Business Intelligence

36%

34%

33%

32%

27%

34%

30%

33%

32%

27%


Do you think your organization should be spending more, less or about the same on each of the following in the future?Still thinking about the future, would you say your company is likely to increase or decrease its level of investment for

each of the following?



Market Research

Data Mining


5%

6%

6%

7%

8%

4%

4%

4%

4%

4%

Spend moreIncrease investment

Spend lessDecrease investment

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Investing in Business IntelligenceWhich of the following categories best describes where your company would allocate the increased investment for …


(n=176)%

Data Mining(n=163)

%

Market Research(n=171)

%


(n=153)%

Environmental Scanning(n=141)

%

Tools/infrastructure 49 57 36 41 40

External services 47 36 58 54 54

Hire additional staff 27 23 30 26 28

Staff training 51 44 40 44 41

Other 1 3 1 3 1

Don’t know/not stated 6 5 5 7 11

Base: Greatly/moderately increase level of investment for

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Involvement in BI in Large vs. Small Organizations

Small organizations are almost equally involved in BI activities as small ones.

Overall BI scores are similar across company size, but data mining scores higher.

BI is equally important across all company sizes.

Individuals from large companies are far more likely to think their organization should be spending more in BI.

Size of Company

<$5M$5-10M

$10M+

BI 40% 56% 56%

Data Mining 33% 52% 54%


36% 47% 45%


34% 47% 48%

Primary MR 23% 38% 40%

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Barriers to Implementing BI

Follow-up one-on-ones showed significant barriers to adopting more BI initiatives:

– Cost/Funding

– Lack of Awareness/Understanding/Know-how

– Time/Time Management

– Buy-in From Senior Levels/CEOs/Boards of Directors

– Proving ROI

– Lack of Organizations Representing Interests of Profession

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Overall Conclusions

Overall awareness, and practice of BI is relatively low.

Level of influence on BI activities in organizations is widespread and all over the map.

Individuals rate their company’s performance relatively poorly.

Individuals rate the importance of BI highly, especially relative to other internal business functions.

A significant minority feel spending should increase.

BI is a huge business in Canada, and growing.

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Overall Implications

Ensure BI does not become just a management buzzword.

Need to create more synergies between the various functions.

Encourage companies to organize the functions together to take care of the synergies between them.

We need to make the discipline more exciting/sexy.

We need to promote the discipline – both internally and externally.

MRIA needs to do a better job in representing and promoting all facets of the discipline, not just research and competitive intelligence.

Need to do a better job in selling BI to senior ranks.

december 1, 2005 state of the business intelligence industry

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business intelligence

business functions

following business terms

aware of business term

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organization relative

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