Canada ranks below U.S., U.K. in global IT comparison

Canada is playing catch-up to both the U.S. and the U.K. in terms of IT planning and utilization, but the gap is narrowing, a study released Tuesday by Info-Tech Research Group says.

Financial and insurance companies

are the greatest users of technology, whereas retailers are at the bottom of the pile. But the greatest differences were geographic, according to Info-Tech analyst Jason Livingstone. A key indicator was the question: Does your company use IT as a strategic weapon? Only six per cent of Canadian firms answered positively, compared to 30 per cent in the U.S. and 17 per cent in the U.K.

“”It relates to the U.S. having a much higher utilization rate of strategic IT planning. U.S. companies are much more likely to have a strategic plan than Canada or the U.K.,”” he explained.

The London, Ont.-based firm conducted the study in the fall, concentrating on 149 CIOs and IT managers working at medium-sized companies.

According to IDC Canada Ltd. analyst Vito Mabrucco, Canadians may have been sitting on their laurels too long, taking advantage of a cheap Canadian dollar. “”Because of the low dollar, we can compete with the U.S. without necessarily improving productivity. We’ve created perhaps more of a lazy environment in terms of using technology more strategically,”” he said. He added that Americans may also be riding a legacy of investment from the dot-com boom of the late 1990s.

American companies may just be more driven than their Canadian and British counterparts, said Livingstone. They have a history of being early adopters of technology and being more entrepreneurial in general.

But that’s not to say that the status quo will be around forever. “”There is an ability for Canada and the U.K. to catch up,”” said Livingstone. “”There are a number of organizations in both of those economies that are perfectly suited and you would expect them to have a strategic IT plan.””

He added that a number of survey respondents who didn’t have a strategy in place are in the process of implementing one or at least thinking about it.

According to Meta Group Inc. analyst Howard Rubin, the U.K. may already have caught up. U.K. companies are spending about a third less on IT than Americans, “”but they are seemingly more efficient,”” he said. “”We found that in the U.K., IT was not always the first victim (of budget cuts). In fact, in terms of strategic planning, right now U.S. companies are in a tail spin and trying to be reactive and going through a second wave of cost reductions.””

Canada is also gaining on the U.S., he added. “”Canada is becoming much more U.S.-like. If you see the headlines about what is going on in Canada, you might as well be reading U.S. papers. In terms of IT spending and development, Canada is developing faster in terms of its ability.””

Questions in the study included: What is your experience in using IT planning?; What benefits did you see?; and How much involvement do you have in strategic planning overall?

Livingstone’s firm plans to help its clients by suggesting best practices gleaned from the study and publishes a 300-page “”how-to”” for getting an IT plan started.

Comment: [email protected]

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Jim Love, Chief Content Officer, IT World Canada

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