Deloitte

March 21, 2006 09:30 ET

Deloitte: Companies Need IQ Boost To Drive Growth And Profitability

TORONTO, ONTARIO--(CCNMatthews - March 21, 2006) -

Ready access to high quality, reliable, useful information still eludes 82% of Canadian companies

The vast majority of businesses across Canada (82%), and the rest of the world, are making fundamental strategic decisions without the benefit of accurate and timely financial and operational information. 65% of Canadian executives surveyed admit that information quality (IQ) remains a key issue citing disparate, non-integrated IT systems and the variability of business processes as problems.

IQ Matters, Deloitte's study of senior finance and IT executives from 385 companies across Canada, the U.S., Europe and Asia, revealed that despite significant investments in technology, the state of IQ is not acceptable. When surveyed on ten categories of information quality, including in relation to timeliness, reliability and accuracy of financial and operating information, Canadian executives reported 'room for improvement' in every category. But recognizing the problem is only the first step; companies must then figure out how to go about boosting their IQ.

"IQ is one of the most critical business issues facing companies today. Information is a valuable corporate asset and can bring a significant competitive advantage. Currently, overly complex and non-standardized processes and systems are resulting in real business costs and risks," says Gordon Shields, Partner, Deloitte. "Business decision-makers need timely, accurate information to effectively develop strategy and manage risk. Canadian executives need to ask themselves the question, 'do I have total confidence that every bit of information I utilize, or release to the market, is 100% accurate? If the answer is anything but 'yes', the next question is how do I ensure it is?"

Deloitte's IQ Matters Study: Highlights of Main Findings

The comprehensive study indicated that the most significant problem area is the quality of operational and financial information used for forward-looking planning and strategy development (by 71% of Canadian respondents, 85% worldwide). Canadian executives feel they are buried in information (85%) and that they feel there are 'multiple versions of the truth' (82%), which limits their ability to reach a useful decision.

Alarmingly, in an environment of increased compliance for financial disclosure rules and shareholder demands for transparency, 65% of Canadian companies said they could do a better job of ensuring financial information accurately reflects the performance of their business.

"Information management is not a new phenomenon," says Todd Genton, Partner, Deloitte. "But given today's business environment of increased regulatory scrutiny and intensifying competition, no Canadian company can risk the serious repercussions of releasing or using unreliable information. Improving IQ is not a 'nice to do', it is a 'must do' for every business."

The 'level of integration of business units' and 'not clearly defining the information required' are considered the biggest contributors to poor IQ within corporate Canada (each cited by 41% of Canadian respondents).

On a positive note, the study findings clearly indicate that finance and IT executives recognize the tangible advantages of better IQ. 82% of both Canadian and global respondents believe that improved information would enable them to make more effective and efficient management decisions, with 79% believing improving IQ would enhance the effectiveness of annual planning.

Recognizing the impact of IQ on both operational and financial performance, business leaders are earmarking funds to make sure IQ is improved. Over 90% of Canadian companies are currently undertaking, or planning to undertake initiatives or investments to improve IQ over the next two years. Canadian finance and IT executives are also working together more closely to ensure technology, business processes, and financial and operating information meet the requirements of internal and external stakeholders, with 59% of Canadian companies (57% of global companies) reporting closer collaboration between their CFO and CIO.

Deloitte points to the main components of the long-term commitment required from Canadian companies to address the problem of IQ, including:

- Foster greater collaboration between finance and IT

- Promote IQ to the strategic level and align IT strategy with overall business strategy

- Identify and remove barriers to IQ

- Identify stakeholders responsible for relevant processes

- Measure and reward success

- Long-term: culture of responsibility for IQ, including effective policies, clear accountability structures, goals, metrics and training

"Although it is encouraging that Canadian companies understand the benefits of improved IQ and are committed to making the required investments, this is a progressive journey involving a 360 degree approach of assessing, reviewing and refining a hybrid of complex business components, staring with the closer collaboration between the CFO and CIO roles." commented Doug Wilkinson, Partner, Deloitte."

About the study

CFO Research Services and Deloitte consulting surveyed 385 senior finance and IT executives (including 34 Canadian participants) at large companies with annual revenues of approximately $500 million to over $1 billion across North America, Europe, and China in the summer of 2005 to explore the quality of management information and its proficiency in meeting information needs at large companies globally. Sixty-seven percent of respondents are from North American companies, 24% from European companies, and 9% from Chinese companies.

For a complete copy of the report, or further information, please visit Deloitte's website at:

http://www.deloitte.com/dtt/cda/doc/content/Final_IQMatters.pdf

About Deloitte

Deloitte, one of Canada's leading professional services firms, provides audit, tax, consulting, and financial advisory services through more than 6,200 people in 50 offices. Deloitte operates in Quebec as Samson Belair/Deloitte & Touche s.e.n.c.r.l. The firm is dedicated to helping its clients and its people excel. Deloitte is the Canadian member firm of Deloitte Touche Tohmatsu.
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms, and their respective subsidiaries and affiliates. As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any of its member firms has any liability for each other's acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names "Deloitte," "Deloitte & Touche," "Deloitte Touche Tohmatsu," or other related names. Services are provided by the member firms or their subsidiaries or affiliates and not by the Deloitte Touche Tohmatsu Verein.

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