Informatics professional services price indexes (IPSPI)

Detailed information for 2018

Status:

Active

Frequency:

Annual

Record number:

2333

The informatics professional services price indexes measure annual price changes for various informatics services such as data processing and hosting; software and software licensing; computer systems design; and custom software design services.

Data release - November 1, 2019

Description

The informatics professional services price indexes measure annual price changes for various informatics services such as data processing and hosting; software and software licensing; computer systems design; and custom software design services . These price indexes are useful indicators of economic activity in the informatics services industry, and can also prove helpful as a supplementary tool for performance evaluation, cost monitoring, contract assessment and benchmark comparisons. In addition, the indexes are used by the Canadian System of Macroeconomic Accounts (CSMA) to arrive at estimates of real value-added for the industry and to measure changes in productivity in this industry.

Statistical activity

These indexes are a part of the Services Producer Price Index program (SPPI) at Statistics Canada.

The SPPI program develops and produces price indexes for a number of business service categories. This initiative fills an important data gap in the area of economic statistics, has resulted in a more comprehensive set of service price indexes, and allows Statistics Canada to produce more accurate estimates of real-value added GDP and changes in productivity.

Reference period: The time period for which the IPSPI equals 100; currently this is the year 2015.

Collection period: Collection normally begins in late April of the year following the reference period and runs until August of the same year.

Subjects

  • Business, consumer and property services
  • Prices and price indexes
  • Professional, scientific and technical services
  • Service price indexes

Data sources and methodology

Target population

The target population consists of all business establishments in Canada that engage in the provision and sale of informatics professional services.

The target population excludes the smallest 5% of businesses in Canada (in terms of annual revenue).

Observed population:

This consists of all business establishments in Canada that are classified on Statistics Canada's Business Register (BR) to one of the following three (NAICS) industries:

NAICS 518210 - Data processing, hosting and related services

NAICS 51121 - Software publishers

NAICS 54151 - Computer systems design and related services

The observed population excludes the smallest 5% of businesses (in terms of annual revenue) in each of the three NAICS industries listed above.

Differences between the target and observed populations arise mainly due to issues of classification on Statistics Canada's Business Register. For example, a Canadian business that has 10% of its sales revenue classified to NAICS 518210 would be considered part of this survey's target population, but according to the conventions adopted by Statistic Canada's Business Register, would not be classified to this NAICS industry since a majority of its sales revenues are not attributable to this industry. In this instance, this establishment would be part of this survey's target population, but not part of the observed population.

Instrument design

The questionnaire used for the informatics professional services price indexes was developed by subject-matter experts at Statistics Canada.

The development of the questionnaire content was based on feedback provided by Canadian informatics companies, via telephone interview. The interviews touched on a number of topics related to pricing in the informatics industry, such as how companies charge clients for informatics services, and how often they typically update their prices.

In addition, questionnaire design specialists from Statistics Canada conducted focus-group testing sessions with informatics companies in Toronto and Montreal. Feedback from these sessions were reflected in the final questionnaire.

The methodology used by this survey to ensure "constant quality" (of the products and/or services sampled) is to establish a group (basket) of professional levels for each firm, and follow the prices associated with these same levels over the lifespan of the basket.

Following sample selection, new survey participants (respondents) are introduced to the survey through telephone interviews. During this initial phase of data collection, respondents are guided through the process of selecting representative products for which prices will be reported in subsequent survey cycles (i.e. longitudinally). This process may span several collection cycles until respondents become familiar with the survey.

After the initialization phase, data are collected on an ongoing, annual basis via electronic questionnaire (EQ).

Sampling

This is a sample survey with a longitudinal design.

Cross-sectional with longitudinal follow-up - the statistical units which are specific to one point in time are also followed over time.

The sampling frame for this survey consists of all establishments that are classified on Statistics Canada's Business Register to one of the following (NAICS) industries: NAICS 518210 - Data processing, hosting and related services NAICS 51121 - Software publishers NAICS 54151 - Computer systems design and related services The sampling frame does not include the smallest 5% of businesses (in terms of annual revenue) in each of the three NAICS industries listed above.

Sampling Unit

Establishment

Definition: the establishment is the unit at which all accounting data required to measure production are available. It is defined as the most homogeneous unit of production for which the business maintains accounting records from which it is possible to assemble all the data elements required to compile the full structure of the gross value of production (total sales of shipments, and inventories), the cost of materials and services, and labour and capital used in production.

Stratification method

The population is stratified, or divided, into strata corresponding to the following three (NAICS) industries:

NAICS 518210 - Data processing, hosting and related services

NAICS 51121 - Software publishers

NAICS 54151 - Computer systems design and related services

Within each stratum (i.e. industry), an independent sample is selected.

The number of establishments selected (sampled) into each strata is proportional to the size of each strata on the survey frame (in terms of annual revenue).

Sampling and Sub-sampling

The total number of establishments selected into the survey sample is 2000.

The number of establishments sampled in each industry is proportional to the size of the industry on the survey frame (in terms of annual revenue).

The minimum number of establishments that can be selected into each strata is 150.

Prior to selection of the survey sample, each establishment on the survey frame is assigned a selection probability, which is proportional to the size (in terms of annual revenue) of the establishment. In other words, larger firms are more likely to be selected into the survey sample within their strata than smaller ones.

Data sources

Data collection for this reference period: 2019-04-15 to 2019-08-14

Responding to this survey is mandatory.

Data are collected directly from survey respondents.

Following sample selection, new survey participants (respondents) are introduced to the survey through telephone interviews. During this initial phase of data collection, respondents are guided through the process of selecting representative products for which prices will be reported in subsequent survey cycles (i.e. longitudinally). This process may span several collection cycles until respondents become familiar with the survey.

After the initialization phase, data are collected on an ongoing, annual basis via electronic questionnaire (EQ).

Information about the time it takes respondents to complete the survey questionnaire is collected and monitored closely. Currently, it takes respondents an average of 60 minutes to complete the survey.

View the Questionnaire(s) and reporting guide(s) .

Error detection

Error detection is conducted at the time of data collection. The electronic questionnaire has built-in error detection functionality, so that survey respondents are made aware of potential reporting errors prior to submitting their questionnaire. This reduces the total operational cost of administering the survey (in terms of the number of necessary follow-up attempts) as well as the burden on survey respondents.

During post collection processing, a set of systematized error detection procedures identify outliers and possible reporting anomalies.

Telephone communication (Computer Assisted Telephone Interviewing) is used for non-response and to follow-up with respondents when data is unclear or in possible error. Several follow-up contacts can be made including sending out a reminder fax or letter in order to collect data.

Time and effort is devoted to keeping the specifications constant such that only the pure changes in price are tracked. Some information is also collected in order to ensure, as much as possible, that the collected data correspond to the same specifications over time. This constant quality price then feeds into the CSMA estimates of constant dollar GDP.

Imputation

Missing data are generally estimated by a systematized imputation process. In any given period, price data may not be available for estimation. In such cases, missing data are imputed using the average price movement of remaining units within the same stratum (overall mean or targeted mean imputation method).

Estimation

Estimates are produced for four different categories of informatics services:

1. Data processing, hosting, and related services

2. Software and software licensing

3. Computer systems design and related services

4. Custom software design and development services

These categories are based on the North American Product Classification System (NAPCS), version 2017.

The establishments in the survey sample will provide price information for each of the four different informatics service categories for which the establishment has sales revenue. For each category, the establishment will provide a list of the professional levels that recorded billable time to clients during the reference period (year) in question. For each professional level, the average billing rate as well as the number of billable hours are collected, on an ongoing, annual basis.

1. The establishment: each establishment reports a breakdown of their annual sales revenue according to the four different categories of informatics services, as listed above.

2. Informatics service category: For each informatics service category, the establishment will report a listing of the professional levels that invoiced billable time to clients for work performed in this service category.

3. Professional level: For each professional level as specified in (2), the establishment will report the Average (annual) billing rate as well as the total number of hours billed over the course of the reference year.

Examples of professional levels include: senior and/or junior software developer, business analyst, project manager, quality control (QC) manager and/or tester, web and/or application architect.

Prices

At the most detailed level, a particular price quote will refer to: (1) a particular informatics service category; and (2) a particular professional level.

A particular price (i.e. quote) is defined as the average billing rate (i.e. billed to clients, customers), where the average covers all billable time recorded over the course of the reference year. The average billing rate is equal to the total (gross) dollar amount billed to clients in the reference year divided by the total number of billable hours that were charged over this period.

Weights

At the lowest level of aggregation, price indexes across all establishments are compiled at the professional service level for each informatics service category for which sales revenue is reported. These price indexes are weighted averages of the average billable rates associated with each professional level. The weights for each professional level correspond to the number of billable hours reported for each professional level.

At the highest level of aggregation, price indexes are compiled for each informatics service category. For a particular service category, these price indexes are a weighted average of the professional service price indexes (whose compilation are described in the previous paragraph), where the weights correspond to the sales revenue at the establishment level for the particular service category.

Linkage

When a new sample is introduced into the survey, two back-to-back years of both weight and price information will be collected for this new sample. This ensures that a price index can be computed for each consecutive reference year.

The informatics professional service price indexes are Laspeyres chain linked indexes, available at the Canada level only.

Quality evaluation

An in-depth assessment of quality is conducted prior to the dissemination of estimates. This assessment is based on two key elements of quality (accuracy and coherence); as defined in Statistics Canada's guidelines for the validation of statistical outputs.

The survey's data collection strategy is designed to ensure that targeted response rates are met every cycle. Analysts pay close attention to this metric and react appropriately to ensure that the survey's coverage of the industry is thorough. Particular attention is also given to ensuring that sampled products or services are representative of actual transactions happening in the market place. This is done by conducting over-the-phone interviews with survey respondents when they are selected into the survey sample for the first time, to ensure that respondents select product varieties for subsequent pricing that are representative of the industry as a whole. These two activities, fundamental to the overall quality of the estimates, are done consistently.

The collection instrument itself (a web-based questionnaire) includes many edits and data validation checks, to ensure that the data is valid and coherent before it is received by Statistics Canada.

Analysts also undertake additional validation activities every cycle to ensure the coherence of survey estimates. These include among others activities: analysis of price changes over time (including analysis of trends), at the business/company, industry, subsector and sector levels; certification of key contributors to price change; and confrontation of estimates against other related data sources. Contextual analysis of survey results is also performed in light of prevailing economic conditions.

Engagements with relevant stakeholders are also undertaken periodically. Forums involving other Statistics Canada analysts, industry stakeholders and partners at other national and international statistical agencies provide valuable insights that inform the development and research agenda of the program.

Disclosure control

Statistics Canada is prohibited by law from releasing any information it collects which could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

Collected data are converted to price indexes and data are released as such, so that it is not possible to identify the suppliers of raw prices.

Revisions and seasonal adjustment

With each release, data for the previous year may be revised, and is finalized at the same time. The indexes are not seasonally adjusted.

Data accuracy

The statistical accuracy of these indexes depends on the price and weight data obtained from survey respondents. It also depends on the reliability of the sampling procedures used to select establishments into the survey sample.

Processing procedures for data editing are in place to ensure the validity and consistency of the survey data. Consequently, the aggregate indexes at all levels are considered to be statistically reliable.

Non-sampling error

Sampling errors occur when observations are made only on a particular subset of the overall population and not on the entire population. All other errors that arise from the various survey phases are referred to as non-sampling errors. For example, these errors can occur when a respondent provides incorrect information or does not answer certain questions; when a respondent misinterprets a question or definition; when a unit in the target population is omitted or covered more than once; when an out of scope unit is included by mistake; or when errors occur in data processing.

Non-response bias

For establishments that do not respond to the survey, their data is computed as a weighted average of the data from the establishments that did respond.

It is suspected that the primary effect of non-response on these price indexes is to increase the variance (inaccuracy) of the price indexes. There is no evidence that non-response leads to statistical bias in the price indexes.

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