Competitive Intelligence:What is It & It’s Status

Jerry P. Miller

Director

Competitive Intelligence Center

Simmons College

Boston, MA+1-617-521-2809

+1-671-521-3141 (fax)

jmiller@simmons.edu

cic.simmons.edu

Conduct Intelligence to:

Gain a Competitive Advantage

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The Intelligence Function:

• The process of ethically collecting, analyzing, and disseminating accurate, relevant, specific, timely, foresighted and actionable intelligence regarding the implications of the business environment, competitors, and the organization itself.

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The Intelligence Function:

• Gather information from primary & secondary sources

• Upgrade information to intelligence incorporating analyst’s perspective

• Generate insights and suggestions• Disseminate to decision makers who take

action that can gain a competitive advantage for the firm

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The Intelligence Process is NOT:

• Industrial/Economic Espionage

• Corporate Spying

• Routing news clippings

• Searching the Web

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Why Intelligence?

• Managers need to increase the quality of:1) products or services

2) strategic planning and3) market knowledge

• That results in higher business performance

How Do I Know if I Need an Intelligence Function?

Well, how critical are the questions that keep you awake at night?

How Many Resources Are Enough?

Well, how many key managers are currently obtaining and using

adequate intelligence effectively for decision making?

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Strategic Intelligence:

• Emphasizes the relationship between the intelligence function and strategic decision-making

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Business Intelligence:

• Incorporates the monitoring of a wide array of developments across an organization’s external environment, which includes customers, competitors, suppliers, economic issues as well as technical and regulatory changes

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Technical Intelligence:

• Monitors research and development issues • Reduces risky decision making• Broadens awareness of competitive situation• Identifies business alternatives• Increases warning time from 31 to 37 months in

chemical/pharmaceuticals industry and from 17 to 33 months in other industries

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Counterintelligence:

• Protects intelligence collection activities and protects plans, programs, and projects from adversaries

• Hire security specialists

• Train employees not to give away sensitive information

• Computer usage heightens importance

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Who’s Doing Competitive Intelligence?

• 90% of Fortune 500 firms in the U.S.• 9% of U.S. firms with formal processes• Chemical and telecommunications firms• Firms with high R&D expenditures• Firms that own many patents• 2-3% of German firms in various industries• U.S. & U.K. firms: leading intelligence producers

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How Do Leading Firms Conduct Intelligence?

• Broadcast intelligence to users• Increase number of intelligence users• View intelligence as decision critical• Intelligence is part of managers’ duties• Institutionalize the intelligence function• Manage corporate knowledge assets• Maintain and rely on during a recession

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Primary Information Sources(Find Experts!):

• Interviews with internal experts, customers, and suppliers

• Marketplace surveys• Industry analysts• Business editors• Associations• Observations• Unpublished documents

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Secondary Information Sources:

• Internal and external databases• Industry and government reports• Directories• Statistical sources• Newspapers and magazines• Trade publications

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Criteria Not to be Overlooked:

• Balance strategic & operational needs

• Adjust the function as the market changes

• Determine locus of decision making

• Company’s structure

• Corporate culture

• Market environment

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Common Problems:

• Managers don’t value intelligence

• Managers consider intelligence a luxury

• Inability to incorporate it into strategy

• Managers believe “I know my industry!”

• Unskilled people try to perform intelligence

• Managers hoard information

• The function doesn’t meet the real needs and concerns of decision makers

• Intelligence is seldom used by decision makers (A.S. e.g.)

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Creating the Intelligent Firm:

• Adjust decision-making process & culture

• Open communication lines

• Sensitize firm to marketplace changes

• Align intelligence to decision-making

• Support the process with technology

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Excellent Intelligence Service:

• Clearly define intelligence needs

• Use creative sources

• Understand the complexity of the issues

• Upgrade information to intelligence

• Offer recommendations, suggestions, and alternatives

• Obtain feedback from decision makers

Motivator:

What’s in It for Me?

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Motivational Issues

• What are the benefits to the firm?

• What are the benefits to decision makers?

• What are the benefits for intelligence professionals?

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Predict & Measure the Impact of the Intelligence Function

• Determine where & how impacts will occur

• Determine your competitive advantage

• Assess appropriateness of costs (cf. CFO)

• Measure impacts in terms of:– Time- or cost-saving– Cost avoidance– Revenue enhancement

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Various Roles in the Intelligence Process

• Core Roles:– primary researchers

– secondary researchers

– analysts

– integrators

• Supporting Roles:– system builders

– data builders

– knowledge builders

– protectors

– decision makers

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Intelligence Skills Come From:

• Personal traits

• Formal education

• Mentoring

• Work experience

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Competitive Intelligence:

It’s Current Status

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Where is the Intelligence Profession Going?

• More firms, regardless of size, establish intelligence

• Development of more sophisticated and accurate measurement techniques

• Deterioration of centralized intelligence functions

• The business community pressures academics to teach intelligence

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Where Going Continued...

• Most industrialized countries adopt standards to protect trade secrets

• More extensive background checks of potential executives

• More firms establish guidelines for conducting intelligence

• The volume of legal cases establishes a body of legal precedent

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Where Going Continued...

• Corporate leaders demand a deeper analysis of critical issues

• Internationalization of business leads to a varying sets of business conduct

• Information technologies will enable an increase in unethical collection attempts

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Coming up Today

• Learn how to search the Invisible Web• Use the Web and alerting services to do CI• Use the right application to support CI• Using workflow applications to support CI• Learn how to diagnosis and fix knowledge

based, value-creation processes• Learn to create knowledge correctly to

sustain a competitive advantage