WHITE PAPER
Competitive Intelligence
An Introduction to CI
Comintelli 2015
WHITE PAPER – Competitive Intelligence
Contents
1
Executive Summary ............................................................................ 3
2
Competitive Intelligence ...................................................................... 4
3
About Comintelli ............................................................................... 9
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1 Executive Summary
“There is at least one point in the history of any company when you have to change
dramatically to rise to the next performance level. Miss the moment and you start to
decline.”
- Andy Grove, CEO Intel
The purpose of this document is to:
●
Clarify the purpose of competitive intelligence (CI).
●
Define how CI can support a company’s decision-making process.
Two parallel developments have created an unprecedented demand for efficient
decision making:
●
The pace of change in business.
●
The amount of information available is greater than ever before.
Decisions must be made fast, yet still take relevant information into consideration.
To do this, organizations need to ensure that their employees receive the right
information at the right time. They must also improve their business productivity
through internal collaboration and information sharing.
The key to success will be creating customized environments in which people can
interact flexibly and can rapidly adapt business processes to these new
interactions.
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2 Competitive Intelligence
“Get your facts first, and then you are free to distort them as much as you
please.”
- Mark Twain
Competitive Intelligence (CI) is about gathering, analyzing and managing
information regarding industry actors and development with the purpose maximize
the own company’s competitive advantage. Put another way, CI is the process of
enhancing marketplace competitiveness through a greater understanding of a
firm's competitive environment.
2.1
The Intelligence Cycle
Effective CI is a continuous cycle (see picture below), whose steps include:
1. Planning & direction (working with decision makers to discover and hone their
intelligence needs, deciding how to do the designated task)
2. Collection activities (collection of raw material needed, conducted legally and
ethically)
3. Analysis (interpreting data and compiling recommended actions)
4. Dissemination (reporting and presenting findings to decision makers)
5. Feedback (taking into account the response of decision makers and their needs
for continued intelligence).
1
1
”Competitive Intelligence – an overview” featured on SCIP’s homepage (www.scip.org)
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2.2
Deliverables of a CI Program
CI should provide management at all levels with early warnings of changes in the
competitive landscape, including opportunity signals. It is a crucial part of
corporate management in the modern and fast changing economy. By analyzing
other actors (customers and competitors as well as regulators) moves, CI allows
companies to anticipate market development and act in accordance, before the
competition does.
According to Ben Gilad 2, a CI program should be able to deliver the following
results:
1. Early warning of competitive threat
2. Early identification of competitive growth opportunities
2
Ben Gilad, CI specialist, (http://www.bengilad.com )
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3. Benchmarking of best practices
4. Quicker response to market moves
5. Better understanding of major players: Customers, suppliers, politicians
6. Future scenarios for strategic planning
7. Accurate estimates for tactical decisions
8. Improved development activities
9. Identification of business blind spots
2.3
Getting Started With CI
As previously stated, the increasingly competitive marketplace has resulted in a
growing interest in CI. The number of companies with formal or organized CI
efforts varies between 65% and 85% (depending on whose figures you use). Jan
Herring, a long-time practitioner in the CI field has identified these five steps
required to create an effective CI program 3:
1. Educate and engage the users, your management – It must be their CI program
or it will not succeed.
2. Select the right program manager – Be sure that he/she is properly trained and
has access to the right tools.
3. Institutionalize the intelligence process – Identify the users’ needs, establish an
evaluation process and measure.
4. Create and professionally manage the three essential CI operations required to
produce actionable intelligence – a) Develop proficient intelligence collection
(both primary and secondary sources) and leverage advanced IT tools and
vendor services, b) Ensure that your intelligence analysis is providing real
insights and competitive foresight, and c) Disseminate the resulting intelligence
3
“Create an intelligence program”, Jan Herring, CI Magazine, vol 8, no. 5, September-October 2005
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in forms and formats that engages management and causes them to take
action.
5. Recognize that today’s CI program will need to be capable of dealing with
tomorrow’s
competitive
situations
–
Plan
and
develop
your
program
accordingly.
2.4
CI is misused or underused
Competitive Intelligence is still a fairly recent discipline that has not yet been fully
utilized in many organisations. In fact, a recent survey 4 shows that a majority of
U.S.-based companies that claim to use competitive intelligence (CI) either don't
use CI enough or use it the wrong way. And this does not even include the 30% of
companies that don't even have, or don't feel the need for, a CI system, despite
today's ultra-competitive environment
"In what is arguably the most competitive global marketplace in history, a
surprisingly high number of companies do not consider intelligence for strategic
reasons, to assess competition or to devise operational plans for their businesses,"
said Kenneth Sawka, a principal at Outward Insights. "And for those companies
that have an organized CI function, these systems tend to be ineffective or
underdeveloped."
"Each year, top companies spend millions of dollars on systems to analyze their
internal information, but investing in their intelligence functions to help
anticipate changes in the external environment tends to fall by the wayside," said
Bill Fiora, principal at Outward Insights. "Yet, the biggest threats and
opportunities come from outside, not inside, an organization. When an $800
million new drug or a multi-billion dollar merger are on the line, it's prudent and
necessary to use CI to assess what threats might exist."
4
“Ostriches and eagles” survey by Outward Insights, Feb 2005.
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2.5
A note on CI vs BI
The terms business intelligence (BI) and competitive intelligence (CI) are
sometimes used interchangeably by intelligence practitioners. However, in the
software business, these two terms usually mean different things and it is
therefore important to distinguish between the two terms.
●
Business Intelligence is normally concerned with internal, structured data, so
called data-mining or on-line analytical processing (OLAP).
●
Competitive Intelligence on the other hand normally deals more with external,
unstructured information.
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3 About Comintelli
Comintelli is a leading provider of Information Access Software, with solutions for
Knowledge Management and Competitive/Market Intelligence. Comintelli’s mission
is to create order in information chaos by filtering information according to users’
specific needs. The company was founded in 1999 and is based in Stockholm,
Sweden, with global representation through an extensive partner network.
Customers include successful Fortune 1000 companies in more than 10 countries,
such as AkzoNobel, Covidien, Tetra Pak and UPM Kymmene.
For more information, please contact:
Phone: +46-8-663 76 00
E-mail: [email protected]
Web: www.comintelli.com
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