The competitive intelligence edge

By Loretta W. Prencipe, InfoWorld |  Software

CI is more than just keeping tabs on your competitors. CI is the systematic
legal, moral, and ethical gathering of business information on competitors, customer,
and regulators. In the first of a two-part series, InfoWorld examines the act of
collecting competitive intelligence.

Forget dumpster diving, hacking, bribery, burglary, or a competitor walking away
with an unattended marketing plan. Those are activities of corporate espionage,
competitive intelligence's evil twin, says John Nolan, principal with the Phoenix
Consulting Group, a CI (competitive intelligence) consulting firm in Huntsville,
Ala.

"CI employs legal, ethical, and nonfattening methods to gather competitively
valuable information. Thousands of companies around the world use it to find out what
their business rivals are planning."

1. Identify good contacts

"CI is not rocket science. It's straightforward business practices that take
advantage of your contacts in the marketplace," Nolan says. In many companies these
contacts and the possible business intelligence they hold go to waste. For instance,
Nolan says, your purchasing manager deals with vendors who also chat up your
competitors. Your sales force -- and that of your competitors' -- both visit the same
customers. These contacts are likely to know about a competitor's upcoming product
launch, Nolan says.

2. Focus on CI

Understanding the depth of market knowledge and the strength of the contact network
within your own company is just the beginning. "The challenge is capturing what
employees know, aggregating it into a useful form, and then disseminating it to those
who need to know," Nolan says. Employees should be told what kind of information is
important to the company and to whom and how they should report it.

3. Get info without asking

Nolan calls this "Elicitation 101." The worst thing to do is to ask direct
questions, he says. If you ask an industry colleague, for instance, what a competitor
is doing with a certain technology, that person may become uncomfortable and not
disclose any insight.

Ease into a general conversation with the person that might hold useful
information. Once the lines of communication are open and trust is
established, "gradually get around to the topic without reducing the level of
cooperation and without raising [the individual's] suspicions," Nolan says.

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