The rights and wrongs of competitive intelligence

By analyzing rivals' moves, competitive intelligence (CI) programs allow companies to anticipate market developments rather than merely react to them. The American Productivity & Quality Center (APQC) recently concluded a benchmarking study comparing the CI practices of 12 identified best practices companies (partners) with 19 sponsor organizations looking for ways to improve their intelligence programs. While most of the companies surveyed use a corporate intranet to disseminate information on competitors, APQC found that best practices organizations share the most sensitive information only with senior management.

Key Business Decisions Influenced "To a High Extent" by CI Information

KEY Sponsors Partners
Strategy formulation38%55%
Mergers and acquisitions8%45%
Strategy implementation19%45%
Entering new markets27%27%
Vertical integration focus15%22%
Exiting of markets9%18%
New product development13%0%
R&D focus8%0%
New capacity additions7%0%

Extent to Which Your CI Function Uses IT for the Following Purposes (1 = to no extent; 7 = to a high extent)

Sponsors Partners
Disseminating intelligence5.56.1
Strong information so that it is accessible5.16.0
Sharing information between functional groups within the organization5.45.3
Collecting information from external sources5.95.3
Consolidation of different internal and external sources of CI 5.04.9
Facilitate the usability of CI through filtering, packaging, etc.4.64.8
Collecting information from within the organization4.74.1

Best Practices

  1. Don't skimp. A hefty investment in CI can pay off quickly, says Farida Hasanali, an APQC project leader and study team member. For example, Houston-based Compaq ponied up a "sizable investment" for its CI program, not including salaries, Hasanali said, allowing the company to quickly assemble a vast electronic library of analyst reports and competitive data. Employees can find about 80 percent of the information on the intranet, while the 20 percent intended only for the senior leadership team is kept on a separate server.
  2. Don't get discouraged. Even if you don't have $1 million to spare, you should go all out to build a CI program. Houston-based Shell Services International, an IT services group within Royal Dutch/Shell Group, dedicated one emplooyee for three months to build a CI website. "It's all right to start small if you have to," Hasanali says. "We all have the Internet to gather data."
  3. Get the word out. IT is essential in creating a CI program, but companies should make sure they aren't hiding behind their intranets. "If people in the company don't know the CI team, they won't trust the information," Hasanali says. CI professionals should go to department meetings to seek out intelligence needs while raising their visibility.
  4. Establish clear objectives. Make sure your goals are clear to top management. At Compaq, CI goals include speaking to top executives and providing opinions on when to release products. If a company is vague about a CI initiative's scope, it will be more difficult to make strategic decisions.


This story, "The rights and wrongs of competitive intelligence" was originally published by CIO.

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