Competitive Intelligence: What is It & Its 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

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.

NOM May 15, 2001 Jerry P. Miller

The Intelligence Function:

Gather information from primary & secondary sources Upgrade information to intelligence incorporating analysts perspective Generate insights and suggestions Disseminate to decision makers who take action that can gain a competitive advantage for the firm
NOM May 15, 2001 Jerry P. Miller 4

The Intelligence Process is NOT:

Industrial/Economic Espionage Corporate Spying Routing news clippings Searching the Web

NOM May 15, 2001 Jerry P. Miller

Why Intelligence?
Managers need to increase the quality of: 1) products or services 2) strategic planning and 3) market knowledge That results in higher business performance

NOM May 15, 2001 Jerry P. Miller

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?

Strategic Intelligence:
Emphasizes the relationship between the intelligence function and strategic decisionmaking

NOM May 15, 2001 Jerry P. Miller

Business Intelligence:
Incorporates the monitoring of a wide array of developments across an organizations external environment, which includes customers, competitors, suppliers, economic issues as well as technical and regulatory changes

NOM May 15, 2001 Jerry P. Miller

10

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

NOM May 15, 2001 Jerry P. Miller

11

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
NOM May 15, 2001 Jerry P. Miller 12

Whos 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
NOM May 15, 2001 Jerry P. Miller 13

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
NOM May 15, 2001 Jerry P. Miller 14

Primary Information Sources (Find Experts!):

Interviews with internal experts, customers, and suppliers Marketplace surveys Industry analysts Business editors Associations Observations Unpublished documents
NOM May 15, 2001 Jerry P. Miller 15

Secondary Information Sources:

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

NOM May 15, 2001 Jerry P. Miller

16

Criteria Not to be Overlooked:

Balance strategic & operational needs Adjust the function as the market changes Determine locus of decision making Companys structure Corporate culture Market environment
NOM May 15, 2001 Jerry P. Miller 17

Common Problems:
Managers dont 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 doesnt meet the real needs and concerns of decision makers Intelligence is seldom used by decision makers (A.S. e.g.)
NOM May 15, 2001 Jerry P. Miller 18

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

NOM May 15, 2001 Jerry P. Miller

19

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
NOM May 15, 2001 Jerry P. Miller 20

Motivator:
Whats in It for Me?

Motivational Issues
What are the benefits to the firm? What are the benefits to decision makers? What are the benefits for intelligence professionals?

NOM May 15, 2001 Jerry P. Miller

22

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
NOM May 15, 2001 Jerry P. Miller 23

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

NOM May 15, 2001 Jerry P. Miller

24

Intelligence Skills Come From:

Personal traits Formal education Mentoring Work experience

NOM May 15, 2001 Jerry P. Miller

25

NOM May 15, 2001 Jerry P. Miller

26

Competitive Intelligence:
Its Current Status

NOM May 15, 2001 Jerry P. Miller

28

NOM May 15, 2001 Jerry P. Miller

29

NOM May 15, 2001 Jerry P. Miller

30

NOM May 15, 2001 Jerry P. Miller

31

NOM May 15, 2001 Jerry P. Miller

32

NOM May 15, 2001 Jerry P. Miller

33

NOM May 15, 2001 Jerry P. Miller

34

NOM May 15, 2001 Jerry P. Miller

35

NOM May 15, 2001 Jerry P. Miller

36

NOM May 15, 2001 Jerry P. Miller

37

NOM May 15, 2001 Jerry P. Miller

38

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
NOM May 15, 2001 Jerry P. Miller 39

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
NOM May 15, 2001 Jerry P. Miller 40

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

NOM May 15, 2001 Jerry P. Miller

41

NOM May 15, 2001 Jerry P. Miller

42

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
NOM May 15, 2001 Jerry P. Miller 43