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

 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 and
3) market knowledge
• That results in higher business performance

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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 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
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 Motivator:

What’s 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?

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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: • Supporting Roles:
– primary researchers – system builders
– secondary researchers – data builders
– analysts – knowledge builders
– integrators – 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
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