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Competitive intelligence—
Gaining insight to enhance decision-making

This article appears in the issue November/December 2011, [Vol 20, Issue 10]
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Competitive intelligence (CI) entails gathering and analyzing information about a company's market and its competitors, to support both long-term strategic planning and daily decision-making. Many software tools are available to automate the collection process and to analyze both quantitative data and unstructured information. However, the first step in establishing or re-evaluating a CI program should be to consider the purpose of the program.

"Companies should decide on their goals, articulate the key decisions that will be made in the next couple of years and define the audience for the information," says Ellen Naylor, CEO of The Business Intelligence Source. "Selection of CI tools should flow from those decisions."

Keeping pace

Facing razor-thin profit margins and a volatile market, fuel distributors are highly motivated to keep a close eye on the competition. Global Partners LP is a large distributor of gasoline, diesel, ethanol, home heating oil, natural gas and other fuels in New England and New York. In addition, the company owns and supplies about 190 Mobil branded retail gas stations in New England. The company's business has grown rapidly over the past few years, but its information systems were not keeping pace with the size and complexity of the market. In particular, Global Partners wanted to gain a better understanding of its competition, the market and its customers to optimize its pricing and analyze its profit and loss (P&L) data.

Global Partners' CIO, Ken Piddington, began evaluating business intelligence (BI) tools and last year deployed TIBCO Spotfire, a BI solution from TIBCO Software. "We needed a product that was reasonably priced, data-agnostic and user friendly," Piddington says. "In addition, we wanted to be able to easily perform ad hoc analyses. Spotfire was a good fit." Purchased by TIBCO Software in 2007, Spotfire delivers an interactive, visual experience to the user, rather than taking the reporting approach that characterized many first-generation BI software products.

The initial set of analytics developed by Global Partners focused on the company's largest customers. "We looked at their buying patterns, the market, our prices and those of our competitors, along with the impact of the weather and numerous other factors," Piddington says. "We found that some customers bought solely based on price, while others were more tolerant of some price fluctuations, possibly because of the value they placed on the continuity of our business relationship and the quality of our service. The insights we gained are helping us optimize our pricing structure."

The data-agnostic analytic capability meant that Spotfire could readily access the wide variety of systems that Global Partners uses to understand its markets. "We use many disparate sources," Piddington explains, "including databases on mainframes and in Oracle, SQL Server and proprietary systems." To see a meaningful picture to support pricing decisions and other actions, all the data needs to be accessed and brought together. Once analyzed, it can be presented in a dashboard on the desktop or mobile devices such as an iPad.

The IT department built the first few deliverables, but Spotfire was also provided to users so they could extend the analyses and zero in on their unique issues and questions. Not everyone in the company performs the analytics; some are primarily consumers of the output.

"The comfort level with using analytical tools varies among our employees," Piddington says. "We use Spotfire Web Player to distribute the analytic content to a broader group of users, who can then do additional visualizations and analyses on their own."

Pricing trends

Global Partners is gradually ex-panding its use of Spotfire to new areas; for example, a market analyst in the gas station group is using it to compare the company's prices with those of competitors. "Spotfire plots the data on a map, so that users can mouse over the location and see the price at our stations, and then look at other nearby gas stations," Piddington says. "We are also in the beginning stages of looking at pricing trends over time."

"Spotfire fills the gap between traditional BI, line-of-business applications and statistical packages," says Lou Jordano, director of product marketing at TIBCO Spotfire. "It provides users the freedom to explore data without requiring help from IT. This is about making the business more agile by helping customers gain insight into the unseen."

One of the symptoms of that gap, according to Jordano, is how frequently information workers resort to exporting data into Excel. "Even in very large companies that have powerful BI tools for analyzing their operational data, people use Excel to manipulate the data," he maintains. "Spotfire complements traditional approaches by providing self-service discovery in an intuitive environment that goes far beyond what Excel can do, and users do not need to call IT to create a new model when their question falls outside the original data. They can quickly combine data sets from disparate sources, and leave IT to focus on higher-value activities."

Competitor monitoring

A large Swiss biotechnology company with sales of more than $50 billion in 2010 had an active but expensive competitive intelligence program in place to monitor the markets in which it competes. The company devoted more than 8 percent of its annual IT budget to the effort, including about $2 million to manage information sources such as the status of competing products as they move through the FDA approval process. However, a considerable amount of manual labor was required to aggregate, monitor and disseminate the information.

The company turned to clearCi to automate the monitoring of open source intelligence for one of its divisions, which develops new pharmaceuticals in Europe. clearCi is a software-as-a-service (SaaS) product for monitoring online information, including industry blogs, patents and product prices. The software is configured to crawl selected websites according to each customer's needs. A CI specialist dedicated to each customer manages the software and provides training in its use.

Cost savings

As a result of switching to clearCi, the biotech company was able to save more than $120,000 in development costs. The savings were derived from avoiding the costs of upgrading the existing software and IT infrastructure, because as a SaaS product, clearCi provides both. In addition, savings in labor time accrued from automating the previously manual distribution method the company had been using.

clearCi is designed to go beyond monitoring news media stories to provide highly specific information. "Many CI tools focus on news and keywords," says Joe Levy, CEO of clearCi. "With clearCi, we set up a custom process to crawl the target websites and extract critical competitive intelligence." For example, clearCi can detect a price change of a particular magnitude on a certain date, or report on staff changes and then return the results via an e-mail alert. It can access databases to which the customer has subscribed, logging in automatically if the databases are password protected.

"Some clients are monitoring as many as 400 websites, while others select only a few," Levy says. "Once the crawling process has been set up, users can add or remove sites as circumstances change, in addition to adjusting the criteria by which they search." clearCi also can be effectively used by both large and small firms. "Many large companies are using clearCi, but one of our clients is a three-person firm that is using it successfully to help with product positioning," Levy adds.

Research, track, analyze

AttaainCI is a CI solution from Attaain, a Telmar company, that uses a SaaS model and combines several features: access to company and industry information from Hoover's First Research and others, plus tracking and analytics. "Our unique capability is that we include real-time information from social media such as Twitter and blogs along with the profiles," says Daryl Scott, Telmar executive VP and chief digital officer. "Static profile information can get out of date very quickly, so we included the ability to mine a wide range of up-to-the-minute information sources."

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