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Sounding off on CI

This article appears in the issue February 2004 [Volume 13, Issue 2]

Arik Johnson, managing director of the competitive intelligence (CI) consultancy Aurora WDC, had the opportunity to interview three CI professionals about the challenges, opportunities and future facing CI. The three included Brian Bonazzoli, director of strategic business intelligence at Hewlett-Packard ; Diana Mastel, director of operational efficiency at Toys "R" Us; and Wayne Rosenkrans, director of intelligence affairs at AstraZeneca pharmaceutical company. The three were members of the conference faculty at Frost & Sullivan's 10th Annual Executive Summit in Boston on "Structuring Competitive Intelligence for Greater Bottom-Line Impact."

Johnson: Is CI still as important as we once believed it was? And does management still think so, in light of all of the cost-cutting that's been going on in CI units lately?

Mastel: CI is even more important now than it has ever been. This is because throughout today's companies, in almost every industry, business units are expected to produce greater results with fewer resources. This means that cutting the corners that don't add value becomes even more important. We anticipate that any intelligence that can provide better guidance on how to execute proven strategies and avoid the pitfalls of others will be a valuable business resource in all constrained industries, but particularly important in capital-intensive enterprises such as technology, manufacturing, pharmaceuticals, retail, etc.

Rosenkrans: These are two very separate questions really. Is CI still as important? Yes, absolutely, perhaps even more so. In uncertain economic times, a cogent understanding of all the environmental factors impinging on a business is essential to effective strategic positioning. Competition can become cutthroat, and the merely reactive company rarely comes out on top.

Does management still think so? The real question is, did they ever think so to begin with, or were they merely tolerant of a novel idea because they could afford it? Except for the truly enlightened, and they are very rare, most management will fall back into their comfort zone when under the stress of budget and headcount cuts. That means back to basic management tools, risk aversion, tactical responses and reliance that the status quo will continue. CI is about pushing the organization forward. If all you feel you can do is tread water, then you have little use for strategy, which means you have little use for CI. CI can be a way out of the danger zone, but most managers, being intrinsically tactical and operational by nature, can't (and I do mean can't, as opposed to won't) see it that way.

Bonazzoli: From an information technology industry point-of-view, I'd agree that CI is more important and relevant today than ever before. Every IT partner and competitor we have studied over the past year has been fighting for one thing--profitable growth. This struggle has led companies to seek growth in adjacent markets and, as a result, former partners can suddenly become competitors. Another consequence of the slowdown in IT spending is that when markets mature and industries are fragmented, consolidation typically occurs. We are seeing this in many areas of technology today. The result of this consolidation could totally change a firm's competitive landscape with little warning. Understanding and preparing for likely changes in a firm's competitor and partner landscape is a critical CI function.

Johnson: What topic did you choose to speak about and why'd you select it to present at the [Frost & Sullivan] conference in Boston?

Bonazzoli: I chose the topic, "Meeting the CEO's Wants and Needs from CI and MR" because it is an issue we deal with every day and I know we have developed some creative solutions. I believe the topic is relevant to all CI professionals whether they are trying to meet the needs of their CEO or a head of a business unit or a group within a business unit. It's important to distinguish his or her top priorities whether or not you have direct contact.

Rosenkrans: My topic ("SEW as You Reap") is about CI's role in long-range strategy creation. Given my answer to the above question on management's views, this may seem like an academic exercise at this point. But I firmly believe that for my company and industry, we must do this or we won't survive as the company we recognize today. If the audience could take this back to their companies, and avoid the bunker response to the environment, it would be good for all, and for CI as a profession.

Mastel: [I spoke] on the topic of how to ensure consistent valuable results in CI. From past conferences I've attended, it seems like people tend to focus on how to build bigger budgets and bigger teams. I have, however, come across a number of seasoned practitioners who recognize that no matter what the size of the project or the resources allocated to it, the best way to ensure vitality of your CI organization is to deliver actionable results that lead to success for the division or business unit. Without a comprehensive framework for defining and addressing the issue at hand, the CI function will find itself biting fingernails hoping that their calculations and/or their sources were right. With a framework that structures the problems and brings the clients along in the thought process, the team delivers better answers that ultimately deliver a more valuable service to the company. This service can eventually define its own budget, based on the consistent demand divisions and business units have for quality work that leverages their constrained execution dollars.

Johnson: Have you recently seen anything interesting in your industry that's causing you to rethink your company's strategy or operational focus? What's CI's evolving and ongoing role in directing the company and helping it compete more effectively?

Bonazzoli: There is a shift underway in the role of information technology in the enterprise. It's an evolution in how IT is architected, managed and operated--one that will enable companies to respond and take advantage of change. CIOs are forging a tighter link between business processes and the IT infrastructure that supports them. They are evolving their current IT infrastructure so that it can deliver reliability, stability, speed, agility and a better return on investment. This shift is the reason behind HP's adaptive enterprise vision, strategy and offerings in the marketplace.

Our role as a corporate business intelligence function is to provide HP's senior executives with an educated view about where the IT industry is headed and where each of the market movers in the industry is going. In this way we are providing our executives a better context in which to make HP's critical corporate strategy decisions. In other words, if our executives decide to focus HP in a particular direction, they will be armed with information as to where the industry is going and where each of HP's competitors and partners are moving with respect to this new direction. They will also know the industry market movers' likely reactions to HP's shift.

Rosenkrans: The pharma industry is in a downward spiral of cost-containment, diminishing R&D productivity and increasing demonization by society. The end game of these forces is not a pretty picture. We've had to take a careful look at our strategies in light of these factors. CI is at the forefront of telling that story to management and helping them to evaluate strategies through the lens of the environmental future.

Johnson: What do you feel are the two or three key issues in CI today and moving forward--both from your perspective and for the profession as a who


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