Building a CI team

With the economy slowing, competitive intelligence (CI) faces a mixed future. In some companies, CI activities will attain greater importance, as maintaining an edge becomes more challenging. Some companies that have never had a CI program will decide to add one. On the other hand, CI groups that are not clearly demonstrating a benefit to their organization may be among the first to be cut if resources become scarce.

High-performing CI groups earn their keep by providing essential input to the five or six key decisions made by top-level executives in a company each year. Such decisions might include making an acquisition, introducing a new product, or changing a major business process within the firm. What are the ingredients for using CI successfully to assist in these decisions?

First, the intelligence needs of the company must be correctly assessed. The right staff must be on board and used effectively. Information must be collected and analyzed. Finally, the analysis needs to get to the decision makers in a timely fashion. The steps are straightforward, but not necessarily easy. For example, looking carefully at a company’s real intelligence needs can be difficult when the company is scrambling for information because its market or competitor mix has changed abruptly.

“Companies often have trouble formulating the specific questions they need to ask,” says LuAnne Farrah, president of Mark Farrah Associates, a market research firm specializing in CI in the healthcare arena. Sometimes the questions are too general, such as, “What is our competitor’s strategy?” Another downfall of CI is allocating too much time to collection, and not enough to analysis, Farrah says. In addition, senior executives are often hesitant to disclose confidential information to someone not at the executive level. “They may not want to include CI staff even though the analyst would bring critical insights that would lead to better decision making,” she says.

Another mistake made by CI departments is to spend too much time profiling competitors. “The question is not so much what the competitors are doing,” says Peter McKenney, CEO of Cipher Systems, “but where the opportunities are.” After all, maybe the current competitors are not headed in the right direction either. He advises companies to seek out creative ways of monitoring the market.

“Microsoft is always gathering information through its partner programs,” says McKenney, “looking at 30 to 40 market segments that could become big, and watching for an uptick that indicates a growth spurt.”

McKenney agrees that too many resources are devoted to collection, at the expense of analysis. Building a repository of information may be comforting, but does not necessarily answer the key questions that allow a company to make the best decisions. “One good strategy,” he suggests, “is to look at where your company is making its biggest profits or a unique contribution, and assess vulnerabilities there. Indicators can be put into place as alerts.” The concept is similar to using patents to protect only key aspects of a technology or process, rather than trying to cover the waterfront. That type of targeted assessment can be done effectively only if the analysis phase of CI is done well.

Despite those challenges, companies that want to enhance their CI functions have a variety of options for addressing needs assessment, staffing, information collection, analysis and dissemination. Outside consultants can provide an objective look at a company’s intelligence needs and offer advice. Whether the assessment is carried out by consultants or conducted in house, it must be guided by the business strategy.

“Structure should follow strategy,” says Paul Houston, president of Results Management Consultants in Denver, Colorado, a consulting company specializing in recruiting CI staff. The needs assessment should help define the issues that should be monitored on a regular basis, and should also be revisited periodically to adjust to any changes..

Staffing should fulfill three functions: requirements collection, information collection and analysis. The requirements collector is the interface between senior management and the CI staff. He or she must have the trust of senior management and be able to communicate well with both sides. Input for those five or six important decisions to be made by top management must be formulated into questions, and the requirements collector should be able to help the executives articulate them. A well-chosen person in that position can draw in senior management and help address the issue of confidentiality. For example, the requirements collector could formulate appropriate questions about a competitor without indicating a specific purpose.

When building a CI team, employers sometimes have to choose between an individual with business experience and one with intelligence experience. If so, lean toward the one with intelligence experience. “True decisions are made at a very senior level,” says David Weliver, VP of professional services at Knowledge Jobs. “These individuals have a lot of business savvy. If you need to make a choice in selecting CI staff, it’s better to select the intelligence background over business experience.” The business expertise will come into play when top management goes through its decision process.

Another question is whether experience in the specific industry is essential. “About 80% of my clients insist on industry-specific experience,” says Paul Houston. “But most CI individuals are quick studies and can pick up the dynamics and vocabulary of an industry relatively rapidly.” Those firms that are flexible on that point can get a fresh perspective, some synergy from other industries and often an out-of-the-box approach.

If a company has a CI group, both information collectors and analysts will be on the team. Online information collectors typically come from a library background. Human source collectors and analysts come from a variety of different fields, including military intelligence. A good analyst is generally curious, tenacious and intuitive with a knack for seeing patterns in information. Smaller firms may have only one individual serving both functions, or even a marketing person doing CI as a collateral duty. In that case, membership in the Society for Competitive Intelligence Professionals can provide access to educational programs and seminars that help fill in gaps in the individual’s background. SCIP also lists colleges and universities that offer courses and certificates in CI.

One way to reduce the time spent on information collection is to use online information services that do more than surf the Web. Many companies are using services such as OneSource and Northern Light to improve the quality of the information they acquire. OneSource’s Business Browser has components such as Company Profiler, Watch List Update and Industry Profiler that present filtered information targeted to user needs. OneSource also has developed a database on privately held companies, a group for which information is often hard to find.

A service from Northern Light called RivalEye integrates content from the Web with materials selected by professional editors. Rival Eye selects from among 7,000 full-text journals, trade publications and news sources. TECO Energy implemented a Northern Light application in order to keep up to date on energy issues. A top issue right now in the energy industry is deregulation. TECO is watching industry dynamics such as power shortages and generating capacity, as well as evaluating the implications of rulings by the federal Environmental Protection Agency. Since TECO Energy is an integrated energy company with coal, coalbed methane, and natural gas sources, the company is also on the lookout for partnering or other business opportunities.

"We wanted a product that would allow us to combine Internet information with traditional news media and Northern Light's archives," says Pat Boody, administrator of business information services at TECO. "We have not found anything else that will allow us to do this."

Working with Northern Light, Boody explained TECO Energy's information needs, which were translated into queries. TECO Energy staff had identified an initial set of Web sites of interest, and Northern Light sought out others. The Live Query feature runs those defined queries to pick up new information. The information comes back in an organized fashion, ranked by relevancy and placed in a folder. Many of Northern Light’s customers also use Live Query as the basis for Search Alerts, which notify staff immediately via e-mail when new information on a topic is available.

For analysis as well as dissemination, a combination of human skills and technology can leverage information. Cipher Systems offers a CI solution called Knowledge.Works that is based on Lotus Notes or Microsoft Exchange platforms. The workflow capabilities are enhanced by the use of messaging, which improves collaboration and coordination of CI activities. In addition, Knowledge.Works integrates Sametime and NetMeeting, and has tools such as a text summarizer and an extended search capability that merges internal and external data sources. Knowledge.Works can scan information on a routine basis, and flag items of interest or respond to specific inquiries. The product also has a resource management component that helps a CI manager oversee progression of a project. For example, the manager can tell who is assigned to a question, determine its status and assess the level of difficulty.

Other leading CI platforms include Wisdom Builder’s analytical tool, Wisdom Builder Desktop, and Wincite Systems’ database application, Wincite. Wisdom Builder imports data directly from numerous standard formats, analyzes content and disseminates reports. It provides tools for exploring relationships in the data as well as for visualizing the results. Wincite, described as a knowledge management system, also has importing, analysis and distribution capabilities. It also includes templates typical of the intelligence needs of various industries that help speed implementation.

A well-designed and implemented CI program can pave the way for a company to thrive even in hard times. Resources, both human and technological, are available to help companies make the most of the information that’s just a mouse click away.

CI resources Society for Competitive Intelligence Professionals, professional society, publishes several magazines on CI, has annual meeting, offers networking through local chapters, educational opportunities and job marketplace.

“Competitive Intelligence,” Larry Kahaner, Simon & Schuster Trade, 1998.

“Millenium Intelligence: Understanding and Conducting Competitive Intelligence in the Digital Age,” Jerry P. Miller, Information Today, 2000.

“The New Competitor Intelligence: The Complete Resource for Finding, Analyzing, & Using Information about Your Competitors,” Leonard M. Fuld, Wiley, John & Sons, December 1994.

Cipher Systems, provides CI software, training and consulting services. Its Web site contains eight “webinars” on selected topics and other resources. A slide show can be downloaded for each talk.

Competitive Intelligence Resource Index, a search engine and listing of CI resources, including information sources and vendors of CI services and products.

Fuld & Company, a leading consulting firm in CI. Among the resources on its Web site are links to more than 600 intelligence-related Internet sites.

Judith Lamont is a research analyst with Zentek Corp., e-mail jlamont@sprintmail.com.