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E-businesses without CI are like ships without radar lost in fog -- Competitive intelligence software applications

Competitive intelligence (CI) is fast becoming a strategic imperative to move ahead, stay ahead or simply compete in the e-business marketplace.

GartnerGroup defines e-business as the integration of business strategies, processes and technologies that focus on breaking down the barriers among business divisions and enterprises. As we enter 2000, the need for systematized CI systems is greater than ever. And while most organizations gather competitive information, few enterprises have adequate CI in place; they need a system for analyzing and integrating it into their formal business strategy.

I've been talking with representatives of some CI software vendors, as well as more traditional KM systems companies providing CI applications within their broader portal frameworks. Those I have chatted with had a great deal to say about their philosophies of CI in particular and KM in general. Their approaches differ widely, but all of them have at least some degree of focus on the processes required to overcome the business problem--in this case, to better understand business rivals that potentially threaten a firm's market position, customer relationships and value chain for stakeholders.

Many CI practitioners have built intranet systems of their own to collect, process, help analyze and disseminate mission-vital CI to their constituents. Those systems, because they're home-grown, tend to be as various as the number who have built them. One positive aspect of do-it-yourself CI systems is that they're often based on what's needed to accomplish business objectives. It's much more costly to deploy a system from scratch than to buy one and have it installed, but the advantages of focus and specificity are strong.

Any data, anywhere

When I spoke with Mark Demers, VP of marketing at Excalibur Technologies , about the CI philosophy behind its flagship product RetrievalWare Version 6.7, he said, "KM is not something you buy in a box--it's about people, processes and technology. On the tech side of things, one of the most critical enablers is knowledge retrieval--intelligent, search-based applications as part of intranets or online e-commerce apps that give a single point of access to any data, anywhere. Knowledge doesn't exist in structured data repositories--it's in mostly unstructured repositories--such as images and video--as well as text documents and people's skill sets. Excalibur's main goal is to provide unparalleled, accurate search across all of that data."

To index the complex search criteria necessary for image and video files, rather than using metadata tags to search keyword densities, Excalibur uses video deconstruction for indexing by elements--like an image storyboard for scenes in the video and voice text, plus closed captioning for content--which is then searchable. With regard to subject matter experts, there are two methods of support--one called the "knowledge contributor," a desktop applet to contribute documents and extrapolate fields of expertise for particular users, and an experts directory, which combines personnel profiles with knowledge contributor results inferred from the user's desktop.

CI theorists have long believed that as much as 80% of what a firm needs to know about its competition is already present within the organization. Assuming the other 20% is external, Excalibur includes search indexing of external information sources as well.

"Multimedia spidering and external indexing of the Internet can be set up as a service to monitor things outside of the organization," Demers said. The application includes tools for building a lexical approach to federated search and context. Intelligent agents, which Excalibur calls "profiling," can be saved as a category against the whole document base--providing persistent updating of a search or the saving of queries in a profile that can be added to as new information becomes available. Categorization of information makes it possible to exclude a great deal of manual intervention--because of the semantic network and thesaurus.

In conversations with other CI professionals, I have discovered that RetrievalWare is used fairly widely in CI applications.

EWatch.com monitors content that appears on the Internet--public discussion in Usenet, message boards on commercial online services, popular finance sites, obscure Web sites (such as rogue or activist sites for disgruntled employees), competitor Web sites, along with 1,200 Web publications (global/national newspapers and magazines, broadcast Web sites, etc.).

James Alexander, VP of sales and marketing at EWatch, said, "In the CI area, Excalibur is used as the profiling mechanism, scanning the content as it comes in through the areas they target--specific competitor Web sites with specific words or search criteria, key executives names, product names and so on. The delivered product is a digest of the monitored services. If you can identify problems where products are being discussed, you can exploit the problem or introduce a solution."

How to make the content relevant is the problem that Excalibur solves for EWatch. It flags pieces of information that match the Excalibur profiles and hands them off to an Oracle back-end database for storage.

Peter McKenney, managing director of Cipher Systems , said that competitive intelligence is becoming an essential component in companies positioning for a new millennium of e-business.

McKenney said, "Andy Grove (Intel co-founder and chairman) said, 'Five years from now, all companies will be Internet companies, or they won't be companies at all.' Beyond the high-tech hype, there is much truth in this statement. He is talking about e-business. Mere e-commerce pales by comparison to e-business, according to every analyst who studies the trends and every moneyman who invests in it.

"Why? Because e-business has a very good chance of fundamentally changing the way companies operate--going way beyond simple electronic selling, deep into the processes and culture of the enterprise. E-business will dramatically lower costs across supply and demand chains, allow customer service to rise to a higher plane, create new revenue opportunities and redefine business relationships."

McKenney continued, "This rings true not so much because firms will adopt e-business for the opportunities it presents. E-business will be adopted by all firms because they will have to. Competitors will force them to do so. Competition will drive e-business more than anything else."

The least return on investment is offered by market awareness building, which is where the majority of the portal companies in the market are focused, creating a single site that unifies competitive information that can be filtered for the desktop environment in the form of enterprise portals (general information), workgroup portals (a set theme that's defined around an issue) and personal portals (customized with the view individuals are most interested in).

The greatest return is offered by key decision support, when the CI group is pulled in from the beginning for the planning and execution of a business initiative of some kind.

Knowledge.Works, Cipher's CI application, enhances the process of gathering and sharing intelligence in an organization, McKenney said. It's used for key decision support, tactical response and sharing knowledge, and marketing awareness.

"A large energy utility used our software to affect favorable deregulation legislation," said McKenney. "A 35-person team within the CI component focused on understanding the positions of all of the actors in the legislation and making sure that company resources lined up with where competitors, customers, municipalities and special-interest groups were putting theirs. This was a process driven from the top of the firm.

"The first time around, they killed the bill, but Wall Street knew a bill was coming regardless, so their stock took a beating. The company found they needed to get a bill passed--but it had to be the right bill.

"They used a legislative translation service to transcribe committee meeting notes, and then Knowledge.Works was set up to pull the notes right from the firm providing the service, rather than waiting for the public version of those notes to come out a week later. This helped route and interpret the points of greatest interest in the notes. The next day, they'd go into the committee room and provide the technical and marketing points developed as responses to influence committee members' decision making."

Don Smith, president of Wincite Systems , is perhaps the longest established CI software vendor, having originally deployed a DOS-based client-server CI application in the late '80s. Known as Incite, it later became Wincite in the Windows environment and eventually gave way to Web-based technologies built around Active Server Pages using the browser as the client. Today, Wincite is optimized to be adapted for CI or used broadly as a marketing information system; it organizes information from a number of different sources in line with a specific business operation--whether it's free-standing or part of a larger corporate structure.

According to Smith, "Competitive intelligence in the past has always been centralized in a corporate or centralized environment. Now systems allow distribution to the extended enterprise. Central repositories of information are important, but they must be contributed to from a number of different sources. If, for example, the core information is provided by the CI/CA staff at a central location, then feedback will not come back from sales unless the pump is primed by information given to those sales personnel. The CI system must provide an incentive and a willingness to participate.

"A CI system also has to have collaborative capabilities. Traditionally, this has been centralized through the gatekeeper. Still, the collaboration side of KM has been vastly overstated in the past. Intelligence gathered by the front-line personnel is often never given feedback from higher up the corporate ladder in terms of its value. The lack of a solid frame of reference is what we call the 'black hole effect.'

"Now that Y2K has been conquered, the emphasis will shift from transaction systems to more of the analytical side of the value chain of what is being sold by companies. CRM is part of that, ERP is part of that--we're making our people 'smarter' and doing it for the customers' benefit. Now that Y2K is behind us, there's not a lot of managers feeling good about the return they got on their ERP upgrades. So they're looking for better payback to the customer relationship. In terms of CI, it's moving out of the librarian area and into an enabling system that networks throughout the whole organization--pull on the part of the user rather than push on the part of the CI staff."

The Department of Defense uses Wincite to develop strategy on large government contracts--providing context, in terms of the history of the relationship with the defense buyer and political influences, and analysis of comparisons with other competitors. All this happens before an RFP is ever issued. Then they do a post-award audit of the sales process to isolate best practices in both winning and losing deals.

The biggest challenge for any CI application is to create a system that is scalable to sophisticated features, while promoting the analytical side of the process.

"Very visible interfaces force discipline in using the raw information to create meaning, which is what CI is really all about," Smith said. "There's also strong support of benchmark reporting--products and competitors on one axis and then features and strengths on another; you can begin to see where the gaps show up."

The most important features of the system are its ability to automate the creation of visual presentations for management, said Smith. "It's the primary means of communicating from a strategic perspective the importance of the knowledge available--give them one page of conclusions and recommendations, and retain the sources of information behind it--the presentation really spells out the decision making in terms executives can understand," Smith said.

Said Matt Kelly, business development manager for Strategy Software , "Strategy is a competitive information management system, and the word 'intelligence' is left out intentionally. Intelligence is something created by people, not software--it's only built on information.

"Our software gives people a framework for tracking and outsmarting competitors--for sales and marketing personnel, as well as strategic planning in the macro view. Research for its own sake is of little value; it should be directed toward a specific decision. What this allows one to do is to preserve previously completed research."

One new feature allows a company to create a benchmark template quickly for a graphical representation of numerical information.

"We'd like to see CI demystified as a normal part of doing business rather than a complex, specialized function done in the short term," said Kelly. "It's really longer term and can reflect perspectives as they change over time. Because it's a database app, users can disseminate competitive info for quick victories for CI managers and directors."

That is often a critical component, especially for new CI units that have a short period of time in which to prove their worth.

"People expect software to allow ordinary people to do extraordinary things," Kelly said. "When that's possible, the whole knowledge management effort is more successful."

The solution is complementary to other applications, according to Kelly.

"KM brings together keyword hits, CI gives meaning to the results, so we have here a database that allows us to pull out specific nuggets of information that support the analysis primarily, but tie it back to the source materials," Kelly explained.

For example, a manufacturer of forklifts deployed a system in which its salespeople can pull up the interface with detailed information about a competitor's offering or a strengths/weaknesses rating of product comparisons--to generate a sales strategy for that prospective customer. It provides sales personnel a zero-to-five rating scale, which lets sales defend value based on the needs of customers, giving them the ability to stick to a price vs. discount to get the sale.

The most important features of the software are ease of use and quick implementation time, which Kelly said gives administrators the ability to put up a CI system in an hour.

He added, "The pace at which businesses are able to enter new markets is very quick and barriers are low. CI plays an important role in making sure that you're first to a given market niche, but it'll also determine whether your product is superior in that niche. And when the time comes, CI will give you a strategic advantage to determine what to do when that product niche becomes mature--as it inevitably will.

"Companies ignoring CI are like ships in the fog operating without radar. Companies should be doing CI even if they're doing it badly--it's less important that people are doing it in a world-class fashion than that they get started doing it. Work on getting better later."

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