The new competitive intelligence: Raising the confidence quotient
Competitive intelligence (CI) has attracted plenty of attention recently because of the explosion of information publicly available now through blogs, wikis, text messages, e-mail and other electronic communications, which form the basis for building meaningful competitive intelligence.
David Carpe, founder and principal of the competitive intelligence firm Clew, calls the growth in publicly available information the biggest change in the industry over the last few years. According to a report by Technorati (technorati.com) earlier this year, the number of blogs, for example, grows by more than 75,000 each day.
Sometimes competitive intelligence is confused with business intelligence. (See business intelligence article also in this issue.) Carpe explains, "The difference between business intelligence and competitive intelligence is that business intelligence relies on quantitative information, while competitive intelligence relies on qualitative information."
Uncovering qualitative information involves communicating with people within a company about the facts being sought. Carpe says, "We'll call the employees of the competitor--people who are knowledgeable--then engage those people in a dialogue. We may be in conversations with several people to gain insight."
Other people define business intelligence as information from within one's own company, and competitive intelligence as information about a firm's competitors.
Arik Johnson, managing director of Aurora WDC, a consulting firm that specializes in CI, says, "CI today is a niche a mile wide and an inch deep, focused on understanding why companies win or lose, while also trying to predict the signals of such competition going forward. BI is an inch wide and a mile deep."
Johnson calls both CI and BI part of the knowledge management intelligence mix, which, if done properly, provide knowledge "a mile wide and a mile deep."
Companies today are attempting to "leave no stone unturned" when it comes to competitive intelligence, Johnson says, so they are searching through all available information, as well as doing qualitative research not only to determine where competitors are today, but also where an industry is going in the future.
"It's all about making more confident, less risky decisions," Johnson says. "It's all about determining market trends, customer needs and how you are set up to meet those needs."
Blogs and other readily available content reveal public information that many companies would rather not get out. For example, a Google employee unveiled his compensation in a blog, thereby providing information that a competitor could find useful in establishing his or her own strategies. Google fired the employee, according to Carpe, who adds that there are other instances in which employees offered trade secrets through blogs and auction sites.
Social networks like MySpace and Facebook and business networks like LinkedIn are also expanding sources of information, including employees, current and former executives and others who have valuable insight regarding a company's information, Carpe says.
Sorting information for trends
Technology is essential for combing through that explosion of information to find key words, phrases and other pertinent data to analyze corporate intelligence. Says Chris Buckingham, president and CEO of QL2 Software--a data integration company that provides software used in competitive intelligence, "There's a greater realization among companies about what these tools can do. Before, companies would be sitting on an island surrounded by scads of information; now they have some tools to help them sort through it." For example, if a pharmaceutical company employs QL2 Software, it will search blogs, Web sites and other