Everybody
working in the competitive intelligence (CI) arena can tell a story
about being asked over cocktails if they are just corporate spies.
But there isn't really any cloak and dagger, even though the
field has attracted a few former members of the CIA.
"I have a CIA background, and that's the best school for training
in intelligence, so it makes it a little bit hard to tell people
that CI isn't spying," says Ken Sawka, vice president of consulting
at Fuld & Co., one of the most prominent CI consultancies, in
Cambridge, Mass. "But I make it clear that you don't do wiretapping
or paying off sources, and a CI professional mainly assesses the
external impact on a business decision."
Not Spying
So if CI isn't spying, what is it, other than watching
competitors and government regulators who might make a move that
could cripple a company?
CI has developed in recent years in many Fortune 1,000 companies
as a line of business activity, sometimes as a central unit of
researchers with marketing or accounting expertise who advise top
management. It can also involve heads of business units that meet
regularly.
CI professionals gather data and analyze it using many software
tools and systems on the market. But they also interpret the data
for upper management, affecting decisions about, for example,
whether to withdraw a product dominated by a competitor or to close
a plant that produces products that aren't expected to be
profitable.
At all stages in the CI game, the information technology
department is vital, helping coordinate information gathered from
voice mail or e-mail systems, storing it and organizing it, and
helping business units move it around for human analysis, analysts
say.
IT workers "can contribute significantly to the CI effort by
gathering information on competitors when they interact with other
IT people at conferences," says analyst Helen P. Burwell, president
of Burwell Enterprises Inc. in Dallas. "And a company's information
technology can have a great impact on how they perform."
Analysts urge IT leaders to get involved at the ground level when
a company creates a CI unit to help assess software tools and decide
which budget the tools will be paid from. IT managers are also vital
to protecting security by helping create rights and firewalls to
determine who has access to CI, analysts add.
CI Projects
Analysts say IT departments in U.S. companies are working on a
wide range of CI projects. Some are operating toll-free call-in
lines so frontline salespeople can quickly make a call while on the
run to describe what a customer just told them about pricing on a
competitor's product. Others are testing software agents that search
electronically for information.
Fuld & Co. is even working with Dow Jones Interactive Inc. in
New York to add CI analysis to Dow Jones' standard fare, said
Leonard Fuld, president of the company.
But Fuld says he worries that business managers and CIOs will
mistakenly believe that tools and customized news service
subscriptions will substitute for analysis, which must remain a
human function. "CI is a management and organizational behavior
issue more than a technology issue," Fuld says. "Technology helps,
but it's not a panacea."
When CEOs get involved with creating CI programs and the process
is given the attention it deserves, companies can gain tremendously
on competitors, according to analysts and practitioners.
Business Benefits
At Hercules Inc. in Wilmington, Del., the $3 billion chemical
firm set up a business intelligence (BI) team 18 months ago partly
as a response to its difficulty countering competing chemical
products, said Rob Sherman, manager of corporate business
intelligence. Sherman says that although he can't quantify its
value, the BI effort has definitely benefited Hercules.
"Unknowns such as the tactics and strategies a competitor might
employ to counter our new product introductions were always known to
be critical, but prior to BI, we never had a technique specifically
suited to address them," Sherman says.
With the Hercules BI team — a decentralized group of six business
unit managers who report to Sherman — analysis a year ago showed an
oversupply of a chemical Hercules and its competitors were making.
The BI team recommended the politically unpopular solution of
closing a plant producing the chemical in the U.S., and it was
quickly shut down, he said.
Because Hercules' BI team must act quickly to gather and analyze
information, its IT needs are leading edge, and Sherman says he
thinks an IT person needs to be assigned to the BI effort.
BI at Hercules has touched database integration, password
administration, access to the Internet and intranets, database
replication, server access, Web design and e-mail traffic load. "A
dedicated IT insider can make navigating this territory much easier
. . . and foresee problems much earlier," Sherman
says.
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