Competitive intelligence (CI), is a systematic process that uncovers, collects, synthesizes, and uses data from various sources (usually public) about customers, competitors, pricing, and other market elements for the main aim of enhancing a company’s competitive advantage. According to research published in Information Management Journal, 90% of the information a company needs to understand its market and competitors and to make key decisions is already available in the public domain. However, it is also true that most competitive intelligence efforts by companies fail before actually beginning. The reason behind this failure is often a topic of debate in competitive intelligence circles, but most experts agree that it goes somewhat like this:
- A competitive intelligence program or process is implemented reactively to a market event, without proper planning
- It rapidly becomes unmanageable (reasons for this will be discussed later in the article)
- It rarely delivers meaningful insights to stakeholders
- It becomes obsolete and isn’t used until the next market event
- And thus, this cycle continues until the competitive intelligence process (and competitive intelligence in general) is deemed useless and discarded
According to a recent survey, an astonishing 55% of stakeholders do not even look at all the intelligence that is sent their way. No wonder so many CI efforts fail.
Competitive Intelligence Isn’t Flawed, But Its Implementation Often Is
According to numerous studies such as this one by Emerald, more than 90% of Fortune 500 companies use formalized competitive intelligence and are pretty successful in their CI endeavors. And, it has nothing to do with their size, small and medium-sized enterprises use CI successfully too. Just look at this article by American Express where small and medium business owners share their CI success stories. So, what’s their magic formula, and can it be replicated?
Of course. Two things dramatically increase a company’s chances of successfully implementing, sustaining, and making the most of competitive intelligence. One: a formalized competitive intelligence process, and two: a competitive intelligence software, tool, or platform.
First, let’s have a look at the reasons why most CI efforts fail, i.e. what you shouldn’t ideally be doing, and then, we’ll understand what you should be doing to succeed with competitive intelligence.
Common Reasons for Competitive Intelligence Failure
Broadly speaking, competitive intelligence failures are a result of either flawed planning or flawed execution. First, let’s look at what flawed planning looks like with regard to competitive intelligence.
Competitive intelligence failures attributed to flawed planning
1. Lack of conceptual understanding of competitive intelligence
Competitive intelligence is not well understood in most organizations and, therefore, its value is not well perceived by senior management. The lack of conceptual understanding of competitive intelligence usually results in ad-hoc CI processes. This decimates its effectiveness right from the start.
2. Lack or inadequate positioning of the competitive intelligence function
In most organizations, competitive intelligence is not a department or function. Usually, an individual from a function such as marketing, product, or sales is assigned to this task. Lack of skills and capabilities leads to the inability to produce intelligence, and insufficient use of appropriate methodologies.
Even if there is a CI function, it is isolated from the focal organization which prevents it from being an essential component of strategic decision-making processes. This prevents employees from contributing or gaining from its practices.
3. Lack of support from the leadership
A lot of times, the leadership and/or senior management do not perceive competitive intelligence findings to be valuable enough to drive the strategic and decision-making processes. A lack of support/recognition from the senior members of the organization transfers to all employees and pushes the CI process into oblivion.
You can learn about how to plan and design a competitive intelligence process in this blog. Now, let us look at the mistakes in execution that companies often commit.
Competitive intelligence failures attributed to flawed execution
1. Collecting data manually
CI professionals understand that gathering relevant business information manually from the internet is a losing battle. The amount of information available on the internet is growing exponentially and will continue to do so. Attempting to manually gather and subsequently failing to comprehensively capture this data handicaps any competitive intelligence efforts before any analysis even begins. Information richness and the amount of publicly available information means that more time is needed to search for information, which reduces the time that can be spent on information analysis. Manual collection of information impacts the data collection phase of the competitive intelligence process, which leads to the collection of inaccurate and outdated information. Thus, when it comes to collecting and organizing business-relevant information, an automated competitive intelligence software dramatically outperforms humans.
2. Problems storing, organizing, and accessing data
Stakeholders complain that they are not able to find relevant intelligence on time, because it is stored away in silos within the organization. The data analysis phase of the competitive intelligence process is important to produce intelligence and insight, which is used in decision making, therefore, more effort has to be directed to this phase. A lack of competitive intelligence software disrupts the competitive intelligence process here as well. A competitive intelligence platform like Contify not only automates the collection of intelligence but provides a centralized repository for the same, where the collected information is organized and can be accessed by any stakeholder at the organization.
3. Distributing personalized intelligence to the right audience
Different functions need different kinds of intelligence to make informed decisions. For example, marketing needs CI to monitor market trends, customer expectations, emerging technologies, disruptors, and changes in their industry to better position themselves. Sales need it to find opportunities for business growth and to improve their sales pitches to win more deals. Strategy needs it to make strategic business decisions with confidence, armed with actionable insights and research, and thus, enhance time-to-market, market-entry, and market defense capabilities. Product teams need it to view and create product roadmaps based on competitor and customer profiles, track emerging competitors, and understand competitor products and business models.
The software that is powering the CI process should be able to distribute intelligence that is personalized to different functions, teams, and individuals. In addition, the software should capture the usage analytics to understand what users are reading so that intelligence collection and curation can be further optimized.
Conclusion
Competitive intelligence has emerged as an essential business activity for companies, regardless of whether they are large enterprises or small and medium enterprises. As mentioned before, a well-defined competitive intelligence process and a competitive intelligence tool or software are now required to ensure that you don’t waste time, effort, and resources in flawed competitive intelligence efforts. In addition to automating your CI collection efforts, and offering a centralized repository to store, organize and access data, a competitive intelligence software offers a number of advantages, such as the ability to create real-time dashboards, track competitors’ websites, upload internal content such as field intelligence, reports and presentations to share across your organization, and foster collaboration between stakeholders across the organization. This enables stakeholders and leaders to make higher-quality decisions backed by robust insights, helping organizations to outperform their competitors.
