SLA Best Practices Ci

BEST PRACTICES IN MANAGING A CI FUNCTION

June 6, 2007

www.outwardinsights.com 2

GOALS AND OBJECTIVES

• Provide an overview of competitive intelligence, what it is and what it is not

• Description of how competitive intelligence is used within an organization

• Competitive Intelligence Usage Survey Results

• Instruction on the basics of a competitive intelligence process

• Overview of best practices from our experiences with clients in managing a competitive intelligence function


AGENDA

What is Competitive Intelligence

The Uses of Competitive Intelligence

Competitive Intelligence Usage Survey Findings

The Competitive Intelligence Process

Best Practices in Managing the Function


WHAT IS COMPETITIVE INTELLIGENCE?

Knowledge and foreknowledge of the competitive Knowledge and foreknowledge of the competitive environment — the prelude to decision and environment — the prelude to decision and action.action.

Competitive Intelligence:

The organizational means by which information The organizational means by which information is systematically collected, analyzed, processed is systematically collected, analyzed, processed and disseminated as intelligence to managers and disseminated as intelligence to managers who can act on it.who can act on it.

Competitive Intelligence Process:


WHAT COMPETITIVE INTELLIGENCE IS NOT

• Traditional competitive studies

• News clipping service

• Databases / data warehouses

• Market research

• Knowledge Management

• Unconnected pieces of data


– John Naisbitt

We are drowning in information but starved for knowledge.

“

”

CHALLENGES IN CI


CI TRANSFORMS DATA/INFO INTO INTELLIGENCE

Data Unconnected Bits Employment at the site dropped from

1100 to 950

Information Knowledge build by

looking at several data points

They implemented new labor-saving

technology

Intelligence The implications of

the organized information

This gives them th e ability to ﾉ


INTELLIGENCE IS EXTERNAL

“(I)t can be argued that the information revolution has caused managements to be less well informed than they were before . . . (T)he most important changes affecting an institution today are likely to be the outside ones, about which present information systems offer few clues.”

— Peter Drucker, “A Survey of the Next Future,” The Economist, 11/3/01


COMPETITIVE INTELLIGENCE IS NOT LIMITED TO COMPETITORS

CI GroupCI GroupCorporate Corporate Security Security ThreatsThreats

TechnologyTechnologyDevelopments Developments

& Sources& Sources

Political, Political, Economic, Economic,

& Social & Social ForcesForces

Markets & Markets & CustomersCustomers

Competitor Competitor Capabilities, Capabilities,

Plans, & Plans, & IntentionsIntentions

Industry Industry Structure & Structure &

TrendsTrends


AGENDA







USES OF COMPETITIVE INTELLIGENCE

Defensive

• To provide early warning of new competitors or disruptive technologies

Offensive

• To spot new markets or opportunities ahead of competitors

Short-Term

• To determine how a key competitor will price or position a new product or service

Long-Term

• To forecast the viability and attractiveness of a future market

Intelligence is forward-looking, predictive, and actionable


INTELLIGENCE IS ANTICIPATORY

– Wayne Gretzky

On the ice, everyone goes to where the puck is. Me? I go to where the puck is going to be.

“

”


AGENDA







CI in US Companies

71%

29% Have anorganized CIprocess

Do not have anorganized CIprocess

More than 7 our of 10 companies claim to have an organized CI function . . .

. . . But most say they do not have the means, interest, or understanding to use it properly.

Source: Ostriches and Eagles: Competitive Intelligence Usage and Understanding in US Companies, Outward Insights, February 2005

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Tactical Uses Strategic Uses

Support sales

Support newproduct launches

Strategicalliances, JVsand licensingR&D planning

SURVEY SAYS…


ROADBLOCKS TO EFFECTIVE CI

38%33%

28%20%

0%

20%

40%

60%

80%

100%

Insufficient Funding

InternalBureaucracyCI Team Lacks Clout

Executives Don'tSee Value in CI

Source: Ostriches and Eagles: Competitive Intelligence Usage and Understanding in US Companies, Outward Insights, February 2005


AGENDA







HOW TO CREATE INTELLIGENCE: THE CI CYCLE

Most corporate intelligence programs consist of four broad functions:

• Planning and direction: management and oversight of intelligence to ensure a demand-driven, needs-based program.

• Information collection: exploiting secondary and primary (human) sources for information, observations, and insights.

• Analysis: interpreting information, drawing conclusions, identifying implications, and making strategic recommendations.

• Reporting: disseminating finished intelligence products, in time, to those managers with the responsibility and authority to act on the information.

AnalysisAnalysis

InformatiInformation on

CollectioCollectionn

Planning & Planning & DirectionDirection

Report & InformReport & Inform

NeedsNeeds

Decision MakersDecision Makers

Other UsersOther Users

The Intelligence Cycle: Each step is necessary and adds value


KEY INTELLIGENCE TOPICS FOCUS THE CI GROUP TO DELIVER THE HIGHEST VALUE INTELLIGENCE

• KITs are high-level business concerns upon which management must take action

• Define KITs based on the critical decisions that must be made

• Provide direction to the competitive intelligence effort and overall strategy

• Improve the quality and timeliness of decisions; prevent surprise through early warning

Definition

Management Role

Purpose

Benefit


What are the strengths, weaknesses, and future strategic intentions of our major competitors?

What new, or non-traditional, competitors could enter our key markets?

What new technologies are emerging that could impact our business?

What are the emerging legislative or regulatory changes that could have a significant impact on our customers, products, and services?

What M&A or JV activity might be on the horizon and what are its implications for our company’s products and services?

SAMPLE KEY INTELLIGENCE TOPICS


INVESTING IN DEVELOPING ESSENTIAL CI FUNCTIONS YIELDS COMPETITIVE BENEFITS

Provides Early Warning of Opportunities & Threats

Provides Early Warning of Opportunities & Threats

Collect DataCollect Data

Prepare Report & Disseminate

Prepare Report & Disseminate

Analyze & Forecast

Analyze & Forecast

Essential Functions Primary Benefits

Supports Strategic Decision-Making Process

Supports Strategic Decision-Making Process

Supports Tactical and Operations Decisions

Supports Tactical and Operations Decisions

Assesses and Monitors Competitors

Assesses and Monitors Competitors

Supports Strategic Planning & Strategy Processes

Supports Strategic Planning & Strategy Processes


Communications

• Verbal

• Written

• Presentation

Project Management

• Planning

• Implementation

• Monitoring

Leadership & People Management

• Strategic Thinking

• Coaching

• Team Building

CI Specific

• Ethics and Legal Guidelines

• Research Planning

• Tradeshow Management

• Analysis Techniques

RECOMMENDED CI SKILLSETS


CHECKLIST OF SUGGESTED ANALYTICAL TECHNIQUES USED BY CI TEAM

Competitor and Industry Analysis

SWOT Analysis

Porter’s 5 Forces Model

Four Corners Analysis

Competitor Benchmarking

Competitor Response Modelling

WIN/LOSS Analysis

Value Chain Analysis

Forecasting

Early Warning Indicator Development

Hypothesis-based Tools

War Gaming

Scenario Planning

Financial

Financial Forensics


AGENDA







BEST PRACTICE #1: COMPETITIVE INTELLIGENCE IS ALWAYS LEGAL AND ETHICAL

Exploit newemployees forproprietaryinformation

Use illegalmethods

Compromisecustomerproprietaryinformation

Conductfalse jobinterviews

Misuseconsultantsor agents

Misrepresentourselves

We will not ...We will not ...


BEST PRACTICE #2: IDENTIFYING USER NEEDS IS CRITICAL TO THE OVERALL SUCCESS OF PROGRAM

• CI users are engaged regularly to understand their intelligence requirements

•These requirements are used to focus CI efforts and resources

• Efforts are focused primarily on issues management has identified as threatening

•But, CI has an obligation to alert management to emerging issues

• Management regularly shares its actions and decisions with CI producers


THE FLIP SIDE OF BEST PRACTICES: COMMON MISSTEPS TO AVOID

1. Failure to focus – “Get me everything you can on our competitors.”

2. Not linking CI to decisions

3. Placing the CI team too far from decision makers

4. Focusing only on competitors

5. Neglecting early warning

6. Letting ad hoc tactical requests overwhelm the CI effort

7. Confusing the intelligence function with market research or knowledge management


TO SUM UP

• Competitive intelligence is about providing actionable intelligence, not repackaged data

• Competitive intelligence is successful when it is driven by management’s top business needs and decisions

• While all organizations are different, there are some common elements to successful CI programs including: ongoing dialogue with management, a focus on Key Intelligence Topics and adherence to ethical and legal guidelines

• The competitive intelligence process should be structured around the intelligence life cycle: planning and direction, information collection, analysis and reporting


The Intelligence to Anticipate. The Strategy to Lead. TM

Karen Rothwell, Director

[email protected]

1-888-447-5501www.outwardinsights.com

[email protected]


KEY FINDINGS FROM OSTRICHES AND EAGLES SURVEY (CONT.)

Insurance differed from the survey norms in the following areas:

1. Most likely to make intelligence an integral part of its strategic planning process (100% vs. 85% norm), the best of all industry groups.

2. More likely to make CI an integral part of operational or tactical decisions such as business development/sales (86% vs. 78% norm) and strategic decisions such as R&D planning and execution ( 71% vs. 55%).

3. More likely to use CI to anticipate and thwart competitor strategies (71% vs. 64% norm).

4. Most likely to integrate likely competition reactions into plans for launching new products and services most of the time (72% vs. 40% norm), the highest of all the industry groups.

SLA Best Practices Ci

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