CI tools enable more confident business decisions

Implementing competitive intelligence systems

Everyone agrees that there is plenty of information out there. But finding the right information and getting it to the right people in time for them to make the right decision remains a challenge. It will probably always be a challenge, but more tools and techniques designed for collecting, disseminating and analyzing information are now available to help smooth the path from the chaos of information to a confident decision.

Developing a competitive intelligence (CI) system poses particular challenges. Formulating the questions to be answered can be difficult because doing so often requires input from busy top management. A major source of valuable information, namely the competition itself, often does not want it revealed. But with planning and persistence, many organizations have developed effective CI systems.

The chart illustrates two main research techniques, direct and inferential, and two main applications for competitive intelligence, tactical and strategic. Direct research relies on timely and accurate information retrieval to answer either short-term tactical or long-term strategic CI questions. For example, how many similar contracts has a competitor won? Inferential research is more subtle and more sophisticated. Looking at a competitor's patents and predicting the likelihood of its gaining marketshare requires integration of inputs from multiple sources.

The chart illustrates explicit information, but the types of research and applications apply to tacit information as well. Tacit information such as that held by staff can be either direct or inferential. For example, an employee might know of contract awards (direct) or hiring plans (inferential, through which one can infer expansion plans), although the information may not have been published anywhere. That tacit information might, of course, relate to either tactical or strategic planning.

Taming the Web

Thanks to the Web, we now have immediate access to vast amounts of data, including vast amounts of irrelevant data. To help overcome that, NewsEdge (www.newsedge.com) offers a customizable news filtering service that delivers personalized business news via E-mail and browser. Among the options is NewsObjects, which integrates news into workflow applications. For example, news about a particular customer can be integrated into a sales force automation (SFA) application. Timely information can make a big difference. In one recent case, a consumer products company discovered via NewsEdge that a major chemical plant from which the firm (and its competitors) obtained a vital ingredient for its products had been taken offline by an explosion. The company quickly moved to lock up the alternate supplies.

An innovative service for delivering context-sensitive searches is provided by Aeneid (www.aeneid.com), which is used in the Web sites of such companies as Red Herring (www.redherring.com). Aeneid has developed a series of professional catalogs containing 2,000 business sources and several million documents that are incorporated into vertical portals such as those of high-tech firms and financial services. Those catalogs form the basis of Aeneid's EoCenters (www.eocenter.com), which ensure users of relevant hits from their searches and fill the data gap that results from the inevitable limitation of content on any given Web site.

Dan Putterman, CEO of Aeneid, said, "We are passionate about context-sensitive information. It's the only way to get meaningful results from searches." An interesting aspect of the service is that it is free to the Web sites that implement it, receiving instead a portion of the advertising income generated because of the heavy traffic at the site.

Intelligent management of CI

Once you have successfully collected the sought-after information, the next step is to make sure it reaches the right people. BackWeb (www.backweb.com) offers a suite of products for disseminating news throughout an enterprise. That can include information from intranet sites, databases and even video clips. Through BackWeb Foundation, messages can be delivered with different levels of urgency, ranging from a flash that indicates a message has arrived to an interruption that prevents the user from continuing until the message has been viewed. As part of its "polite" communications, the product can also adapt to match the level of network traffic-for example, by delivering messages to a user only when network bandwidth is available. An API allows integration with other communications applications. BackWeb Foundation is priced at just under $200 per seat.

IntelAssist and KnowledgeWorks from Cipher Systems (www.cipher-sys.com) help CI professionals gather, organize and disseminate information by working with Lotus Notes (www.lotus.com) or Microsoft (www.microsoft.com) Exchange respectively.

Alcan Aluminum (www.alcan.com) found that it had plenty of documents about its competitors but had no mechanism for sharing the important relevant knowledge held by its own staff. Alcan identified technological innovation and cost reduction as two key areas of competitiveness in the aluminum industry and wanted to track information in those areas. The company also wanted to identify areas of threat from competing products (plastic bottles, for example) and opportunities to make inroads into other domains (finding more uses for aluminum in automobiles).

Using IntelAssist, Alcan implemented a Lotus Notes application that makes use of the company's existing documents and also provides a way for employees to share their knowledge. Since the system operates on a workflow model, it can also issue and track tasks and provide an audit trail for decisions. Finally, the system lets senior management set issues and communicate about them throughout the enterprise.

Jim Richardson, VP of sales at Cipher, pointed out an important but often overlooked aspect of CI: No matter how much or how good the information you have collected, one of the most critical parts of the process is putting the pieces together. The information itself is not an answer or a decision. Formerly director of CI at SAP Americas (www.sap.com), Richardson had some discouraging though enlightening experiences with other CI products that required extensive cutting and pasting of data into fields.

"If maintaining the CI system becomes too labor-intensive," he said, "it will either not be cost-effective or it will not be used. You need to streamline the CI process itself for it to work."

Patent analysis in CI

Skillful analysis of patents can reveal a great deal of useful information, particularly when aided by graphics that help visualize technological and business relationships. Aurigin's (www.aurigin.com) Intellectual Property Asset Management (IPAM) System contains U.S. and European patents along with a set of tools for analyzing and visualizing them. The product is designed to integrate with other applications, allowing connections to databases and documents.

One firm trying to decide whether it should divest a particular business activity used IPAM to analyze and group its patents, and then searched through the database to find out what the competition was doing in comparable areas. The company is considering whether to divest or to license its patents to companies with complementary patents.

"The technical experts in the firm had an accurate perception of the competition," said Dan Davison, industry marketing manager at Aurigin, "but the analysis provided confirmation that was reassuring to management."

When its potential is fully exploited, patent analysis can lead to true knowledge management. One firm began analyzing its patents and linking them to the products that had been developed as a result of the patents.

"For the first time, the company knew exactly what patents were protecting what product revenue," Davison said. Next, the company tied patents to the maintenance fees recorded in the legal department's databases. For patents not leading to products and not likely to, patents might be dropped, thus saving money on patent maintenance fees. "And with an integrated financial and technical system, comparing the company's portfolio to those of other companies is much easier, allowing insight into the competitive environment," Davison added.