Competitive intelligence: ingredients for success

By Judith Lamont

Among the primary challenges of competitive intelligence (CI) initiatives today are managing the overwhelming flow of information, aligning CI initiatives with strategic goals and committing time to analysis.

As tempting as it may be, CI efforts should not begin with data collection, but rather with a clear statement of purpose. The purpose may be broad: monitor significant developments in the industry, for example, or it may be focused on a decision about acquiring a company. Without a statement of purpose, there is no measure of success, or even a good way to direct research efforts.

The research portion of the effort poses two diametrically opposed challenges. One is to make a broad enough sweep to encompass all the potentially relevant data, and the other is to reduce that data to a manageable level. Rather than launch such an effort on their own, many companies turn to content providers such as FActiva, a Dow Jones & Reuters Company, to accomplish both steps. The Factiva content set includes a collection of 1,000 newspapers, 6,500 business magazines and 270 newswires from more than 100 countries. Its flagship product, Factiva.com, is a Web-based service that provides an organization with tools for researching and monitoring global news and business information. Factiva also offers a suite of integration products that can deliver filtered information in a customized format to folders, corporate portals or workflow products. Over 1.7 million users are receiving information from Factiva.

The top five industry segments using Factiva’s products and services are financial services, consulting firms, media organizations (including PR and corporate communications), insurance, high-tech/telcom and energy. All are either highly competitive vertical sectors or information-intensive businesses, and ways of measuring success vary by industry.

Customization options

"PR firms are very active in monitoring media coverage," says Pat Sabosik, Factiva’s VP and director of Global Marketing. "They can convert information into action when they see a topic being covered in the news where their client is a good fit." Such monitoring, she adds, also makes PR firms aware of errors or negative coverage in the media, which enables them to provide corrections and other forms of damage control.

The customization options available for managing information delivered by Factiva allow the service to take on a role that extends beyond that of content delivery. For example, through Factiva Publisher, administrators can write their own summary of an article and post it. Administrators can tag articles, highlight them and link them to other materials, including those outside of Factiva content. The connections and modifications allow for adding context and personal knowledge into the mix of information.

For companies that choose to generate their own content collections, an effective search-and-retrieval solution is essential to provide both the broad view and targeted results. Autonomy offers an infrastructure that enables searching across a variety of sources, including news feeds, document management systems, e-mails and customer service databases.

“The problem that many businesses face,” says Ron Kolb, Autonomy’s director of Technology Strategy, “is that they have reams of data from many sources and no unified way to present them to the user.” Autonomy can perform a single search of all the information assets inside or outside of the firewall and display all the results, regardless of the source. Searches can be conducted in either a proactive mode and delivered to the user, or in response to a user inquiry. Updates can be scheduled either at regular intervals or when a source such as a Web site changes.

Relevancy ranking

Autonomy uses several mathematical techniques to produce targeted search results. Patterns of words are analyzed and assigned numerical values based on Bayesian inference and Shannon’s information theory, both of which deal with statistics. Pattern analysis allows a determination of the core topic of the document, regardless of the language in which it is written. The document can then be given a ranking for relevancy. Kolb likens the process to that of human thinking, in that multiple elements are combined to produce a meaningful answer. For example, a black-and-white bird that lives in the Antarctic, swims and eats fish would be interpreted as a penguin. “None of these facts in isolation produces the right answer,” says Kolb, “but together, they can.”

In the context of competitive intelligence, Autonomy can be set up to either do broad scanning or specific searching. In the pharmaceutical industry, widespread intelligence gathering regarding FDA regulations and new patents can help direct a company toward productive drug development and decrease time to market. On the other hand, a detailed analysis of a software company’s public user group discussions can help a company identify problematic aspects of the competing software products. The company can then assess its own product’s features and compare customer reactions.

The Principal's approach

Some companies prefer to channel their CI activities through an application specifically designed for the CI function. The Principal Financial Group is one of those companies. The Principal offers a full range of financial products and services, including retirement and investment services, life and health insurance, mortgage and banking. Its primary customers are small to medium-sized businesses, individuals and large institutions.

"The financial services industry is ever-changing. We're in a market-driven business and we need to monitor it constantly," says Sandy Grant, assistant director of CI at The Principal. "We chose an application tool that allowed us to do this proactively."

The Principal uses Knowledge.Works from Cipher-Systems, a software tool that works with Microsoft Exchange/Outlook or Lotus Notes. It allows automated searching, categorization, indexing, news alerts and other functionality. Knowledge.Works provides a means of data organization, summarizing text, leveraging existing research, sharing knowledge and disseminating information via an intranet or portal.

“We believe we have come a long way in just a couple of years," Grant says. "Our application can capture and store everything from news articles, internal and external research to conference notes and more." Members of the cross business unit CI team and others throughout the enterprise use it on a daily basis. The Principal recognizes that changing demographics, the economy, regulatory issues and other events affect its customers and therefore the market for its products and services. Queries are designed to capture critical information on those topics as well as monitor the competitive landscape.

Rather than limit the CI application to just the CI team, the company rolled it out enterprisewide to select users who have a recognized business need for that type of information. "We operate in many markets, and looking at the competitive performance of one business unit does not tell us how we compete in the industry," says Grant.

Frequently, the conclusions derived from the CI application serve as useful validation of insights that leaders have uncovered informally. "The information we gain helps provide solid background for decision-making," Grant points out. She agrees that it is easy to spend too much time on data collection at the expense of analysis. But having automated the collection process, The Principal can now spend more time on analysis and dissemination of pertinent information, she maintains.

The Principal CI Team d