Developing information systems for competitive intelligence support - The Library in Corporate Intelligence Activities

Library Trends, Fall, 1994 by Bonnie Hohhof

Introduction

Librarians and information scientists have long enjoyed gatekeeper status in their organizations, providing service as intermediaries between information and the people who need it. Changing information sources, technologies, management practices, and organizational cultures are transforming the role of intermediary to one of enabler, providing the mechanisms to supply quicker and more direct access to information. The development of competitive intelligence (CI) activities in companies has hastened this trend. This article discusses the issues connected with developing information systems for competitive intelligence support. It provides an overview of CI system elements, defines the elements of an effective competitive information system, and summarizes major issues affecting system design and implementation.

Competitive Intelligence Systems

A competitive intelligence or business intelligence (BI) system is the organizational process for systematically collecting, processing, analyzing, and distributing to decision makers information about an organization's external environment. Such a systematic process organizes the flow of critical information and focuses it on operational and strategic issues and decisions. A system may be formalized in a central department or operated through an informal decentralized association. The terms CI and BI are often used interchangeably. Technically, CI is a subset of BI, focusing on the activities of competitors, markets, and industries. BI, the larger term, covers activities that include the tracking of political, economic, and social forces that affect an organization's ability to effectively compete. Optimally, the system should support BI but most of ten is limited to competitively defined areas. In this article we will focus on CI.

A CI system may track:

* competitor capabilities, plans, and intentions;

* markets and customers;

* industry structures and trends;

* political, economic, and social forces; or

* technological developments and sources.

The essence of a CI system lies in its function of contributing to better and more timely organizational decision making. Its primary objectives are to help decision makers avoid surprises from the competitive environment and to identify current and potential threats and opportunities. An effective system provides competitive advantage by reducing reaction time to competitive actions and improving both strategic and tactical planning.

CI systems are built on three separate, yet interdependent, activities: (l) general information services, (2) primary information collection, and (3) analysis. Each activity requires different resources and sets of skills and is of ten performed by separate individuals. These individuals may work directly for the CI organization or be drawn into projects as needed.

The three activities may be viewed as integrated parts of the CI pyramid (see Figure 1). The broadest and most basic activity, information services, identifies, retrieves, and distributes published or secondary information. Published or secondary information sources include commercially published reports, journals, newsletters, studies, and other items--material available through online services such as DIALOG, Dow Jones, and NEXIS. Effective CI information services also track fugitive material from consultants, trade organizations, technical societies, universities, and other sources, for which bibliographic access is difficult. This category of material is often the most specialized and valuable source of competitive information and is sometimes available by simple request. This kind of service is often provided by an individual with a library background who is on the CI staff or in the organization's library.

The collection activity involves obtaining information from primary sources, usually individuals. These individuals may be employees of an organization or specialists in other companies, consulting groups, universities, or government agencies. Competent information collection of this kind requires an extensive knowledge of interviewing techniques and the ability to develop and maintain a personal information network. Effective collectors often have journalism or investigative government backgrounds. The activity of collecting information in this way is also called "human intelligence" or "humint." It is extensively used in government and security agency operations.

Analysis is the most specialized competitive intelligence activity. It integrates information supplied by the information services and collection activities with an analyst's expert knowledge. Information is analyzed in a specific environment of problems, transformed into "intelligence," and delivered to decision makers. Analysts, who frequently possess advanced subject degrees, have extensive knowledge of industries and technologies.

Intelligence Information

Intelligence information is data about an organization's external environment compiled through a continuous systematic collection process. This information is obtained from both internal and external information sources and analyzed in concert with an organization's internal data. Intelligence information provides as complete and as accurate an understanding of the external environment as possible and helps minimize the uncertainty associated with managerial decisions.