Running an organization isn’t easy. It involves hard work, experience, passion, patience, strategic thinking, domain knowledge, more hard work, pragmatism, and a number of other qualities, all intended to ensure your organization is growing and moving up the market ecosystem. However, with innovation and technology causing disruptions every now and then, getting your strategy right has become the number one quality required to run a successful business. Without the right strategy all other qualities prove ineffective. A successful and fluid business strategy is built on your organization's core strengths with full understanding of how you are positioned in your market and competitive landscape. It will help you prevent threats, anticipate obstacles and generate solutions to problems. However, you can’t build bricks without clay. Similarly, there can be no strategy without a steady stream in actionable information coming your way. Fortunately, there’s a process to obtain this information - it’s called competitive intelligence.
What is Competitive Intelligence?
Competitive intelligence or CI, as it is popularly known, can be defined as the ethical and collaborative process of gathering, analyzing and disseminating information about the competition and its environment, including the market, customers and competitors, to support strategic planning and decision-making of any organization. 90% of Fortune 500 companies already use CI, and other enterprises, big and small are slowly acknowledging the importance of competitive intelligence. CI can provide organizations with a competitive advantage over their competitors by enabling their business leaders to make informed decisions, and herein lies its importance. It acts as a bridge between information and action, and enables organizations to:
- Monitor market trends, customer expectations, emerging technologies, disruptors, and changes in their industry to better position themselves
- Be ready to counter competitor’s moves through qualitative and quantitative information
- Identify future threats that might arise in their industry
- Improve their sales pitches to win more deals
- Benchmark themselves against competitors to identify gaps and understand where they can improve
- Make strategic business decisions with confidence, armed with actionable insights and research
- Enhance time-to-market, market-entry, and market defense capabilities.
Due to its numerous benefits, CI is now an integral part of the business strategy of organizations globally. When utilized to its full potential, competitive intelligence provides businesses with the most detailed and accurate course of action regarding all their key functions. However, there are still a grievously large number of professionals who harbour a number of misconceptions about competitive intelligence. In this article, let us differentiate myths from reality, and help professionals like you understand what CI is, what it isn’t, what it can do for you, and what it can’t. Keep reading.
Debunking Competitive Intelligence Myths
The best way to debunk or atleast diffuse competitive intelligence myths is to help people understand its realities, and communicate the real value CI can provide organizations. We present these myths based on our 12+ years of experience of implementing CI in 200+ organizations. We have seen companies benefiting immensely from a better understanding of CI, and we’ve seen organizations wasting a lot of time and money and finding little value because of unrealistic expectations. Let’s begin.
Myth #1: CI will give us confidential or internal information on our competitors
Reality: Competitive intelligence is not espionage, which is an illegal and unethical practice. While CI is a completely ethical and legal practice, the main source from where intelligence is gathered is either primary research, or secondary research by monitoring the internet. Thus, CI is not going to provide you with any confidential or secret information about your competitors. This myth is created because of the word ‘intelligence’ in CI, which sometimes gets the wrong connotation because of intelligence services of different countries. CI is intelligence, but it would be wiser to understand it in terms of an ‘intelligent system meant to monitor competitors’. Companies who have implemented CI have derived great value in collecting and structuring the relevant information about their competitors; and distributing it to the right audience at the right time. There cannot be any ethical or legal way to gather confidential information on your competitors. Professional providers of CI don’t condone the use of illegal means to gather any information, as integrity and transparency are of utmost importance in this practice. Industrial espionage is absolutely not tolerated, not to mention that it could get your organization in serious trouble.
Myth #2: CI will tell us what our competitors are going to do next
Reality: In a manner of speaking, yes, but not directly. The competitive intelligence you gather will not lay bare your competitors’ plans, but will provide enough signals that will imply certain strategic directions of your competitors. These signals will trigger intelligent debates and discussions amongst your business leaders. It will also help you figure out what your competitor COULD be planning in the future, based on the information they publish, and the information available on the internet about them. A competitive intelligence platform can do that by identifying insights, trends and patterns from the intelligence gathered. Manually trying to gather competitive intelligence, by sifting through tonnes of digital noise present on the internet, is a fool’s errand.
Myth #3: A CI tool or platform will immediately provide the right intelligence out-of-the-box
Reality: A competitive intelligence tool will not begin providing you with information from the very first day you decide to buy it. It has to be configured according to the intelligence needs of the organization that bought it, which are specific to their unique situation, and their strategic/ tactical priorities. These tools collect data from multiple sources, serve as a repository to store and organize this data, offer capabilities to analyze the data, and provide the functionality to help analysts collaborate and distribute the insights they generate to their internal stakeholders. Such tools or platforms are about more than monitoring web news and producing newsletters reflecting past events. They should also help you discover things you were not aware of, in time to act. Still, creating a proper competitive intelligence process - with the CI tool at the centre of it - takes time.
Myth #4: AI (Artificial Intelligence) will figure out something or tell us something that will help in outperforming our competitors
Reality: It’s true that a number of competitive intelligence tools are AI-powered these days. However, AI only helps in the efficient processing of information that would otherwise take a long time if done manually. Hybrid competitive intelligence tools like Contify utilize both Machine Learning and Human Curation to provide actionable intelligence. While AI takes care of things like contextual noise-filtering, de-duplication, disambiguation and named entity recognition, human analysts extract insights, identify trends, ensure comprehensive coverage, and maintain system integrity.
Myth #5: Competitive intelligence is only meant for large companies
Reality: Competitive intelligence works for small and medium enterprises as well. In fact, competitive intelligence (CI) has been heavily utilised by large, medium and smaller organisations in the western hemisphere and East Asia competitive intelligence has been used as a source for competitive advantage and innovativeness since almost a decade. Most of the apprehension coming from small and medium enterprises about CI is due to another myth - that CI is expensive. While CI is certainly not cheap, CI solution providers will give you a quote specifically for your business or company after careful discussion of your goals and expectations.
According to Forbes, about 73% of companies invest more than 20% of their respective technology budgets on competitive intelligence. You may not do that right from the start, but CI has become an integral business process among organizations, and sooner or later you will have to invest in it. If you think this is too much to pay for information, a bad business decision costs even more.
Bonus: Data, information and intelligence are all the same
Reality: Nothing could be farther from the truth. While data, information and intelligence are closely related, they are not one and the same. Data is numbers or facts presented in a vacuum. It’s a raw material that has no meaning without context. It is the first step towards intelligence. An example of data would be: “ABC company made a profit of 1.2 Billion USD in 2020.” This is a true statement, but of no use. It lacks context.
Information is data with context. It is the second step towards intelligence. It has meaning, but it is still not enough to base decisions off. For example: “ABC company made a profit of 1.2 Billion USD in 2020, compared to 998 Million USD in 2019.” Now that we have grouped another comparative piece of data to it, it is more interesting and meaningful.
Intelligence is information that provides an insight or implication, or suggests an action. Intelligence leads to a decision, which is why it is the most sought after. For example, “ABC company made a profit of 1.2 Billion USD in 2020, compared to 998 Million USD in 2019. Their increase in profit can be attributed to their recent acquisition of XYZ Group.” Data is a subset of information, and information is a subset of intelligence.
One of the goals of competitive intelligence is to transform raw data into valuable intelligence, in order to inform strategic planning and decision-making. Intelligence is both your best weapon and the strongest shield. However, to use it as both, you need to know when to use it, and in what way. Without proper analysis and dissemination, intelligence is of no use to anyone. Hope this article helped you dispel any doubts, myths or unrealistic expectations you had about competitive intelligence and/or CI tools or platforms, and that you will soon start your CI journey to drive your business forward.