Competitive Intelligence Needs-Assessment: Asking the right questions

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Competitive Intelligence (CI) plays a critical role in formulating an
organisation’s business strategy. It can make the difference between
winning and losing, survival and death. However, CI can only live up to this
expectation, if it addresses the right questions. Right answers to wrong
questions, will be wrong for the organization. What questions should the
organization ask in order to win? The answer to this requires clear logical
thinking on the part of both, the decision-makers who will use the
intelligence to further their business objectives, and competitive
intelligence analysts who will provide actionable inputs to facilitate the
decisions. Going about CI needs assessment in a systematic fashion helps
you hit the bull’s-eye.

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Competitive Intelligence Needs-Assessment: Asking the right questions

  1. 1. Competitive Intelligence Needs-Assessment: Asking the right questions ValueNotes White Paper May 2012
  2. 2. 2 Competitorprofiling:Manyneedsbehindtheneed White paper | May 2012 | Competitive Intelligence Needs Assessment: Asking the right questions Competitive Intelligence (CI) plays a critical role in formulating an organisation’s business strategy. It can make the difference between winning and losing, survival and death. However, CI can only live up to this expectation, if it addresses the right questions. Right answers to wrong questions, will be wrong for the organization. What questions should the organization ask in order to win? The answer to this requires clear logical thinking on the part of both, the decision-makers who will use the intelligence to further their business objectives, and competitive intelligence analysts who will provide actionable inputs to facilitate the decisions. Going about CI needs assessment in a systematic fashion helps you hit the bull’s-eye. Executive Summary • Competitive intelligence is a critical input for decision making in a global, competitive and rapidly changing business environment in which companies operate today. • Asking the right questions about the external business environment is the first step towards getting actionable competitive intelligence. • Determining the right questions is not trivial, as each individual’s perspective on the competitive environment is governed their role, past experience, level of knowledge, personal biases, predisposition, and so on. • Organizations need to undertake a systematic exercise to identify the key intelligence they need in order to ensure that o they are able to achieve their strategic goals o they are able to take advantage of emerging opportunities, and mitigate risks and threats o they are not taken by “surprise” by developments in their external environment o They are able to gain and maintain a competitive advantage in the industry vis-à-vis their competitors • Defining the key intelligence needs of an organization is best done collaboratively by the key decision-makers and competitive intelligence professionals • A careful needs assessment enables an organization to o maximize the ROI on its CI o meet its business objectives
  3. 3. 3 Competitorprofiling:Manyneedsbehindtheneed White paper | May 2012 | Competitive Intelligence Needs Assessment: Asking the right questions Contents 1.  Are decision makers asking their competitive intelligence teams the right questions?..................4  2.  What questions should the decision-makers ask?................................................................................4  3.  What questions should the CI team ask? ...............................................................................................6  4.  How must organisations go about identifying their KITs and KIQs?..................................................6  5.  Benefits of Needs Assessment for CI......................................................................................................7  6.  Final thoughts….........................................................................................................................................7 
  4. 4. 4 Competitorprofiling:Manyneedsbehindtheneed White paper | May 2012 | Competitive Intelligence Needs Assessment: Asking the right questions 1. Are decision makers asking their competitive intelligence teams the right questions? “Asking the right questions takes as much skill as giving the right answers” If you have played the game of 20 questions 1 , you will appreciate the fact that if you don’t think through your questions intelligently, you “waste” your questions. In the context of a business, you need competitive intelligence (CI) to make good decisions that will give your company a competitive advantage, but you have a limited budget for getting this CI. As in the case of the game of 20 questions, if you don’t ask the right questions, you waste your budget on irrelevant research. Competitive Intelligence is a critical input for decision making in a global, competitive and rapidly changing business environment in which companies operate today. It can potentially be a game-changer for an organisation. However, since many factors contribute to the success or failure of a business, it is not easy or even necessary to isolate the contribution of CI in the performance. While companies do try to measure the performance of their CI teams, measuring the value of CI inputs to an organisation is a challenge. In general, if the value of CI is greater than its cost, it is a worthwhile investment. CI teams need to optimize their effort by answering the right questions. Framing the right questions is not as trivial as it seems. If members of senior management in any organisation were to frame CI questions, each is likely come up with different sets. In-depth probing and discussions on how the intelligence will help these decision-makers is required for achieving convergence on what questions the CI team needs to address. CI, in a nutshell, is the art of asking the right questions to the right sources in the right way at the right time. – SCIP.org 2. What questions should the decision-makers ask? The competitive intelligence needs of key decision-makes can be broken into three categories. In CI jargon, there are three types of “key intelligence topics” (KITs). 1 For those who haven’t, here it is in a nutshell: “In the traditional game, one player is chosen to be the answerer. That person chooses a subject but does not reveal this to the others. All other players are questioners. They each take turns asking a question which can be answered with a simple “Yes” or “No” – only 20 questions in all. If a questioner guesses the correct answer, that questioner wins and becomes the answerer for the next round.
  5. 5. 5 Competitorprofiling:Manyneedsbehindtheneed White paper | May 2012 | Competitive Intelligence Needs Assessment: Asking the right questions Early warning KITs Organisations are continuously adjusting their strategies and actions to developments in the external environment. If they can get early indications of how the environment is likely to change in the future, they are better able to prepare for it. Companies keep a close watch on their environment to identify opportunities for their businesses, as well as to spot threats that might jeopardize their plans or performance. If a company can identify emerging opportunities before their competitors, they can gain a competitive advantage over their peers by being the first-movers in the market. Similarly, early warnings on impending risks or threats enable businesses to mitigate them before they cause any significant damage to the organisation. In the age of globalization, the external environment of organisations is vast and rapidly changing. It is neither feasible, nor cost efficient, to keep a watch on all aspects of the environment. Organisations need to identify the key areas that have maximum impact on their businesses. For example, tracking technology developments will be critical to a company that manufactures products that have fast technological obsolescence. Similarly, a consumer durables company is interested in identifying pockets of concentration of disposable income, for selling its products. Strategy KITs These intelligence topics address the business objectives as stated by an organisation. Goals of various units or functions within the organisation feed into the organisation’s business objectives. For example, if a company wants to grow by expanding its geographic footprint, it needs to identify which new geographies to enter and how. Competitive intelligence inputs are required for deciding strategies to meet the goals. Strategic KITs address specific objectives of an organisation, and differ from early warning KITs in that they typically do not require continuous monitoring. They are generally addressed as a one-time activity. Of course, it is possible to revisit them periodically if and when required. Early  Warning  CI Government  regulations Customers  and markets Technology/  innovations Suppliers and  raw materials Macro  indicators Competitors Industry  structure and  trends Opport‐ unities Threats Competitive  Intelligence Optimal Strategy Goals / Plans Business Objective
  6. 6. 6 Competitorprofiling:Manyneedsbehindtheneed White paper | May 2012 | Competitive Intelligence Needs Assessment: Asking the right questions Competitor KITs Organisations need to gain and maintain a competitive advantage over their competitors in order to survive and grow. They must watch what competition is doing at all times, if they want to anticipate their strategies, and counter or nullify them. Once again, it may not be necessary to keep an eye on all aspects of the competitors’ businesses all the time. For example, they may look at the financials every quarter, but may want to track new product announcements on a continuous basis. They can choose the parameters to monitor based on their own strengths and vulnerabilities vis-à-vis their competitors. 3. What questions should the CI team ask? Should the CI team address all the KITs identified by the decision-makers? Organisations need to take a call on whether a particular KIT is worth pursuing, based on a cost benefit analysis. As long as the benefit of the intelligence is greater than its cost, it is worthwhile for the company to address the KIT. However, even within this set of economically viable KITs, organisations often need to prioritize the KITs that can potentially benefit the organisation the most. KITs are the broad problems/ areas that decision-makers need solutions for. For example, they may identify “How can I minimize my cost of manufacturing?” as a key intelligence topic. “Should we manufacture the product ourselves or outsource the manufacturing?” is the decision that the company will need to take. In order to answer this question, competitive intelligence analysts may need to ask several micro questions such as “What is the cost of manufacturing if we do it ourselves?”, “How long will it take us to build our own manufacturing capability?”, “Who provides outsourced manufacturing services?”, “ How much do they cost?”, “Do my competitors outsource?” and so on. These are the key intelligence questions (KIQs) that the CI team needs to answer. While the KITs are generally spelled out by the decision-makers, the KIQs are developed by the CI team (though decision-makers may also give their inputs on these). 4. How must organisations go about identifying their KITs and KIQs? Employees at all levels in an organisation, from junior employees to the management, have limited perspectives that are dictated by their role, past experience, level of knowledge, personal biases, predisposition, and so on. It is hard for any one person to draft a comprehensive list of key intelligence topics and questions for a company. A collaborative effort will always yield a superior outcome as all blind spots of individual participants will get coverage when multiple people put their heads together. The process for CI needs assessment is the first input into the organisation’s CI framework and is outlined in the exhibit below.
  7. 7. 7 Competitorprofiling:Manyneedsbehindtheneed White paper | May 2012 | Competitive Intelligence Needs Assessment: Asking the right questions Exhibit 2: CI framework A CI framework is comprised of key intelligence questions, the analysis required for answering them, the data points required for the analysis and the sources that can be used for each data point. A CI framework applied to the “right” questions enables organisations to ensure that the competitive intelligence delivered to the decision-makers is: a) Relevant b) Adequate (important intelligence is not missed) c) Created efficiently (high ROI) d) Effective (actionable and leads to superior business performance) Many organisations prefer to involve external consultants for guiding and moderating the needs assessment process for several reasons: • They have expertise in CI processes and needs assessment methodologies and frameworks • They offer a fresh third-party perspective to the deliberations, which often help in throwing up new ideas and hence superior outcomes • They lend objectivity to the proceedings and rise above internal organisational dynamics • They are able to enforce rigour in the process at all levels in the organisation as they are not bound by internal hierarchies 5. Benefits of Needs Assessment for CI Key decision-makers get actionable intelligence that is relevant to the decisions they need to make and areas they need to monitor Company can eliminate any redundant data collection and reporting, thus increasing the return on investment in CI CI addresses all the key risks faced by the company, thus reducing the chances of it being “caught” by surprise Needs assessment is the first input in the CI framework for the organisation 6. Final thoughts A systematic approach to assessing CI needs, and hence a plan for CI activities in an organisation, is essential for the success of the CI team as well as the business itself. It is therefore in the interest of the organisation to ensure that a high level of rigour is applied in this activity. Identificaltion  of KITs by  individuals Collaborative  refining of  KITs Prioritising  KITs From  KITs to  KIQs Execution on  KIQs
  8. 8. 8 Competitorprofiling:Manyneedsbehindtheneed White paper | May 2012 | Competitive Intelligence Needs Assessment: Asking the right questions ValueNotes is a leading provider of research-based business intelligence. Over the past decade, through our research products and research support services, we have helped organisations across diverse industries, markets and geographies in gaining competitive advantage. Our strong capabilities in collecting, interpreting and analysing data enable us to provide actionable intelligence to our client. We take pride in our ability to provide insights as an independent, unbiased third party. Our strengths lie in our industry expertise, strong relationships across an intricate network of industry participants, proven methodology for research and analysis, and a team of researchers with rich experience adding up to several hundred man years. • Research Services: we provide a wide range of bespoke business and financial research services about specific markets, industries, companies and competitive environments such as market segmentation/sizing, sector/ industry reports, company reports/ profiles, investment appraisal, due diligence, partner selection, competitive analysis, investor/user/buyer perception studies, desk research, news tracking • Information Products: we publish proprietary market intelligence on the (services) outsourcing industry – in BFSI, e- learning, engineering, healthcare, legal and publishing – with an emphasis on knowledge services or KPO. • Competitive Intelligence Consulting: with over a decade’s experience in conducting competitive intelligence (CI) and advising firms on their CI strategy, we are able to assist companies implement CI to gain a strategic advantage. • Learning & Development: a consolidation of our own experience of doing CI into a set of highly effective training programmes for corporate teams and individual practitioners. • ValueNotes.com: India’s leading financial & equity research portal that provides an independent and unbiased aggregation of opinions, research, analysis and insights on the Indian financial markets. Copyright © 2012 ValueNotes Database Pvt Ltd All rights reserved For more information, please contact: Varsha Chitale Director, Competitive Intelligence Practice T: +91-20-6623 1767 / 1743 E: research@valuenotes.co.in ValueNotes Database Pvt Ltd 1 Bhuvaneshwar Society Abhimanshree Road, Pashan Pune 411 008. Maharashtra, India W: www.valuenotes.co.in

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