Competitive intelligence is not so much an automated function as it is an art. We've covered the topic in Business Intelligence Review less in the service of technology than appreciation of the discipline that it is. Structurally, we're learning a thing or two about the competitive intelligence function. In her column in the July issue of Business Intelligence Review, Melanie Wing of Chase Card Services pointed out, among other things, the difference between the unknown and the unknowable, the CI focus on human networks, and offensive and defensive uses of CI.
Given its growing importance, a newer trend is to centralize the CI function into a consolidated unit and the first mover appears to be the pharmaceutical industry. While most industries tend to bury the CI function in market research, 75 percent of pharmaceutical companies maintain centralized CI groups, according to a recent report from Cutting Edge Information. There are good reasons for this. Unlike more decentralized industries, CI in pharma holds great sway in developing overall corporate strategy. "People start to see that the decisions CI can end up influencing are not on the order of 100K or even million dollar decisions, these can even be billion-dollar decisions that end up making or breaking the company in some cases," says Elio Evangelista, senior analyst at Cutting Edge. "That's when it starts to get more dedicated support and naturally gets pulled out of that market research arena."
Time to market and time to information may be more critical in the ultra-competitive pharma industry than in financial services or health care, but the example it offers is universal. CI is a natural way to connect the planning at the ends of the organization, from R&D (or product design), and marketing and sales in order to maximize the impact of a product or service introduction. In manufacturing - where an old maxim states that 80 percent of the cost of a product is locked in during design - consolidated CI can ward off a lot of bad decisions. As Evangelista puts it, the CI culture fueled by internal resources allows every level of the operation to make intelligent decisions based on the competitive environment.
Our friend Melanie Wing at Chase Card Services points out that centralized CI is also beneficial because of efficiencies related to cost and centralized purchasing, and the ability to look at a competitor holistically and strategically. There are also challenges, she says. "A centralized function cannot address all of the issues that are important to a business unit which leaves many tactical, but important questions unanswered." In addition, some true subject matter experts that live within particular areas of an organization (e.g. operations or R&D). "Someone in a centralized corporate function is unlikely to have the depth of knowledge to make something actionable at a LOB level."
Wing believes that, for industries like financial services, a network approach makes the most sense, with a centralized function working with business unit functions to provide both a tactical and strategic point of view.
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