Today, information has become an integral part of every organization. However, there is need to effectively manage this information and gain benefit from information systems. Businesses must leverage the vast quantities of collected information in order to make effective decisions, achieve a strategic competitive advantage and achieve increased employee productivity. Competitive intelligence embodies a systematic and ethical program for gathering, analyzing and managing external information that can affect an organization’s plan and decisions. Competitive intelligent system can be used to monitor competitor’s activities, national and internal market trends, customer needs, existing and emerging technologies and regulatory trends. Competitive intelligence is the ongoing process of monitoring environment in order to identify the opportunities to act on or threats to avoid. Many companies use readily available software tools to implement competitive intelligent system.
There are four main steps involved in designing and implementing competitive intelligent system. Very first step is setting up system, this step involves defining goals, identifying clients, output, management’s role, decision this system will support, assigning personnel resources, leveraging internal resources, creating networks, creating process which will match with organization culture. One can also define operating procedures and communication methods at this step. Existing software tools allow highly customized configuration and can be configured to analyze competitor’s strategies, strengths and weaknesses at granular level. There are third party firms who can also provide consulting services to setup such systems. Companies like Strategy software and Cipher systems offers range of cost effective products to implement competitive intelligent system.
Next step in building competitive intelligent system is to collect and feed data into system. Data can be collected from various sources and feed into system using EDI or data can be automatically loaded periodically from vendor’s website. In large organization, company collects field data from sales/marketing teams, suppliers, and regional offices, from customer feedback and field surveys. Another way of collecting data is from over Internet. Many websites such as Bloomberg, provides various operational and financial information on companies operating in various sectors. Today, software tools are intelligent enough to interpret data from agencies like Reuter and Bloomberg. Companies can subscribe to these data agency’s services for regular data availability. There are firms, which are specialized in providing competitive data for a particular business sector.
Next step in this process is validating and analyzing data. Data validation can be done at source of collection or after data is in the system. There are various tools available to mine data. Most business intelligent system software have inbuilt data mining capabilities and they use expert system algorithms to analyze data. These tools are highly customizable and users can organize data as per their need. These tools are capable of producing complex analytical reports based on requirement and defined rules. Once data is analyzed, reports can be available on intranet or sent to corresponding individuals. These reports can provide information about particular sector, competitive analysis of top competitors, various market trends and patterns. Feedback mechanism can be incorporated to get feedback from end user to constantly update and change system.
In applying competitive environment information helps company to back their strategies, increase sales revenue, focus on marketing programs and improve negotiation outcomes. It helps to manage a wide range of information and analysis from many sources about your own competitive environment to turn it into useful intelligence easily used by people planning executive strategy and by others in sales, marketing, negotiations, contracting and other critical areas.