The term competitive intelligence is often used as a synonym for business intelligence. Competitive Intelligence may be defined as the action of gathering, analyzing, and applying information about products, domain constituents, customers, and competitors for the short term and long term planning needs of an organization. Competitive Intelligence (CI) is both a process and a product. The process of collecting, storing and analyzing information about the competitive arena results in the actionable output of intelligence ascertained by the needs prescribed by an organization.
Key Points of These Definitions (Competitive Intelligence):
-Competitive Intelligence is an ethical and legal business practice. (This is important as CI professionals emphasize that the discipline is not the same as industrial espionage which is both unethical and usually illegal).
-The focus is on the external business environment.
-There is a process involved in gathering information, converting it into intelligence and then utilizing this in business decision making. CI professionals emphasize that if the intelligence gathered is not usable (or actionable) then it is not intelligence.
A more focused definition of CI regards it as the organizational function responsible for the early identification of risks and opportunities in the market before they become obvious. This definition focuses attention on the difference between dissemination of widely available factual information (such as market statistics, financial reports, newspaper clippings) performed by functions such as libraries and information centers, and competitive intelligence which is a perspective on developments and events aimed at yielding a competitive edge.
The term CI is often viewed as synonymous with Competitor analysis but Competitive Intelligence is more than analyzing competitors. it is about making the organization more competitive relative to its existing set of competitors and potential competitors. Customers and key external stakeholders define the set of competitors for the organization and, in so doing, describe what could be a substitute for the business, votes, donations or other activities of the organization. The term is often abbreviated as CI, and most large businesses now have some Competitive Intelligences functions with staff involved often being members of professional associations such as the Society of Competitive Intelligence Professionals.
The Society of Competitive Intelligence Professionals (SCIP) is an organization for those who are interested in learning more about Competitive Intelligence. Established in 1986, it provides education and networking opportunities for business professionals, and provide up to date market research and analysis. Members of the SCIP have backgrounds in market research, strategic analysis, science and technology.
Competitive intelligence is all about analyzing relevant business environment information on an ongoing basis. It includes keeping an eye on:
-Legal and regulatory changes
-Industry and market trends
-Political and economic changes
Being aware of critical issues generates insights, enables new ideas and helps owners and managers make informed decisions regarding future events.
To be effective, competitive intelligence needs to become part of the business culture, a strategy needs to be defined, a plan assembled and implemented. Ethical sourcing and use of the information is critical.