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Business intelligence serves to determine the relevance of data in the flow of information received.
(Published on May-June 2006 – JEC Magazine #25)
BY M. REYNE, CONSULTING ENGINEER
The first things to understand are that information is an economic good and that we must make a distinction between information for knowledge and information for power. There is a tendency for managers to withhold information in order to serve their power, handing it out only sparingly to subordinates. This slows down the information process.
There are four different types of access to information:
Different types of accessible information.
While the Internet provides fast and easy access to an abundance of information, you need to know how to exploit the information in specific ways (How? Who? What? Where? When?), how to process the results, and how not to become lost in the deluge of information received.
Information management is the exploiting of formal sources. It involves a rigorous analysis of written (hard copy) and digital (Internet) communications. This type of documentary monitoring is often enough to get a good idea of how a technology or product is developing. It requires: - regular monitoring of media. These should be carefully chosen, especially in terms of distinguishing original information sources from repeat hits or “doublets”; - identifying, sorting, dating, and classifying subjects of interest in a logical way, taking care to winnow out obsolete information; - learning to skim over information quickly to separate what is essential from what is of secondary importance. This is relatively easy, as we all are generally taught in school to write in outline form, which helps when looking over text to identify keywords; - always having what is needed to take down the information on paper or to record it (photo, tape, video): information can be fleeting!
It goes without saying that knowing more than one language is a major advantage for information management.
Nonetheless, organising basic information is within the reach of any company, although too often the needs are not well -defined and documentation, limited or nonexistent.In a lot of companies, inadequate budgets mean that information gathering cannot be done in a really professional way. There is a tendency to overestimate the importance of internal sources compared to external ones.
There is also often a lack of coordination and free circulation of information between departments. This generally is not the case in large groups, although these have a handicap in that “big bosses” rarely read much (this is a well-known fact!).
Distinguishing between unrestricted and restricted sources of information
Technology watch Principle
If there is a need for techno -economic intelligence, it is because at any one time in the world, an individual or a company is discovering or launching a new process or product that is going to replace the one you are using or producing currently.
In an environment that is constantly changing, it is of the utmost importance to be on the watch. The sooner a development is detected, the more time a company has to react. It generally requires expert knowledge to exploit the informal, 0or restricted, sources used here and to be able to process the know-how gleaned from them, as well as information that is learned by word of mouth.
For this type of intelligence, it is useful to choose the participants based on criteria like inquisitiveness as a basic requirement, of course, but also a capacity for developing inquisitiveness among company employees, since each staff member should become an “informer”.
A good knowledge of the company’s core activities is also necessary, along with a clear, precise definition of corporate strategy, and a capacity to acquire information rapidly and systematically, with an effort made to note down new facts on a daily basis, as details are easily forgotten. A propensity to monitor the development of new materials and processes, participate in conferences and expos, and read the most important papers is useful, as is flexibility in information gathering, which means learning to discard what is trivial or irrelevant, looking for what is out of the ordinary, or for the casual bit of information that often turns out to be the most important one. (Corridor meetings at seminars, conferences and expos are often more interesting than the event itself, since conference speakers tend not to give out secrets).
It can also be useful to include suppliers and encourage them to make suggestions, and to keep an ear open to customer reactions; to use contacts to develop information networks (experts, co-workers, clubs, or peers) and cultivate them at different levels. This should be done while taking care to maintain the contacts in order to keep the network from dying out. All of the preceding involves identifying “those who know" and “those in the know”, in other words, the experts and the informed opinions. While there are “those who talk” (the prominent ones you see at all the cocktail parties), those who really know are more often obscure players who are chained to their work.
It is best to never take anyone’s word for something, or anything at face value, but to check for relevance and credibility, to beware of misinformation, and to always make sure that data tally. The best informers are also the ones most likely to give out misleading information.
Visiting plants/expos and accepting assignments abroad are good things – but always need to be prepared carefully in advance. This requires an adequate budget, of course, and being able to justify it. Conferences can be videotaped, equipment on exhibit can be photographed, and samples of the products can be taken away.
Making a note of market indicators, patents, standards and pilot companies to monitor is also helpful – as are participating in international standards committees, which are ideal for exchange; searching out advanced indicators, such as investments, hiring, technological or economic changes; and determining the leading trends. Information should be circulated freely within the company to promote information sharing – giving in order to receive, so to speak.
Competitive watch Principle
Close knowledge of the competition should be a basic concern for company managers. It is important to analyse main competitors on a continuous basis to avoid the risk of being outdone by them. Competition can be stimulating, too.
This is imperative for any research effort, because competition is like an iceberg: only the top of it is visible, and it is the hidden part that needs to be sounded out. But what usually is the case? Generally speaking, when you question SME’s about their competition, the answers are fairly vague. You rarely see regular efforts at researching the competition, and when you do, the competitors mentioned are usually those at the national level.
Keeping files on the competitors
These days, the competition is international, and it has spread into businesses like the food or service industries that seemed – until now – to benefit from regional protection. Effective monitoring of competition must necessarily include a file on each competitor, and which is kept up-to-date on the following aspects: - the advantages to work against and the handicaps to exploit; - whether or not the competitor belongs to a group and whether or not it has foreign agreements; - details of business deals it has lost and of its winning strategies, to be discussed; - any on-going programmes identified, and all new products, examples of which should be purchased; - any patents and licences; - all formal or informal information gleaned on the competitor’s financial situation, managers, and the like.
The most emphasis should be given to the most powerful, progressive, and ingenious companies in the sector, along with the two or three companies closest to your company (the competitors most often encountered). Experience has shown that those with active files on their competitors have a lead on those competitors.
Difference between technological watch and competitive watch
Monitoring the competition on a permanent basis
All legitimate means should be used to monitor the competition
The following can be considered as legitimate means: - purchasing or marketing department reports and after-sales-service reports, as these functions constitute the company’s “window” to the outside; - taking advantage of trade shows and expos: any presentation of equipment/ material contains information, even if some of it is faked (efforts should be made to detect hype); - reading publications put out by the competitors – often plentiful, but forgotten as a source (for example, many patents are an indication that something important is happening, and a patent in an unusual field for the competitor can signal a diversification to be watched); - looking at job offers, which can give an idea of the progress of a project if they are direct instead of through the intermediary of a recruiting agency (hiring technicians generally means that innovation is in the air; seeking sales personnel, that sales development is being promoted); - consulting competitors’ catalogues, brochures, operating instructions, samples, websites and, of course, price lists – which should be obtained for comparative analysis; - reading press analyses, which can reveal important information about types of investment (although sometimes these can be quasi advertorial or even contain disinformation, requiring experienced practice to detect it); - fostering contacts with suppliers, representatives and delivery services that provide the opportunity to make inquiries about the competition. Sometimes well -directed questions can bring in some very interesting details (and some SME’s are very adroit at this method, going so far as to note the details on competitors’ package labels in train stations to glean information about their customers and operating modes); - participating in international standards committees, an excellent opportunity to get information about the competition; - purchasing the more outstanding competitor products, taking them apart for thorough examination, and analysing their value – thereby creating a sort of “competitors’ museum” (this is practiced a lot in the automotive and household- appliance sectors); - purchasing financial reports, which may be procured through a number of different sources (although, obviously, information that can be bought is also relatively easily available to others); - consulting public court proceedings for lawsuits, e.g. commercial disputes or infringement, in which the companies involved are required to “tell all” to the judge (read commercial court newspapers to discover some of the hundreds of such lawsuits that are instituted each year); - just listening to gossip during train or air travel and in restaurants, or in the closest pub to the competitor’s company, or even looking through a competitor’s trash bin can be very instructive; - blow-ups of satellite photos of industrial facilities are already available in the market – purchasing these can help visualise a large competitor company’s material development.
How to protect your own company from competitors
There are also competitor monitoring practices that are fundamentally objectionable. The borderline between seeking information and industrial espionage is very thin. As such practices can be used at one’s expense, it is important to recognise them to avoid falling into a competitor’s trap. The main objectionable practices are: - bogus job proposals or applications proffered with no intention of hiring or signing on, but aiming to extract information about the competitor through an interview or a questionnaire (the practice is to place attractive offers in major publications; technicians are especially vulnerable in this area – all one has to do is record their answers on a hidden tape-recorder or video camera); - using a shell company or a subsidiary to lure away technicians who are bound by their employers to agreements not to compete (these are naturally the most attractive catches, being “ones who know”); - sham negotiations with a competitor on the pretext of a partnership or buyout is a method that has been brazenly used in recent years (beware also of mushrooming business cards); - bribes paid to the competitor’s supply or sales department (unhappily, everything can be bought, and not just in developing countries); - slipping agents in among the competitor’s technicians or other employees (numerous lawsuits have exposed the use of this method in large companies); - eavesdropping and infringement (including computer hacking), which have been made easy by the new technological means that exist, including microphones placed on telephones, hidden microcameras, infrared telephoto lenses, and signal capture – either opto-electronic (video) or acoustic (window pane vibrations). The equipment that makes all this possible can be purchased at a unit cost of under €1,500; - computer sabotage (copying, introducing viruses), which can add up to huge losses; - using professional spies and stealing documents, drawings, supplier or customer files, software, or samples is practiced at the level of large groups or governments. Business espionage has outstripped purely military espionage, as plants have become more attractive than barracks (the French internal state security department, which has a wealth of experience in that area, can help protect a threatened company); - having studies and research financed by a foreign company, a practice that has become global.
And we must always keep in mind that in business intelligence, nothing can replace personal experience and direct contact (seeing and hearing). These should be given priority, as the computer can be considered only as the means to an end.