Effective Use of Information and Competitive Intelligence
by Mary "Dottie" Moon
Information increasingly forms the basis of competitive advantage, and organizations must explicitly articulate and define the role information will play in the design and execution of their competitive strategies. Business writers have been extolling the emergence of an information-based economy for many years. However, to date, few organizations have truly integrated information into their strategies and planning processes in a substantive way. Your organization has the opportunity to obtain sustainable competitive advantage by integrating information into the strategies and value chain of the corporation.
"…competitors can almost always match the quality and price of a market leader's current product or service. By the time that happens, though, the knowledge-rich, knowledge-managing company will have moved on to a higher level of quality, creativity or efficiency."
-- L. Prusak & T. Davenport, Working Knowledge, 1998.
Data--information--knowledge--wisdom. The words have been defined and redefined in an effort to express relative value. While the distinctions are important, for the purpose of this document, the word information will be used to represent all levels of value from data to knowledge. The more relevant differentiation to this discussion is whether the information is needed and critical, or, just nice to have but not necessary for decision-making.
Characteristics of Information
To begin the integration process, we need to think of information as a resource elevated to the same levels as other critical resources, such as labor and capital. Companies are beginning to recognize the true worth of knowing how information flows, and the move to electronic commerce is accelerating that understanding. A few companies, such as Skandia, are leading the way with intellectual capital metrics, but the vast majority have yet to assimilate information methodologies and information values into their planning processes.
The integration of information management into strategy and execution should also be valued as a core competence of the organization. A core competency is a skill recognized to have significant and intrinsic value to the corporation's competitive position, and as such, the competency needs to reside within the bounds of the corporation. This new distinction raises the importance of managing information resources. Futurists and business consultants in an eager race to name the next economy--net economy, experience economy, information economy--all seem to agree that an organization must manage its information to be successful. Active management of information will boost a dynamic process of improvement, and in turn, innovation.
Another aspect of information that is often overlooked or dismissed should be considered. The politics of information need to be consciously managed and viewed as a natural aspect of organizational life, before a true information-based organization can emerge. The "politics" of information addresses the need for consensus about what information is already within the organization, who has it, what form it is kept in, how to harness and use it. Lessons learned from organizations further down this path have demonstrated the value of having a senior executive stand up for information. The executive advocates the critical resource value of information and the need for processes to flow information within their organization in an unrestricted way.
We must also remember that information is not free and does not always flow freely. The old model of hoarding information for personal power must be overcome. As with other resources--forms of wealth and power--there are compelling benefits in rewarding its optimization within the organization. Optimization comes from the open exchange and use of needed information. It is incumbent on senior management to create the internal management culture that will allow the most profitable and benign form of information politics to grow.
Unfortunately, using information as a strategic resource and building processes and structures to support this focus, is not an activity that lends itself to a mechanistic or schematic approach. It involves having a clear vision of the human aspects and attitudes surrounding information and its usage. It is also the recognition and management of the entire information value chain. While this process is difficult to initiate, the value of optimizing corporate information is worth the struggle.
Another aspect of information is that it is not visible or tangible. Information also exhibits a different dynamic than most resources in that it does not follow the law of diminishing returns. Information must be used to have any value at all, and then it enjoys increasing returns with multiple use and as it gets closer to the customer. Leif Edvinsson, Göran Roos, and others have built upon this dynamic. Again, their theories on intellectual capital (IC) are developing ways to manage and value information and other intangibles in organizations.
Information has another interesting dynamic in that it can impart both an overload and shortage all at the same time. We can be inundated with information on a topic, but still not possess the critical piece needed for a decision. Both conditions result in wasted resources. Management of information would alleviate these conditions, by identifying the precise information needed by the corporation and charting pathways along the value chain to capitalize on it better than anyone else. Successful management of information remains focused on value creation.
Managing Your
Information Value Chain
There are most likely multiple efforts currently underway to improve information flow in your organization. Incremental gains will be obtained from these isolated initiatives. However, much more must be done if our organizations are to enter the ranks of the "knowledge-rich, knowledge- managing" companies. There is a need to link the efforts with other programs, strategies and key initiatives to get maximum benefit.
First, your company and its business units must broadcast a clear definition of its strategic direction. A distinctive statement that explicitly defines what the tradeoff winners are: speed, quality, cost, or technological innovation. A statement sets the priorities. If the company can't have or do it all, its employees and customers must clearly understand what comes first. Focusing on the priorities will help to differentiate value from waste.
Second, your company needs to continue to evolve its culture into more of a sharing, learning, teaching organization. It needs to evolve into an organization focused on value creation rather than on individual departments, technologies, or assets. Currently, in most organizations, there are many silos of information within departments and business units. Silos prevent the sharing of information resources, and result in duplication, rework, and delays. Breaking down and linking these silos will increase synergy throughout the company. That synergy is vital if you are to truly achieve sustainable competitive advantage.
Third, speed up the cultural evolution within your corporation by devising organizations, careers & compensation so people want to optimize information flows. Existing best practices are very clear on this point. Organizations must identify, recognize, and reward sharing. Current Western management compensation still gravitates toward the reward of individual excellence. For transformation, your company must re-engineer its reward system toward excellence in filtering, interpreting, synthesizing, and then sharing information that maximizes value creation for the whole organization.
Finally, follow the information value chains in the organization. Identify and create a range of new design methods and process technologies to permit flow and pull over entire value streams. Remove the barriers between units so that sharing can occur. Map out the critical information flows and include them in planning processes with the same attention to detail as other critical resources. In short, treat information as a valuable resource.
Results
Corporations in the twenty-first century will derive value from managing their information. Market leadership is a by-product of creating more value for customers than your competitors. A sustained commitment to strategic use of information will promote value creation via innovation and product improvement. Your company will gain higher levels of competitive advantage by integrating information into the strategies and value chain of the corporation.
What can we as library and information professionals do to advance these efforts? Let's focus on one information value chain--competitive intelligence.
A Strategic Use of Information--Competitive Intelligence
Competitive intelligence (CI) is the process of collecting data on your competitors and the competitive environment, then selecting, interpreting, analyzing, and delivering intelligence for action.
CI is a continual and systematic methodology for evaluating the external forces that impact an organization's ability to succeed. CI's value is in cutting through the mounds of data and information to glean intelligence on a competitor's structure, culture, behavior, strategies, capabilities, and weaknesses. Competitive intelligence provides added insights for your management to make informed decisions.
Given increasing competition in global markets, organizations require a capability that adds the competitive perspective to the overall strategic equation. The competitive environment is vast, competitors are numerous and technological advances staggering. Culling through vast quantities of information can be an endless process leading to little or no true gain.
To handle this situation, companies need to go beyond current spot check practices and establish a systematic process that broadens our understanding of important market dynamics. When set up and run correctly, CI by definition makes strategic use of information. It is important to note that investments in CI take time to pay off, but the benefits will outweigh the costs. CI operations are part of the long-term planning process and usually take five years to reach optimum performance.
Organize to Increase Information Sharing
The CI process brings critical insight to business decision-making. It monitors your competitor's strategic intent while interpreting important trends in the overall business environment to identify opportunities and threats. CI is the tool for managing and making sense of the vital information buried in an increasingly complex and crowded operating environment.
The process will define elements of the information value chain and establish the key topical needs. Prior to delivering information to its customers, a Competitive Intelligence Unit:
1) talks with the customers about their true information requirements;
2) works with them to prioritize the topics according to relative value;
3) identifies appropriate meetings to maintain presence in planning loops;
4) communicates current issues to the field to focus collection efforts;
5) coordinates all forms of information collection;
6) develops techniques to monitor the topics;
7) analyzes the results looking for patterns and nuggets of true intelligence;
8) creates appropriate action-oriented reports.
CI focuses on creating value. It targets the needs of its customers so as to deliver customized services and products. CI is critical to your understanding of competitors' actions and customers' desires. It integrates with the planning process so that there is a constant feedback and refresh mechanism. This is a critical element in dynamic systems such as competitive intelligence.
Impact of CI
The CI information value chain is rooted in the requirements of senior management and business planning processes. Strategic use of its information will have impact upon several areas of key concern to executives and add insight into their decisions.
Monitoring of open information sources in select key areas will eliminate surprises from competitors' moves. Heightened awareness of business trends, emerging technologies and global issues will feed into the organization's planning for improved product development, R&D focus, and resource allocation. Competitive intelligence harnesses the information, within and external to an organization, and culls it down to nuggets of intelligence--intelligence that is delivered to management for action.
Library and
Information Professionals
As organizations struggle with the complexities of effective use of information, recognition of the value of information professionals will grow. We already have the skills to effectively map out information value chains, manage relationships, evaluate information technology tools as well as the ability to accurately and precisely identify what information is needed for specific requirements. We can take these skills beyond the information center and apply them to other information-driven agendas within the organization.
Scores of library and information professionals have been providing data in support of intelligence efforts within their organizations for years. The majority have been limited to the gathering and organization stages in the process. However, the time is ripe to change this model. We can seize the opportunity to move up the information value chain and get closer to the decision makers via participation in the entire competitive process.
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