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What is and what is not competitive intelligenceCompetitive Intelligence

A broad definition of Competitive Intelligence (CI) is the action of ethically and legally gathering, analyzing, and communicating information about third party players in one’s competitive arena - from competitors, to suppliers, customers, influencing parties, regulators, distributors, potential new competitors, and so forth, to be used by companies in their planning and decision making. The process of collecting, storing, analyzing and communicating this market intelligence is today an institutionalized process in most large companies in the West (about 97% of Fortune 500, and 82% of Fortune 1000).

A more focused (and strategic) definition of CI regards it as the organizational function responsible for the early identification of risks and opportunities in the organization’s various markets before these 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 intelligence which is a perspective on developments and events aimed at yielding a competitive edge.

The term CI is sometime viewed as synonymous with competitor monitoring, but that narrow "pigeon holing" is a mistake and yields lower benefits to organizations who fail to use intelligence optimally. Strategic application of intelligence scopes the whole industry, or business segment, and competitors are just one aspect of its responsibility of coverage. Making organization more competitive requires going beyond monitoring competitors and reacting to their moves. An internal intelligence analyst identifies proactively risks and opportunities in the organization’s competitive arena, by interpreting the total picture emerging from developments across many players and various forces in one’s industry.

Milestones in the field’s remarkable evolution – a short history

Organizations collected commercial intelligence since the first trade took place between Homo sapiens’ clans (or maybe earlier?). Books on organizational intelligence collection appeared as back as 1967 with Fancis Aguilar’s "Scanning the Business Environment" the leading academic book at the time. These early attempts at formal intelligence activities for businesses remained mostly academic and rather ineffective until 1980, when Michael Porter of Harvard Business School published his seminal book, "Competitive-Strategy: Techniques for Analyzing Industries and Competitors" which laid down the theoretical foundation for applied CI.

Theoretical efforts aside, the field of applied CI was born in the late 70s, when early vendors of business intelligence such as Fuld & Co., and Washington Researchers (headed by Leila Kight), pioneered the offering of competitive research to corporate clients. In 1985, Jan Herring, a retired CIA chief technology analyst, created the first intelligence function at Motorola, followed in 1989 by Ben Gilad, then a strategy professor at Rutgers University, who created a CI function at Kellogg. The institutionalization of CI as a formal activity among American corporations, however, can be traced to 1988, when Ben Gilad and Tamar Gilad published the first book detailing an organizational model of a formal corporate CI function, "The Business Intelligence System", which was then adopted widely by a majority of large US companies and later by leading European companies such as Shell and Novartis. In 1985, Leonard Fuld published his best seller, "Competitive Intelligence- How to Get it, How to Use it"."

In 1986, Fuld and Kight among several other vendors created SCIP, The Society of Competitive Intelligence Professionals, as the professional association in the field. In 1996, Ben Gilad and Jan Herring co-founded the Academy of Competitive Intelligence, and in 1999, joined forces with Leonard Fuld to establish the first accredited professional training program in CI, The Fuld-Gilad-Herring Academy of Competitive Intelligence, offering the only IACET-accredited certificate in competitive intelligence, the CIP™. The rest is history, and all this history is in our program.

 

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