SOURCE: Fuld & Co.

October 21, 2005 09:00 ET

Could Career Risks Outweigh Benefits for Competitive Intelligence Technology Users? Newly Released Survey Speculates

Majority Laud Software Functionality; Compare Successful CI Technology to a "Labrador Retriever" or a "Bee"

CAMBRIDGE, MA -- (MARKET WIRE) -- October 21, 2005 -- Business executives worldwide who use competitive intelligence (CI) technology that helps them monitor competitors are reasonably satisfied with the products on the market -- but feel they may be risking their job success when committing their companies' budgets to such packages, according to an international survey of 219 executives conducted by Fuld & Company in its 2005 survey. This is the first time Fuld & Company, or any organization, has formally sampled users about their experiences using competitive intelligence software.

The largest single segment of respondents, 42%, compared their competitive intelligence (CI) technology to a bee, an insect that "creates a useful pattern or swarm of information and helps me connect the dots." Nearly one-third (29%) saw their solution more like a Labrador retriever, "good at fetching and retrieving."

A vocal minority of nearly 30% of respondents gave the software low grades, comparing it to a parrot (11% -- "just spits back what you sent to it; no added value"), a slug (12% -- "just takes up space and never seems to go anywhere"), or a gerbil (6% -- "lots of action, spins its wheels and offers no substance whatsoever -- and definitely consumes my time").

Fuld & Company is a Cambridge, MA, consulting firm specializing in competitive strategy and intelligence that for each of the last four years has conducted assessments of the dozen or so packages of software that promise to help executives automate many of the tasks around monitoring competitor strategies and activities. These surveys have described dramatic technological improvements -- even from as recently as a year ago -- as well as a mixed bag of capabilities in the products. For example, the previous year's 2004 report disclosed that most technology-based intelligence systems were home-grown and not assembled from an array of off-the-shelf vendor packages. At the same time, only 19% in that survey were satisfied with their companies' existing intelligence processes. Most did not expect their products to help them with analysis or early warning -- even though this for many is the Holy Grail of intelligence technology.

In the 2005 survey, nearly half of respondents (46%) come from North America, over a quarter (28%) from Europe, 16.5% from the Asia-Pacific region, 4.5% from Africa, and 5% from Latin America. They represent a broad cross-section of management positions, from corporate development (28%), information specialist/librarian (17%), marketing and market research (9%), intelligence analyst (9%), and even senior management (3%). Over one-quarter of those responding are experienced owners of such technology (28%), but 72% were "newbies" -- those just beginning to shop around for a CI technology (but very likely have worked with similar technology in the past).

In a surprising result, it appears that managers who purchase these intelligence technologies feel they may be unwittingly set up for failure. The report indicates those acquiring competitive intelligence technology often find themselves under intense pressure from superiors to begin producing results quickly. More than half of the respondents in the Fuld survey said they are expected to have a CI program up and running smoothly within a year of purchase. In an earlier Fuld study examining failed competitive intelligence operations, one of the greatest reasons for failure was the lack of time allowed for the intelligence process to grow. Moderately successful intelligence programs need at least three years to grow, build internal networks and deliver consistent, valued assessments to management. World-class operations may need as much as a half-dozen years to mature and become part of the corporate culture. (1)

Do those purchasing such packages take on a certain level of risk? Yes. A majority of the respondents said they felt either like a "high-wire walker at the circus, knowing I have a chance to succeed but am really on my own," (36%) or "I am staring outside an open door of an airplane about to jump and wearing a parachute that may or may not open." (20%).

According to several producers of competitive intelligence software, the survey results confirm their own experiences in the marketplace. "The reality is that there is little patience these days for software to become fully productive," said Jim Andrus, president of Netro City, a Manchester, NH, seller of competitive intelligence software systems. "Exacerbating the problem is the fact that competitive intelligence in many companies is buried within the marketing arena, and is not a defined function."

Misconceptions about the power of competitive intelligence software also creates problems, according to Matt Kelly, president of Strategy Software Inc. of Mill Creek, WA. "Some competitive intelligence managers think that CI software is a process-in-a-can," he said. "It isn't. Good process consultants and/or well trained CI managers mitigate the risks by delivering a process, the infrastructure to support it, advice on rolling it out, materials for setting management expectations on deliverables, instruments and techniques for measuring ROI, and training to end users on using or not using intelligence."

Jordan Frank, president of Traction Software of Providence, RI, noted, "CI software should help automate the manual labor and processes involved in search, discovery, capture, management, distribution and retrieval of information and analysis content. Planning and analysis require sophisticated human discourse, and they gain more human cycles if software can automate tedium."

According to Leonard Fuld, president, the survey results suggest that competitive intelligence software and technology have progressed significantly over the last five years.

"It's gone from being a curiosity to becoming a useful component of many companies' competitive intelligence efforts," he said. "The challenge facing these companies is to avoid the temptation to equate the act of buying software with the process of establishing a complete functioning competitive intelligence program. I'm troubled that top-level executives are using the expense of competitive intelligence software as an excuse to demand 'instant results'. Successfully implementing a competitive intelligence program is a long-term process that occurs over some number of years -- it's an investment of time, energy, and money in a strategic function that pays growing dividends rather than instant payouts."

To download the 2005 survey, go to the following site, click on the "scroll" icon on the right, and fill in the brief registration form:

(1) The Vanishing CI Unit, Fuld & Company, 1999.

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