Are you ready?

For the longest time, business intelligence (BI) has concentrated on getting the best out of data available from operational systems. However, by and large, external factors were omitted, leading to silo, introspective thinking and ill-informed judgments by top executives.

In today's competitive business landscape, a company's performance and competitive readiness cannot only be judged by its growth and profit (or loss), but must be viewed in relation to market footprint and economic conditions, among others.

A more comprehensive view of intelligence is required for successful strategic planning.

Gerhard Botha is principal consultant at PBT.

Consequently, the time has come where a more comprehensive view of intelligence is required for successful strategic planning. The saying: 'what you don't know can hurt you' has never rung more true. In fact, 90% of BI happens outside data warehouses or enterprise systems.

As such, within the market, there are two key trends to note, which impact the way intelligence is gathered. The first market trend refers to the financial health of the economy, where the emphasis is on financial conditions. The second refers to new trends within the sector that may impact business outlook.

Furthermore, there are key market aspects to understand and develop strategies around - that assist organisations in better positioning themselves against competition. These include:

* Regulatory requirements - knowing these can help businesses stay out of trouble.
* Geopolitical considerations - including deregulation, privatisation and nationalisation.
* Technological advances - which impact every organisation and can create a distinct competitive advantage.

The above can be considered enrichment to BI, and are required to provide a full, comprehensive intelligence solution by incorporating intelligence from outside one's organisation.

So, what has been missing from the overall picture?

Competitor intelligence involves the gathering, analysing and distribution of information pertaining to competitors' products, customers, or any other related aspect that will assist executives in making strategic decisions, by utilising knowledge assets available to the organisation.

The main purpose behind competitor intelligence is for the early identification of risk and opportunities in the market, before it becomes general knowledge. Businesses need to know or pre-empt what their competitor will do before they do it - for competitor information to be of strategic importance, they need to be able to counter their action pre-emptively.

This process involves the collection of generally available factual information, including market statistics, financial reports and mainstream news.

Some sources of competitor intelligence include:

* Sales representatives
* Market research
* The Internet
* Industry research
* Trade shows/conferences
* Press, giving an idea of marketing activity

However, it is important to be aware of legal and ethical implications that are involved when utilising certain sources.

From here, there are four stages in monitoring competitors - known as the four 'Cs':

* Collecting (information)
* Converting (information into intelligence)
* Communicating (the intelligence)
* Countering (using the intelligence)

Supplier intelligence relies on gathering information on the company's suppliers, in order to avoid supply chain surprises.

Information is critical for supplier intelligence, and may include the industry structure and dynamics, the suppliers' upstream value chain, and lastly, the supplier's capacity and financial strength.

This intelligence will empower the company when negotiating contracts and pricing, and give the business the agility to react on demand to changes for any products and services.

In an enduring effort to realise a customer's lifetime potential value and be able to cross-sell and up-sell, businesses need to build lasting customer relationships. However, in only a handful of cases can these businesses build relationships the old fashioned way, by personally knowing the customer. Companies need to rely on intelligence, market-based analysis, targeted marketing and touch point analytics to get under the customers' skin.

The problem is that even companies that are advanced in attaining profitable customer intimacy admit they do not know enough about their customers, and wading through masses of data is not making it any easier.

New emphasis is now being placed on consumer-centric business models. It is estimated that it costs between six and 10 times as much to obtain a new client compared to retaining and selling to an existing client. The key to retention is: knowing the customer better than the competitor does - what are their expectations and preferences?

Customer segmentation is an effective way to cluster customers. It is important that these clusters of customers behave in a similar way. To understand the customer, an organisation needs to combine lifestyle segmentation in combination with demographical and geographical intelligence.

Much of the information needed for customer intelligence already exists within an organisation - it just needs to be utilised.

There are many other factors to consider when determining competitive readiness and the gathering of intelligence. Some of these include regulatory requirements, geopolitical considerations, as well as technical advances, as all of these will impact the information collected and used to ensure a competitive advantage is reached.

Today's business environment has evolved into a complex organisation impacted by many different factors. Analysing the above to collect information and then using that information strategically is key to remaining functional and adds to enriching a company's BI solution.