Competitive Intelligence Business Case

Every project always has to start with a business case. And every time it all boils down to the same ingredients. No – building a CI business case is not easy. The same goes for BI for instance, but at least the benefits of a BI system are a lot easier to measure afterwards. In this article I’ll discuss the CI business case and I would love to hear your comments and experience on this.

In an ideal situation, prior to implementing a CI system, you are able to calculate the ROI. If you are able to specify both what it’s going to cost and what the benefits are in the currency of your choice, and if the following ROI is acceptable by management, you are likely to get a ‘go’. Let’s assume that we made a proper estimate of the cost. That leaves a calculation of the benefits. Roughly, I think this side of the business case can be divided in three categories.

The first category consists of efficiency savings. Automation of information gathering and increased support in the analysis process can save a lot of time, up to several FTE in large organizations. Add to that increased efficiency by optimization of CI processes – eliminating overlapping efforts for example – and you have a solid base for your business case. This is the only category that is easily translated in cash. If this happens to lead to an acceptable ROI, quit reading this blogpost and run to your superior for a signature. And consider yourself extremely lucky.

Still here huh? The other two categories are more or less antagonists of one another. The first is another way of saving cost and the latter leads to increased revenue. Although these are definitely not mutually exclusive, you probably need to focus on one of them. In mid crisis I’d advise the first for most companies, now that we are recovering, the second gains interest. Of course some companies do invest anticyclical so you need to bear that in mind.

Let me clarify the first category by a common example of cost saving caused by CI. A lot of markets are relying heavily on innovation and R&D, think (high) tech equipment, pharmaceuticals, chemicals, et cetera. R&D projects are costly and time consuming. The worst thing that can happen is that you create a brilliant new product, only to find out you have been beaten by an inch by your opponent who took the liberty to acquire the patent for the new product days before you would have. A proper CI system will warn you way earlier in the process. If you find out one of your rivals is working on the same project, and if you can only conclude that you will not be able to overtake them, then you had best cancel your project. The remaining time and effort equal cost savings. If you decide that you can increase your R&D capacity and beat them still, you avoided a (huge) risk, saving even more money (because you avoided a wasted project). So basically these cost savings are all related to avoiding threats.

Cost savings may be hot, personally I do not think of them as very attractive. Which is why I kept the best for last: the opportunities you can create for your company by using a good CI system! That is where the fun starts. There are endless lists of benefits of CI systems. You monitor your environment, change in particular, to an extent that you have never done before. You see shifts in demand, and naturally your next generation products fill this newly discovered niche in the market. You see new geographical markets getting ready for your products and you are the first to conquer it and with a marketing budget next to none you become the market leader. And I could go on quite some time this way. The only downside is that it’s virtually impossible to translate this into cash, because upfront you do not know what you do not know yet but will find out with CI. And even afterwards it’s hard to prove that that spectacular increase in sales had anything to do with your competitive intelligence activities. Now it really all comes down to your excellent interpersonal skills to convince your superior that he is going to be rich, without being able to draw him a picture of the number of zeros in the amount. Go for it, because it’s worth it.

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One Response to “Competitive Intelligence Business Case”

  1. [...] Dit blogartikel was vermeld op Twitter door Nicolas BLAS, Jeroen van Luik en Master_IE_UT1, Dink Intelligence. Dink Intelligence heeft gezegd: RT @JeroenvanLuik: New post: "Competitive Intelligence Business Case" http://bit.ly/dweT4N <– please share your opinion! [...]