In spite of growing interest in competitive information, many companies do not have effective competitive intelligence programs. There are a number of reasons for this: The practice of competitive intelligence is not well understood. There is often a notion that competitive intelligence is unsavory or unethical. The cost of intelligence may seem high relative to the benefit. Many organizations have a culture that does not value intelligence gathering.

The most important factor for successful competitive intelligence is a favorable corporate culture. For some companies, such analysis isn't valued or effectively utilized, for others it becomes an important decision making asset that more than justifies the cost. A successful competitive intelligence environment generally includes high level management support which ensures adequate funding and participation throughout the organization. As for the ethics of competitive intelligence, companies can go a considerable distance toward understanding their competitors using public information and information from their employees without having to undertake any project that might be regarded as unethical. Finally, insuring the benefits justify the costs requires a program designed to achieve the organization's needs and produce results that actually influence decision making.

The value of competitive intelligence depends on the significance of the information being collected, its accuracy, its timeliness, and its exclusivity. The Internet has brought access to a wealth of free or low cost competitive information such as press releases, SEC filings, and analyst, newspaper, and trade articles. This information is often heavily biased. It has little exclusivity since it is generally freely available, but it is the starting point on which understanding a competitor is built.

Moving away from this extreme,competitive information tends to become more expensive and more difficult to obtain. It is generally not public but may be gleaned from focus groups or interviews. Or, it may be public but highly fragmented. As an example, an analyst working for me came across a personal Web site of an engineer in Europe who was employed by one of our competitors and who proudly described a joint industry and university project on which he was working. Key words from this site led to other public sites from which more information flowed. We learned the project development name, that the effort was to design a 64bit RISC microprocessor, where the work was being done, the intended applications, and that there were 70 engineers involved, later expanded to 150. We acquired considerable information on this processor by mining public Web sites at least a year before the chip was ever officially mentioned by the company.

A key point illustrated by this example is that competitive intelligence is an ongoing process. The picture that developed of this competitor's activity was acquired over time. It is a mistake to think that one can be fully aware of competitive threats by doing the occasional in-depth analysis. One needs a wide spread information collection net and good analysts monitoring what develops.

How might a typical company design a competitive intelligence system? I think one should start with improving information access through an information portal if one does not already exist. Most companies have external information coming in on competitors, markets, customers, and products from some combination of secondary research vendors or news services. Providing easy access to even routine competitive information heightens employee awareness. Coupling this information with a system to improve internal discussions on items of significance takes the system from simple information access into a form of knowledge management.

Most individuals do not want routine competitive information pushed to them via e-mail. They want to be able to do directed searches for what they need with as close to instant access as possible. Companies may easily have 5-10 or more external electronic information sources and several internal databases each having their own unique interface and security system. Some of these may be efficient in access design and searching capabilities, others not. Accessing multiple data sources regardless of their individual efficiency requires considerable time in simply logging on and searching. The traditional information keepers in libraries, and research and analysis functions accepted this as a fact of life, but other users, particularly in management, do not tolerate access delays. With an information portal, a single keyword search results in simultaneous queries, in parallel, of all data sources to which the individual has access without multiple passwords being entered or other actions on the part of the user.

In combination with improved access to conventional information sources, companies need to harness the collective knowledge of their own organization. Virtually everyone in the organization hears bits and pieces of information about the competition. Much of this seems routine and it often isn't clear to the employee what information might be important, who should get it , and whether it is worth the effort to pass the information along.

One solution to harvesting this "soft" intelligence is software that allows each user to define the information they want by company, by product, or by market. When a person acquires a new piece of information about a competitor they can place it in the system with an e-mail. They do not have to know who needs it or have a distribution list. They merely type the e-mail and send it. The software processes the text for keywords and anyone in the company who has indicated they want information on that competitor, or product, or customer, would get it.

Information overload can be prevented by coding the urgency of the information. Unless overridden during input, all items entering the system start as"routine". Thus, executives, managers, and other users can choose to receive information after it is elevated to "priority" or "urgent" status. People who receive a message can append their thoughts, attach documents, see the chain of recipients, and follow the dialogue as important information is discussed. Monitoring the e-mail traffic allows analysts to identify important issues for further action. In short, this technology mobilizes employees into a global competitive intelligence network.

Systems, such as the one described, improve access to market information, provide a method to engage employees as contributors, and concentrate information for competitive intelligence analysts who may take various actions to verify and react to competitive threats as they are identified.