Intelligence Solutions Through The Use Of Expert Tools_cim_march_april_09

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Intelligence Solutions throughthe Use of Expert Tools Avner Barnea, the Ono Academic College, Israel Since 2000, there have been intensive efforts in Israel to expand the use of expert tools to support the objectives of competitive intelligence. I have touched upon this issue in two previous articles and in presentations as well (Barnea 2005, 2006, 2007, 2008). As these efforts in Israel have grown, I have decided to look at this issue through the eyes of those who have made use of these tools by focusing on firms that have purchased them and are utilizing them in their competitive intelligence (CI) program. More than one CI dedicated tool has been developed and offered to the Israeli market, but most were not successful or have given up the CI practice and moved to more profitable areas. I have specifically looked at the purchasers of one current tool, which I will refer to as Specific Expert Tool (SET). I have to confess that I’m a great believer in the use of expert tools to support CI activity and, as such, I have been promoting it in Israel and abroad as much as possible. I cannot imagine that CI will lag behind while the world moves forward by utilizing these types of tools for all kinds of business activities.

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ABOUT THE RESEARCH SET

BASIC INFORMATION

The Specific Expert Tool purchased by the persons interviewed in my study was developed in Israel at the end of the 1990s to answer the needs of the local CI market. The developers did not conduct thorough research before starting to develop the SET, and many elements were added later to match the requirements set by their clients. The main features of the SET were the capabilities to:

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Gather information from the web, both automatically and manually. Receive information from primary sources mainly through the internal network. Index all the information received from both internal and external sources with sophisticated search and retrieval options. Analyze primarily by adapting link analysis discipline to CI requirements and creating dynamic mapping of information about the changes in the competitive theaters, competitors, suppliers and other influential factors in the competition. Text analysis capabilities were also supported. Prepare reports from the information gathered and analyzed, and disseminate the information to internal users through the Outlook system. Integrate with other internal information technology systems (mainly business intelligence) to create a better “big picture.” Support CI professionals to better manage the overall process, monitor KITs responses and other related tasks.

The level of success selling the system was much lower than anticipated. In all, about 250 Israeli large and medium sized companies have active CI functions. Most of them, however, are not using any CI expert tool. The SET firm estimates that they have presented their system to 100 potential clients based in Israel. Approximately 60% of these presentations were initiated by the SET

Table 1: Number of SET Systems Installed Year

Number of firms

2000

2

2001

3

2002

3

2003

4

2004

4

2005

2

2006

2

2007

1

Total

21

firm while only 40% were requested by potential clients. (See Table 1 for the number of systems installed.) SET successfully introduced itself to most of the large industries (see Table 2). Although it was a leader in this field, the company experienced slow market growth and was unable to reach a significant market share and revenues in Israel. The plan to move to international markets was shelved as a result of insufficient resources. As I reported in my 2006 paper on CI in Israel, approximately 50% of the large Israeli exporters have active CI programs. In the total SET installed base of 21, 14 companies operated primarily in local markets and 7 in www.scip.org 41

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Table 2: SET Systems Installed by Industries Industry

Number of firms

Telecom

4

Food

2

Defense

2

Pharma

2

Finance

1 2

Energy

2

Advertising

2

Medical devices

2

Hi-Tech

2

Total

21

global markets. The above results clearly indicate that most Israeli companies that have CI functions are not using any CI expert tool. In Israel, a company with $3050 Million in revenues is considered medium sized, and higher revenues makes it a large company. In the SET installed base, five firms with $30-50 million in sales, 16 with more than $50 million. SET is considered useful mainly for larger firms in the local market, although we see there is also a demand among smaller firms. CI units in Israel generally consist of a staff of one operating under considerable pressure to deliver results while working with a limited allocation of resources. In the SET installed 42 www.scip.org

base, 16 of the firms had only one CI professional, and only five had more than one. The small size of these CI units gave reason to believe that first class expert tools might be welcomed and would play a significant role in improving their performance. As we can see, however, the expectations were not met.

THE SCOPE OF THE RESEARCH

As shown above in Table 1, 21 SET systems were sold in Israel between 2000 and 2007. Eighteen of the people in the companies who purchased the system took an active part in this research. Those who opted out of this research did so for reasons that are not relevant to the study. This research was conducted primarily through personal interviews. During 2008, I met each of the CI professionals in the 18 companies and discussed with them the questionnaire outlined below. Senior executives involved in the CI process were not directly interviewed, but I learned of their views through the CI professionals who participated in the survey. I also spoke with CI professionals of companies that did not purchase SET to hear their views.

Question 1. Who initiated acquiring the SET? Results (18): CI professional (15) Senior executive (2) Other (1) The purpose of this question was to find out who initiated the process of exploring the opportunity of acquiring the SET in each firm. The results show that it was usually purchased at the initiative of the CI unit. A follow-up question revealed that senior executives were generally not involved until the final stage of the acquisition despite the efforts of their CI staff to involve them earlier. However, my impression

was that the CI staff made insufficient efforts to recruit the executives from the outset for fear that they would not support the purchase process.

Question 2. What were the main reasons for purchasing the SET? Results (18): General desire to improve CI capabilities (4) CI professionals felt they needed better tools (10) Unsatisfactory results from CI to meet executives needs (4) This question attempted to determine the main motives behind the decision to acquire the SET. A followup question found that it took quite a long time, in some cases up to six months, to acquire internal approval for the purchase. The responses suggest that the reason for purchasing the SET product came primarily from the CI staff, who felt that they could perform better by using enhanced tools.

Question 3. What was the overall satisfaction with CI “products” in the firm before installing SET? Results(18) (1=lowest, 5=highest): Rating 3 (10) Rating 4 (8) This question was focused on discovering the level of satisfaction with the CI from the point of view of the executives as observed by the CI staff. It appears that the CI directors were sensitive to the need to supply better end products and felt that utilizing an expert tool would allow them to deliver higher value reports to their internal customers.

Question 4. What was the overall satisfaction of CI users 6 to 12 months after SET was installed? Results(18) (1=lowest, 5=highest): Rating 3 (8) Rating 4 (9) Rating 5 (1) Competitive Intelligence Magazine

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Table 3: SET Contribution to CI work Total

5 (Highest)

4

3

2

1 (Lowest)

18

-

-

3

5

10

Improved gathering process

18

-

5 28%

8 44%

5 28%

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Improved analysis and final CI products

18

-

3

15

-

-

Improved CI dissemination

18

8

10

-

-

-

Improved KIT management

18

-

9

9

-

-

Improved CI efficiency

18

2

8

8

-

-

Improved CI reputation

This question sought to discover whether the installation and use of the SET expert tools changed the level of CI response to the needs of their executives. Comparing the results of questions number 3 and 4, it is apparent that the level of satisfaction attributed to the CI products after activating the SET is higher, but the change is not dramatic. These results are consistent with my contention that SET and programs similar to it are merely tools and CI has other issues to address for better performance, which were not covered in this survey.

Question No. 5. In your best judgment, how much did SET contribute to your CI performance? This question attempted to identify how SET has contributed to CI from the point of view of the CI professionals. The results indicate that the foremost improvement was achieved in the analysis process, but the satisfaction level with respect to the gathering performance of the SET was low. Using the SET, the CI staff became more effective while their perception was that their professional reputation had improved. A further question Volume 12 • Number 2 • March/April 2009

revealed that all the respondents except one indicated that its lack of an early warning system was significant. It must be emphasized that the high score for improving KIT management shows that CI units need tools that will help them to fulfill many missions they run simultaneously. The developers of the SET have admitted that the strongest capability of the system was in the analysis, while gathering was considered less effective. They felt that the primary challenge of CI lies in the analysis and this is where CI is expected to give meaningful added value. They took the information gathered in this study and intend to improve the system’s gathering capabilities.

Question 6. Has the SET fulfilled your initial expectations? Results (18): Yes (16) Moderately (2) No (0) This question attempted to find out the bottom-line perspective of how satisfied the CI staff was with the SET. The results show that the

CI staff favored the SET, though with some reservations, as indicated in the responses to Question 5. The expectation that the SET would develop into a more advanced tool was only partially met.

Question 7. What was the reason for deciding not to purchase SET? Results (12): Lack of resources/ too expensive (5) Not important enough (5) Did not meet our needs (1) Have another solution (1) This final question was asked of the twelve CI directors of companies that ultimately decided not to buy the SET. They had all seen presentations of the SET and had given serious consideration to becoming equipped with this system. It appears to me that there is a direct correlation between the “lack of resources” and “not important enough” responses. My perspective is that if the tool was found to be important enough, they would have found the resources to buy the system.

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intelligence solutions Conclusions

Since the mid-1990s, Israel has been recognized for its outstanding software products in a wide range of industries sold successfully worldwide. Expert tools for CI have also acquired a strong reputation, as demonstrated by the recent Fuld and Company software report. My 2006 paper indicated that the picture regarding the adoption of CI tools in Israel was more complicated than originally thought. While CI has had slow but steady growth, its support tools have suffered from a limited distribution. The rapid growth of the software industry in Israel has affected the development of specific CI solutions, but unfortunately the demand has been lower than expected. The SET product did not gain momentum or become a conventional intelligence solution for the local CI market needs. The gap between the high expectations of SET and its low sales results was not only a great disappointment; it also discouraged efforts to further develop this solution. This focused study revealed that local firms were not prepared to invest in new CI tools that would enable CI professionals to perform better. As a result, most CI professionals have to continue using generic tools like Office, which offers unsatisfactory solutions to their CI program needs. My discussions with the companies revealed that many executives did not support their CI staff members’

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requests to purchase SET, possibly as a result of not understanding CI needs rather than a lack of resources. This has implications for the vision of the potential value of CI. This study shows that the high level CI solution has not reached its potential target market due to a lack of support by senior executives who did not see it as critical to move CI forward in their firms. A technological solution cannot become a standard in an industry without being recognized as such by those who are making the decisions and allocating the resources for this purpose. Finally, while the SET was not the perfect solution, it was a tool that improved CI performance in the companies that implemented it. This observation provides additional encouragement to continue presenting CI discipline, its business value and needs in executive development programs and academia, and to make education on this subject an integral part of the activities of every CI director.

References

Barnea, Avner (2005). “Link analysis as a tool for competitive intelligence.” Competitive Intelligence Magazine, V8/4 4 July-August. Barnea, Avner (2006). “Israel study on competitive intelligence.” Competitive Intelligence Magazine, V9/2, March- April.

Barnea, Avner (2006). “Why startup companies fail to adopt CI.” Competitive Intelligence Magazine, V9/1, January-February. Barnea, Avner (2007). “Why is CI methodology still behind CI technology tools?” Competitive Intelligence Magazine, V10/3, MayJune. Fuld, Leonard (2008). Intelligence Software Report 2008-2009 http:// www.fuld.com/Products/ISR2008/ HomePage.html.

Avner Barnea is a former senior member of the Israeli Intelligence Community. He holds a MA from the Hebrew University of Jerusalem and graduated from the Top Executive Program in Marketing Management from the Tel Aviv University Graduate School of Business Administration. He is a strategic consultant in the field of competitive intelligence and business strategy in Israel and abroad. A lecturer on competitive intelligence in the MBA program of the Ono Academic College, Avner is also a guest lecturer on competitive intelligence at the Hebrew University of Jerusalem Business School and in various business executive training programs. He has extensive experience in the integration of competitive intelligence systems in Israeli corporations. Avner can be reached at: [email protected].

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