13 Oct 10 Value of competitive intelligence


Competitive intelligence, to the extent that it provides an early warning system for companies, is akin to an insurance product that protects them from nasty surprises.

Like insurance, for companies that do not do CI, its value is only perceived when something goes wrong. One of our clients lost more than half its market share in a span of two years. It is easy to see that had they monitored their competition on a regular basis, most of the loss could have been avoided. The lost market share is the value of CI that the company did not undertake. While all is hunky dory, the value of CI is difficult to establish.

However, unlike insurance, competitive intelligence less widely adopted and is far less commoditised. You can’t throw money at it and buy it like insurance. It takes regular investment in terms of time and deliberation, to keep the CI process updated and relevant.

By relevant, we mean the extent to which it impacts decisions. CI that does not affect decision making has no value at all.

Relevance comes from quality. And this in turn comes from the depth, perception and competence of the CI team; and also the level of participation of the company’s employees in the CI process. The value of a CI process that benefits only a handful of people is critically evaluated and debated. However, if it benefits the entire company, it is easy to solicit company wide participation and its value is rarely questioned. So the problem of quantifying its value does not arise. From the point of view of establishing the value of CI, therefore, it must address the needs of all decision points in the company. This argument works well for a company that already has a CI process.

For a company that is starting to put in a CI process, the investment will be made in the first instance only after its value is estimated and accepted. And this is not trivial. Should companies wait to be hit by market shocks to realise that they need to mitigate risks by investing in CI?

Varsha Chitale

Varsha led the competitive intelligence practice at ValueNotes. As part of her drive to educate India Inc. on the merits of competitive intelligence, she often conducted webinars and seminars on CI for senior executives of Indian companies.

  • Suheil Patel
    Posted at 12:20h, 13 October Reply

    Nice post Varsha, considering today’s volatile market scenario CI becomes imperative in order to only track competition but also to evaluate one’s own company.

    However as I can understand, CI would only turn out to be an effective insurance product against business risk or for that matter tracking competition. Do you think CI would prevent companies from market shocks which are inevitable?

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