BI, DW, AND COMPETITIVE INTELLIGENCE

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BI, DW, AND COMPETITIVE INTELLIGENCE

• Paul Gray

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BI Relation to Other Software

OLAP
Data Warehouse
Visualization
CRM/dB Marketing
Data Mining
Business Intelligence
DSS/ EIS
Knowledge Management
GIS
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Developments in BI

• Software is said to be getting more
  sophisticated. However, a lot of that is just in
  the pretty pictures.
• Major efforts being made to move to UNSTRUCTURED
  data
• Large deployments going on BI for the Masses
• Deployment of BAM and BPM

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Business Process Management

• BPM is a collection of software, business
  processes, and measures of business success
  (metrics, KPI) that enable an organization to
  understand, act on, and influence business
  performance.
• Business Activity Monitoring is a subset of BPM.

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Business Process Management

• Technologies include
• Dashboards Scorecards KPIs
• OLAP Consolidation ETL
• Report and query tools Planning
• Uses its own data mart to gather info. from data
  warehouse, other data marts

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Business Activity Monitoring

• BAM systems report business activity process
  outputs and key performance indicators in (near)
  real time.
• Used by firms that produce large no. of different
  items or ship large no. of different items from
  supploers
• E.g., KPI for key accounts going out of bounds,
  e.g.,Ed Houghtons presentation

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Developments in Data Warehousing

• Rise of the Operational Data Store as firms move
  to
• Business Process Management
• Business Activity Monitoring
• Still report 50 failure rate!
• Real Time Data Warehouse to support ongoing
  analysis and action. Loaded more frequently than
  ODS

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Developments in Data Warehousing

• Prototype and Exploration DW
• Both separate from operational DW
• Prototype DW used to create new designs. Speeds
  time to operational changes
• Exploration DW used for DSS and analysis where
  questions are ad hoc
• Exploration DW is temporary and transient.
  Designed to solve specific problems

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CI AND STRATEGY

• Strategy involves thinking about the future of
  the firm
• Need input on
• the firm and its capabilities (what we can do,
  (business intelligence)
• the capabilities and the intentions of
  competitors (competitive intelligence) and
  vendors.

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CI AND STRATEGY

• Includes not only existing competitors but also
  future competitors
• Includes trends and changes outside the firm
• in the economy,
• in the industry,
• in society (demographics, tastes, )
• Cant make decisions without understanding the
  environment

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DEFINITION

• The real secrets are not the facts of nature but
  the intentions of people
• J. Robert Oppenheimer
• Competitive Intelligence is the gathering and
  analysis of information about happenings outside
  the firm.

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Why CI?

• How can I learn about competitors
• How do I protect against CI done against me?
• What are the ethics of CI?
• A case study The CIA

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Why CI?

• 90 of Fortune 500 have CI
• lt10 of their managers understand what it is,
  does
• CI is not espionage and is legal
• CI is filled with uncertainty

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Futurist Thinking

• CI requires futurist thinking
• Executives deal with past (historical events,
  financial statements) that already happened
• Need to look at what might happen
• Executives dont like uncertainty
• are risk averse
• dont want to change what they are doing
• dont want scenarios
• Problem The world is changing quickly. With IT
  and globalization, past experience is not as
  valuable in strategic planning as it used to be

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Typical Reponses-Implementation Issues

• Even in forward looking companies
• Emphasis is on short-term return for stockholders
• Early warnings from CI are ignored
• Go through stages of
• Denial
• Anger
• Ambivalence
• before reaching acceptance

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Value of CI

• Intangible and tangible
• Lead times on new technologies coming?
• A way of fending off competitors
• Example Nutrasweet saved 50M from looking at
  what competitors were doing in preparation for
  their key patent (aspartame) running out what
  plants they were building, who they were
  approaching (eg Coke, Pepsi) and offered
  discounts to keep the business

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Other Cases

• Motorolaearly warning on a brand strategy by
  Japanese competitors being test marketed in
  Australia-NZ
• A network company (Larscom)- Monitored vapor
  ware hype to see what was coming in 6-8 months
  monitored competition on revenue/employee
  time-to-market effort to increase stock value

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CI Toolbox

• Information gathering
• Internet, news services, automatic alert services
  (e.g, Comshare)
• Information storage
• Data bases, data warehouses
• Information security measures
• Information analysis
• Data mining, data visualization, simulation,
  intelligent systems
• Information dissemination
• Intranet, groupware (eg Lotus Notes) E-mail

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CI Toolbox Analysis Tools

• Using Analysis Tools
• Competitor profiles 89
• Financial analysis 72
• SWOT 55
• Scenarios 54
• Win/loss analysis 40
• War gaming 28
• Conjoint analysis 25
• Simulation/modeling 25
• (SWOTstrengths, weaknesses, opportunities,
  threats)

• Effectiveness of tools
• SWOT 63
• Competitor profiles 52
• Financial analysis 46
• Win/loss analysis 31
• War gaming 22
• Scenarios 19
• Conjoint analysis 15
• Simulation/modeling 15

( rating very effective, effective)
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Vulnerable Points

• Executive speeches, interviews
• Engineering, science papers at meetings
• Govt. permits and loan forms
• Web sites, press releases
• Suppliers, partners who brag
• Help wanted ads
• User manuals
• Facility tours
• Overheard conversations in public/lost laptops
• Phone calls to employees who answer questions

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Protecting Yourself

• Figure out what to protect
• Learn from CI group
• Have an enterprise-wide defense policy
• Be aware that executives can blab
• Protect your strategic plans!

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CI ETHICS

• IS IT LEGAL? ETHICAL?
• http//www.fuld.com/Tindex/WhitePapers/EthicalandL
  egalIntelligenceGathering.html

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SURVEY

• Based on 122 respondents in US and in Europe.
  Mostly little or no formal legal or ethical
  training
• Presented ethical dilemma.
• Asked if it was Normal, Aggressive, Unethical,
  Illegal behavior.

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Scenario 1

• 1.      Hotel and documents left behind 
• You become aware that your competitor has its
  board meeting at a certain hotel, so you drop by
  that hotel towards the end of the day to see what
  documents someone had left behind.
• Normal __ Aggressive __ Unethical __Illegal __

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Scenario 2

• You are sitting in an airplane and overhear a
  competitor state to his friend information that
  appears to be confidential. They dont know who
  you are or that you can overhear them.
• Normal __ Aggressive __ Unethical __Illegal __

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SCENARIO 3

• You are attending a trade show. You take off your
  badge that identifies you as a competitor, and
  you then approach a booth at the exhibition. You
  tell the representative you have an interest in
  the product.
• Normal __ Aggressive __ Unethical __Illegal __

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SCENARIO 4

• You are attending a trade show. You take off
  your badge that identifies you as a competitor,
  and you then enter a private suite that is
  labeled For Clients of Company X Only.
• Normal __ Aggressive __ Unethical __Illegal __

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Europeans vs. No. Americans

• American ethical behavior more stringent than
  Europeans
• Example Scenario 4 (Private Suite)
• Legal environment approx. same, differences are
  cultural.

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License to Know

• Based on interview with CIAs CIO
• Must consider both structured and unstructured
  information
• Structured information nicely fits into
  relational data bases
• Unstructured does not.
• Multiple sources
• Multiple media, languages
• Source CIO Magazine
  

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Sources of CIA Information

• Reports from agents in the field
• Satellite photographs
• Publications, studies, wire feeds, and the
  Internet
• Material can be text, video, radio, newspapers

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Problems for Both Industry and CIA

• Understanding other countries
• Local economics
• Political stability
• Terrorism and organized crime
• Friendly or hostile to business
• Data is usually unstructured
• Problem is information overload -- not finding
  data in general, but finding data you need.

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Data, Information, Knowledge

• A classic KM problem
• Start with data
• Create the correct construction of a query
• Make sense out of the response
• ---
• Must decide whether to write programs, buy
  programs, or co-develop it

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Need to Know

• Distribute CI on the basis of need to know
• One way human being acts as gate-keeper decides
  who is to receive data.
• Not that far along in automating this
• Problem error-of-first-kind second kind

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Findings Scenario 1

• Viewed action of going back and collecting
  documents at the hotel was either Aggressive
  (46NA, 50Europe), or Unethical (42NA, 33
  Europe).

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Findings Scenario 2

• Vast majority says it is normal behavior to
  overhear information while strapped in your seat.
  No one saw it as illegal.

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Findings Scenario 3

• The North Americans believed action was
  aggressive (34) at best and likely unethical
  (50), 6 believed it was illegal.

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Findings Scenario 4

• North Americans think the action is either
  unethical (48) or illegal (44)