Competitive Intelligence in Business Decisions - an Overview

Abstract

EXECUTIVE SUMMARY The key to competitive intelligence is process of turning raw data into valuable information, turning that valuable information into strategy, and turning strategy into actionable items, thereby improving business performance and operations by maintaining organizational advantage. This paper will set out to further explore nature of Competitive Intelligence as a key contributor to process of organizational Knowledge Management Systems, enabling faster more intelligible decision-making. INTRODUCTION Competitive Intelligence, which is defined as purposeful and coordinated monitoring of your competition within a specific marketplace, plays important role Knowledge Management and process of organizational decision-making. Competitive Intelligence is forward-looking and anticipates competitors' future activities. Management Information Systems vendors, such as SAP, go so far as to say that Competitive Intelligence, which is also commonly referred to as Business Intelligence, enables organizations to reach into their vast supplies of data and rapidly turn them into information for knowledge management (http://www.sap.com/solutions/bi/). In order to fully understand role of Competitive Intelligence Knowledge Management, it is important to first examine properties of Competitive Intelligence and Knowledge Management as separate entities within organizational decisionmaking. Intelligence, as opposed to Competitive Intelligence, can be defined as an analytical process that transforms tumultuously gathered competitor and market information into actionable knowledge about competitors' capabilities, intentions, performance, and position; as well as final product of that process. Competitive Intelligence, conversely, involves use of public sources to develop data on competition, competitors, and market environment, transforming that data, by analysis, into [useful] information (McGonagle and Vella, 2002). Data developed under this context can be identified as Knowledge Assets (KA). Within competitive business environments, businesses must be effectively prepared to manage Knowledge Assets (KA) order to remain viable. Knowledge are the knowledge regarding markets, products, technology, and organizations, that a business owns or needs to own and which enable its business processes to generate profits, add value, etc. Competitive Intelligence is a type of Knowledge Asset. Effectively managing Knowledge Assets involves process of Knowledge Management (KM). KM is defined as identification and analysis of available and required knowledge and knowledge asset related and subsequent planning and control of actions to develop both and processes so as to fulfill organizational objectives. KM however, is not limited to managing Knowledge Assets, but includes management of processes, and subsequent planning and control of actions to develop both and processes so as to fulfill organizational objectives (Macintosh, 1999). Effective Knowledge Management is critical because in today's information-driven economy, companies uncover most opportunities and ultimately derive most value-from (KA) rather than physical assets (Santosus and Surmacz ,2001). Thus, companies should not solely focus on their tangible if they wish to remain competitive. Employing effective Knowledge Management strategy requires overcoming some challenges such as unwillingness of employees to participate Knowledge Management, allowing technology to dictate Knowledge Management within organization, not having a specific goal as it relates to Knowledge Management, failure to recognize that Knowledge Management, alone, is not strategic, and inability to distinguish useful knowledge from useless knowledge. In end, effective Knowledge Management strategy should encompass following order to prove successful within organization (Santosus and Surmacz, 2001): * Foster innovation by encouraging free - flow of ideas * Improve customer service by stream - lining response time * Boost revenues by getting products and services to market faster * Enhance employee retention rates by recognizing value of employees' knowledge and rewarding them for it * Streamline operations and reduce costs by eliminating redundant or unnecessary processes. …