Commercial intelligence

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Commercial intelligence (CI) is the process of defining, gathering, analyzing, distributing accurate, and relevant intelligence regarding the products, customers, competitors, business environment, and the organization itself. [1] This methodical program affects the organization's tactics, decisions and operations. [2] It is a form of open-source intelligence practiced by diverse international and local businesses.

Contents

Commercial Intelligence can be obtained and analyzed in various ways that include:

On the other hand, business intelligence is a misnomer for data mining and enterprise dashboards that present useful patterns or distillations of internal information to the executives.

Usage

A 1998 study by the Futures Group, a Glastonbury, Connecticut-based consulting firm, indicates that 82% of companies with annual revenues exceeding $10 billion and 60% of those with annual revenues exceeding $1 billion now have an organized intelligence system. [4]

While most larger companies have specific departments devoted to Commercial Intelligence, mid-sized companies tend to hire Commercial Intelligence firms, and smaller business owners are more likely to do it themselves. [5]

Primary and Secondary Intelligence

Primary Sources of Intelligence

Primary sources of Commercial Intelligence include:

Secondary Sources of Intelligence

Secondary sources of CI include:

Intelligence from both classifications can be found within the scope of open source intelligence (OSINT). [7]

The Commercial Intelligence Cycle

Efficient and successful CI is a constant cycle that consists of 5 steps:

  1. Planning; deliberating with decision makers to discover their intelligence needs.
  2. Gathering; collecting activities that are conducted legally and ethically.
  3. Analysis; interpreting all the information gathered and assembling the suggested actions.
  4. Dissemination; presenting the findings to the decision makers
  5. Feedback; studying the decision makers’ responses and understanding their need for continued intelligence. [8]

Ethics in Commercial Intelligence

Ethical Challenges

Misrepresentation

Misrepresentation in CI is a form of cyber engineering. It is the act of falsely identifying yourself and bluffing people into giving you personal information they wouldn't normally give. Misrepresentation is the most common issue that subdivides numerous CI practitioners into many unclear ethical issues.

The most common types of misrepresentation include:

a. Excluding specific details in one's identity: Lying about one's identity to gain access to certain information is known to be unethical amongst CI practitioners. However, there is a thin line between lying about one's identity and omitting certain details about it. Some practitioners believe that it is acceptable to deliberately skip over some details to obtain information.

For example: Person X is both a part-time student as well as a director of a large company. As part of a school assignment, X is expected to collect information about a company that just so happens to be one of X's employer's biggest competitors.

In this case, it is believed by some CI practitioners that not revealing the fact that X works for the company in addition to being a part-time student is completely ethical. In other words, X is misleading the competitor into thinking the information given to him will be used to complete a school assignment and nothing more, although, in reality, he would be gathering commercial intelligence to present to his employer.

However, these types of situations raise some ethical concerns because the competitor may not have provided certain information knowing X works for a direct competitor. The competitor was not lied to but deliberately misled in to give out specific information about the company.

b. Overhearing classified information: Some CI practitioners believe that if you overhear a competitor's conversation in a public venue, then the information discussed that was previously classified becomes ethical for you to use to your advantage.

They believe that it is not necessary to reveal their identity since the conversation occurred in an open and public place, and it is the competitors’ fault that their information has been leaked because they should have been more aware of their surroundings and been more secure with their information. On the other hand, some argue that the CI practitioners are at fault because they deliberately planned on being in those surroundings in hopes to overhearing some information, which raises concerns about the ethics of the matter.

c. Not Disclosing true intent on how information will be used: Many CI practitioners are paid by their clients to get as much information about their competitors. To do so, they would survey the competitors and suggest to them that they are simply collecting industry information, all the while not revealing who they are working for, thus, not disclosing the true intent on how the information gathered is going to be used.

All 3 misrepresentation issues share a common theme, which is: “What is the intent of the CI practitioner?” Judging by a person's intent, we can conclude whether or not the situation is ethical or non-ethical.

Client Conflict

Client conflict means any situation in which a practitioner is faced with a conflict of interest between a former and current client. The practitioner must attempt to determine how to act in the best interests of several clients in the same or substantially related matter. [9]

This type of situation usually arises with CI practitioners who are consultants. However, a clear solution is obvious; the practitioners agree that they should never service competing clients at the same time to keep classified information secure. In addition, another conflict may arise in the CI consultant and client relationship. The client usually hires the consultant to gather as much information about their competitors.

However, there is an ethical issue concerning the length in which a consultant would go to retrieve the required information; how much is too much? When the consultant ignores the cost at which they are seeking this information, they tend to stumble upon various ethical issues, and it is these ethical issues that clients don't want to be associated with that push them to hire a CI consultant. [10]

Cases of Organizations Accused of Unethical CI Practices

Oracle Corporation

In 2000, Oracle Corporation hired a detective agency to investigate two research groups that supported Microsoft during the antitrust trial. After attempting to buy garbage, the agency discovered that those two research groups were falsely identifying themselves as independent advocacy groups when they were in reality funded by Microsoft.

Oracle and the hired detective agency may have acted in questionable matters to obtain that information, but they believe that the outcome justifies their actions. Larry Ellison, Oracle's chairman, says: “I feel very good about what we did. […] Maybe our investigation organization may have done things unsavory, but it's not illegal. We got the truth out.” [11]

WestJet

In May 2004, Air Canada filed a $5 million corporate espionage lawsuit against WestJet after discovering that their rival had hacked into Air Canada's internal employee-only website over 243,000 times in a period of 10 months. WestJet used the confidential information it found to rearrange its load schedules as well as adjust routes and it significantly reduced service from the Hamilton airport and increased service in Toronto. [12]

WestJet later issued a rare apology to its rival and Robert Milton, the chief executive of parent ACE Aviation Holdings Inc, admitting that its actions of online snooping "were both unethical and unacceptable" and ended up paying AirCanada $15.5 million in legal fees as well as donating $10-million to children's charities in the names of both airlines. Moreover, Hill, one of the founders of WestJet later resigned from his position as vice-president of strategic planning in July 2004. [13]

Hewlett-Packard

In 2005, HP filed a lawsuit against its former VP, Karl Kamb, for $100 million, claiming Kamb had betrayed the company and appropriated its trade secrets as well as its money to start up his own flat-panel-TV company, as he was working on the TV project for HP. In January 2007.

Kamb filed a countersuit. Not only did he deny stealing trade secrets but also claimed that HP was aware of what he had done with its money.

He claimed that HP had asked him to gather classified information on Dell, whose entry into printers had threatened HP's most profitable line of business. In 2002, the CI unit hired Katsumi Iizuka, former president of Dell Japan until 1995, selling HP information on Dell's plans to enter the printer business. The information they gathered revolved around printer models, specifications, terms, and prices, many months before their launch. Furthermore, HP was accused of pretexting, which is the act of lying about one's identity to obtain privileged data and information, to obtain Kamb's private phone records. [14]

Society of Competitive Intelligence Professionals

Historic Development

The Society of Competitive Intelligence Professionals is one of the only global membership organizations in the rapidly growing field of competitive intelligence and business strategy. SCIP is a global not-for-profit association whose 7,000 members conduct competitor research and analysis for large and small companies, and help manage planning competitive strategy.

Established in 1986 in Washington DC, it is currently headquartered in Alexandria, Virginia. It focuses on enhancing the success of its members through education, leadership, support, and networking. Since 1986, SCIP has developed drastically and globally, and has, today, chapters all around the world as well as alliance partnerships with numerous independent affiliate organizations. [15]

On July 8, 2010, the SCIP Board of Directors voted to officially change the 25-year-old non-profit organization's name from "Society of Competitive Intelligence Professionals" to "Strategic and Competitive Intelligence Professionals". [16]

Chapters Overview

SCIP Chapters are the best way for members to build relationships within the competitive intelligence discipline in their area. Its events are open for anyone to attend, become involved, and enjoy the benefits of programming and networking. The SCIP offers many opportunities to its members including exceptional educational, and networking experiences with leading industry experts, as well as opportunities to increase knowledge by gaining access to rare and distinctive practices, tools, and publications.

In addition, the SCIP offers Collegiate Chapters for students who show interest in the world of commercial and competitive intelligence. Participant students in the Collegiate Chapter are offered training and education programs that represent unique opportunities for professional advancement. They are also benefitting exceptionally in terms of leadership skills, career development, and indispensable CI know-how. Also, the SCIP awards mentoring programs and scholarships to students who are deemed prominent, promising, and capable business students. [17]

Ethics

Economic espionage represents a failure of Commercial Intelligence, which uses open sources and other forms of ethical inquiry. Importantly, SCIP mandates that all this be done within a strictly ethical framework, which is why it has agreed upon a code of ethics;

See also

Related Research Articles

<span class="mw-page-title-main">Industrial espionage</span> Use of espionage for commercial purposes rather than security

Industrial espionage, also known as economic espionage, corporate spying, or corporate espionage, is a form of espionage conducted for commercial purposes instead of purely national security.

Oracle Corporation is an American multinational computer technology company headquartered in Austin, Texas. Co-founded in 1977 by Larry Ellison, who remains executive chairman, Oracle ranked as the third-largest software company in the world by revenue and market capitalization as of 2020, and the company's seat in Forbes Global 2000 was 80 in 2023.

<span class="mw-page-title-main">Public relations</span> Management of public communication of organizations

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Consumer privacy is information privacy as it relates to the consumers of products and services.

A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates to situations in which the personal interest of an individual or organization might adversely affect a duty owed to make decisions for the benefit of a third party.

In business, a competitive advantage is an attribute that allows an organization to outperform its competitors.

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A data broker is an individual or company that specializes in collecting personal data or data about people, mostly from public records but sometimes sourced privately, and selling or licensing such information to third parties for a variety of uses. Sources, usually Internet-based since the 1990s, may include census and electoral roll records, social networking sites, court reports and purchase histories. The information from data brokers may be used in background checks used by employers and housing.

<span class="mw-page-title-main">Mark Hurd</span> American businessman (1957–2019)

Mark Vincent Hurd was an American technology executive who served as CEO and as a member of the board of directors of Oracle Corporation. He had previously served as chairman, chief executive officer, and president of Hewlett-Packard, before his forced resignation in 2010. He was also on the board of directors of Globality and was a member of the Technology CEO Council and board of directors of News Corporation until 2010.

Competitive intelligence (CI) is the process and forward-looking practices used in producing knowledge about the competitive environment to improve organizational performance. Competitive intelligence involves systematically collecting and analysing information from multiple sources and a coordinated competitive intelligence program. It is the action of defining, gathering, analyzing, and distributing intelligence about products, customers, competitors, and any aspect of the environment needed to support executives and managers in strategic decision making for an organization.

Marketing intelligence (MI) is the everyday information relevant to a company's markets, gathered and analyzed specifically for the purpose of accurate and confident decision-making in determining market opportunity, market penetration strategy, and market development metrics. Marketing intelligence is necessary when entering a foreign market.

Business war gaming, corporate war gaming or business wargaming is an adaptation of the art of simulating moves and counter-moves in a commercial setting. In a complex global and competitive world, formulating a plan without testing it against likely external reactions is the equivalent of walking into a battlefield without the right weapons or a plan to win. In situations where the cost of being wrong is high, war games can be very helpful to understand from a 360-degree perspective the external opportunities and challenges of all the key stakeholders in the industry.

<span class="mw-page-title-main">Hewlett-Packard</span> American information technology company (1939–2015)

The Hewlett-Packard Company, commonly shortened to Hewlett-Packard or HP, was an American multinational information technology company headquartered in Palo Alto, California. HP developed and provided a wide variety of hardware components, as well as software and related services to consumers, small and medium-sized businesses (SMBs), and fairly large companies, including customers in government, health, and education sectors. The company was founded in a one-car garage in Palo Alto by Bill Hewlett and David Packard in 1939, and initially produced a line of electronic test and measurement equipment. The HP Garage at 367 Addison Avenue is now designated an official California Historical Landmark, and is marked with a plaque calling it the "Birthplace of 'Silicon Valley'".

Seena Sharp, author of Competitive Intelligence Advantage, is a recognized leader in Competitive Intelligence. She founded one of the first competitive intelligence company, Sharp Market Intelligence, in the US in 1979, in Los Angeles, a company that serves clients across the US, Canada, Europe, Asia, and Africa.

Market intelligence (MI) is gathering and analyzing information relevant to a company's market - trends, competitor and customer monitoring. It is a subtype of competitive intelligence (CI), which is data and information gathered by companies that provide continuous insight into market trends such as competitors' and customers' values and preferences.

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Yves-Michel Marti is a pioneer in the field of Competitive Intelligence. He is the founder of Egideria and of the French branch of the Society of Competitive Intelligence Professionals.

The Fuld-Gilad-Herring Academy of Competitive Intelligence is an educational organization bringing professional training to the field of competitive intelligence (CI). Established in 1996, the academy has expanded its training to thousands of managers from 58 countries and six continents at its campuses in Cambridge, MA and Brussels, Belgium. The academy is the only CI-dedicated institution to be externally accredited by the International Accreditors for Continuing Education and Training (IACET). It grants the Competitive Intelligence Professional (CIP) certification based on a 9-course program, including a course in ethics and a pioneering course in business war gaming. To be certified, managers must complete the required coursework and pass a certification exam. To accommodate managers whose main interest is in using CI tools and managers working as CI professionals, the academy offers two levels of certification: a basic CIP-I, and an advanced CIP-II. The academy is currently the largest training institute in its field.

A human resources management system (HRMS), also human resources information system (HRIS) or human capital management (HCM) system, is a form of human resources (HR) software that combines a number of systems and processes to ensure the easy management of human resources, business processes and data. Human resources software is used by businesses to combine a number of necessary HR functions, such as storing employee data, managing payroll, recruitment, benefits administration, time and attendance, employee performance management, and tracking competency and training records.

Economic consulting is the practice of providing advanced economic, financial, and statistical analysis for use in a litigation environment. Law firms, state institutions, and other organizations may rely on economic consultants to produce research, analyses, reports, and testimony to be used in trial.

References

  1. ↑ "Commercial Intelligence (CI)". www.kbmanage.com.
  2. ↑ Kahaner, Larry (1996). Competitive Intelligence: How to Gather, Analyze, and Use Information to Move Your Business to the Top.
  3. ↑ "Commercial Intelligence" (PDF). www.cips.org. 2007.
  4. ↑ Miller, Stephan H.; Bentley, Samuel (1998). Competitive Intelligence Magazine.{{cite journal}}: Missing or empty |title= (help)
  5. ↑ Miller, Stephen H. "Competitive Intelligence -- An Overview" (PDF). www.ventes-marketing.com. Archived from the original (PDF) on 2015-05-13. Retrieved 2014-10-28.
  6. ↑ "Collecting Competitive Intelligence". www.exinfm.com.
  7. ↑ Levy, Joe (2011). "Primary Intelligence vs Secondary Intelligence". www.clearci.com.
  8. ↑ Herring, Jan P. (1998). "What Is Intelligence Analysis?". Competitive Intelligence Magazine.
  9. ↑ Stevens, Sylvia (2009). Former Client Conflicts.
  10. ↑ Trevino, Linda; Weaver, Gary (1997). "Ethical Issues in Competitive Intelligence Practice: Consensus, Conflicts, and Challenges". Competitive Intelligence Review.
  11. ↑ Wong, Wylie (2000). "Oracle chief defends Microsoft snooping". www.cnet.com.
  12. ↑ Teel, Gina (2007). "Founding member to depart from WestJet".
  13. ↑ Ratner, Jonathan (2006). "WestJet apologizes to Air Canada for snooping". www.canada.com. Archived from the original on 4 March 2016.
  14. ↑ Varchaver, Nicholas (2007). "A pretext for revenge". www.fortune.com.
  15. ↑ "Strategy, Market & Competitive Intelligence". www.scip.org. Archived from the original on 2013-01-13. Retrieved 2014-10-30.
  16. ↑ Alexandria, Va (2012). "SCIP Changes Name to Strategic and Competitive Intelligence Professionals". www.prnewswire.com.
  17. ↑ "SCIP Chapter Overview". www.scip.org. Archived from the original on 2014-10-30. Retrieved 2014-10-30.
  18. ↑ "SCIP Code of Ethics for CI Professionals". www.scip.org. Archived from the original on 2014-10-13. Retrieved 2014-10-30.
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