In & Out: The dilemma of Competitive Intelligence outsourcing, solved

A couple of days ago we participated in the implementation of Antara's Competitive Intelligence platform in a Spanish company. The system, already in use, proposed a story that supposedly corresponded to a potential threat to the business. At first reading, we didn't understand it, but the CEO, present at the session, was able to recognize the reason for its importance.

It was something that appeared almost at the end of the text: A close associate and international supplier had signed a key person from the competition... It was not a threat but an opportunity.

Assessment of the impact of that signal in the market depended on the information you could only know if you were in the business. This made me reflect on the dilemma of outsourcing the intelligence function or not, which so often arises in companies.

A dilemma that is not a dilemma... if we handle it right

We find corporations who say they have outsourced strategic monitoring. Sometimes they simply refer to press-clippings (commonplace, not particularly important), but on other occasions, they have effectively outsourced to a consulting firm that provides them with environment monitoring reports.

If we know where we want to go and we are at the wheel - we are able to decide-, we should not drive blind while our passenger tells us what is happening around the car. But hiring an external consultant does not imply giving up driving with your eyes open, but providing a complementary view of the signals in the marketplace and their influence on our business. "Additional view" implies that we also must develop an intelligence function internally.

If we finally decide to outsource part of the intelligence function, we must bear in mind several factors:

• Minimize company exposure,
• Make a proper selection of the consultant,
• and properly manage the knowledge generated.

Minimize company exposure

In any outsourcing process, we must be clear about what functions to outsource, what corporate information output is involved, and how to control it from both legal and operating points of view.

The questions say much more than the answers. And outsourcing of the Intelligence Function involves transferring key information on those questions. It is essential to define what questions from among those we ask ourselves that we are going to outsource, and what information we will provide our external partners with. We must tell the consultant what we want to know, by indicating the focus on topics such as the evolution of consumption in a new market for expansion, or technological advances related to our plans for future products.

Information sharing must be at all times defined and protected, operationally and legally. Our suggestion is that it be managed exclusively on a corporate intranet site, to which the external consultant has access, with the indisputable prohibition against extracting information via external copies. So, at any time we can curtail access immediately.
Of course, we will have to sign a non-disclosure agreement or NDA binding on any employee in the consulting firm.

Selection of the consultant

The chosen consultancy firm, in addition to demonstrating an in-depth practical knowledge of intelligence procedures, must have knowledge of the market and the technology of our business. It is not easy to accept that anybody can be an "expert in everything" - a clear example of an oxymoron but a very common one. I remember a case of a consulting firm that made no reference in its report on water-stressed irrigation technology to any best practice or technology from Israel. Therefore, we must select someone with experience and knowledge in our market. To do this we must develop an insight about the consultant.

But what if he is working at the same time for the competition? Should they have access to our strategic plans? This is a real dilemma because the greater the experience in the sector the better performance they can offer. But we must decide if we want to take the risk, by clearly organizing and protecting the flow of information, as mentioned above.

Of course, if at any time they talk about a customer of theirs, we should sever the relationship, as it shows that they also talk to others about us. We can even tempt them to do so during the selection process, to see how they respond.

Management of the knowledge generated

Finally, we must bear in mind how we manage information and knowledge that we generate during the relationship. The management of this knowledge must not remain outside the company. The sources and references that support the outsourced analysis and which are provided by the consultant must also be within the reach of our organization. We can thus use this knowledge within the company, or even change providers without losing that information, for which we have paid. In addition, we will have information in real-time, even not fully cooked, and without waiting for the analysis report that will still take time--perhaps a few months--to reach us as a deliverable.

How should we do it? We must use an information platform that allows us to access the sources and references that the external analyst uses, as well as the content of its website. The best option is for the competitive intelligence platform and information managed on it to be under the control of our company, and the members of the consultant team to be authorized users.

This will allow us two things:

• That sources of information, captured signals and analysis reports should be the property of the payer (us). For future exploitation and to have detailed knowledge of the quality of the work done.
• We can easily organize mixed teams of internal and external analysts on a given topic.

Conclusion

Outsourcing a company’s intelligence function is not an "All or nothing" decision, but the search for information and analysis of impact based on the topic, project, or other criteria such as the critical factor for a business decision can be partially outsourced. Therefore the degree of outsourcing is a dynamic aspect that changes over time and has to be homogeneous for all sources of intelligence. In addition, it must be addressed by taking into account key factors, such as the selection of the external partner or how we organize information.

Therefore, it is not a case of outsourcing the Competitive Intelligence function or not. It's that if we do, it should be in a conscious and controlled way, and following some basic rules to our own advantage.

(In & Out   is a 1997 film directed by Frank Oz and starring Kevin Kline)

By Miguel Borrás and Julián Acosta

Antara undertakes that the published content is created by its own team, customers or partners. Antara never outsources content generation. 
The opinions of the authors reflect their own views and not those of the company.