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You’re trying to decide if you really need competitive intelligence software, or if you can be budget-conscious and get scrappy and creative with tools you may already have. We’ve all been there. Especially in times of budget crunch. And for some, the absolute right answer at a given time may be to preserve the budget and get scrappy.

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We regularly speak with prospects who are trying to decide if they should buy a competitive intelligence software tool, or if they should use a combination of existing tools (like SharePoint for instance) to build something similar.

This article is meant to help you understand the pros and cons of both choosing the Build Your Own (BYO) approach or purchasing competitive intelligence software, so you can make an informed decision about which is right for you, right now.

Start with Your Goals In Mind

Building out a market and competitive intelligence (M/CI) practice helps you deliver the insights and intelligence your business leaders need to make faster and more informed decisions by combining existing internal data with relevant external data sources. When looking at the whole picture, your business can make better predictions and business decisions to gain a competitive advantage.

When faced with the decision of where and how to invest in the competitive intelligence tools to support your M/CI team, it is important to return to the goals of the team. Most teams are seeking to execute on four key goals:

  • Identify New Opportunities: Knowing where and how your competitors influence a market can help adjust your strategy. You can identify and monitor market trends to gain valuable insight and see when a new opportunity presents itself.
  • Gain Market Clarity: Maximize your competitive advantage with clarity into where your competitors are positioned in relation to you and the market.
  • Reduce Risks & Uncertainty: A clear picture of your current market and competitive landscape will remove uncertainty and eliminate speculative decision making.
  • Support Key Decisions with Data: You increase confidence in strategic investments when they are backed with marketing intelligence and competitor data.

So, in deciding if the BYO approach vs. competitive intelligence software is right for you, you’ll have to evaluate how each will help support your overall goal for your competitive intelligence team.

Generic Tools, or the BYO Approach

These are software suites that are designed to support a wide variety of business functions and business processes. They often require significant customization to be applied in order to meet the needs of a specific M/CI function. 

We can often think of these in the category of “free competitive intelligence tools” because your organization may have already purchased them, or have them for other purposes. Many organizations choose to cobble together BYO competitive intelligence solutions out of these tools.

There are other tools that fit into this category, but by far the most prevalent of these is Microsoft SharePoint®. Generic software tools like SharePoint are incredibly flexible and adaptable and can often be customized to provide an acceptable solution to enable full-scope M/CI work. 

However this tends to create what is commonly referred to as "the SharePoint problem" where organization and management is a very manual process, and over time leads to messy and overcomplicated databases of information. 

Purpose-Built Competitive Intelligence Software Tools

These solutions typically collect data from multiple sources, serve as a repository to store and organize this data, offer capabilities to analyze the data, and provide the functionality to help analysts collaborate and distribute the insights they generate to their internal stakeholders. 

These competitive intelligence products are built specifically for the needs of M/CI teams and come out-of-the-box with the majority of features and functionality that are needed to support the growth of a competitive intelligence function thus solving the SharePoint Problem.

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The solutions that comprise the competitive intelligence tools market offer a wide variety of data, features, and functionality, and it’s important for potential buyers to understand the differences between competitive intelligence software providers before making a decision on which tool to purchase.

Marketing and Competitive Intelligence Information Overload

The most common problem companies face today in their competitive intelligence function is not finding information, but rather finding the signal in all the noise. Businesses need relevant, timely, and accurate information to make smarter decisions, faster.

So what is the biggest problem that results from information overload?

For decades, competitive intelligence initiatives around the world have fallen victim to an all too familiar cycle of surprise, reaction, stockpiling, overload, and, ultimately, death. Our research shows that up to 75% of typical competitive intelligence activities add no value to the business they serve.

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In our research, we’ve found that when taking a BYO approach, your team will likely be spending only about 10% of their time actually conducting information analysis. We refer to this as the "SharePoint Problem".

The remaining time will be spent finding information, managing and tagging that information, maintaining complex rules for structure, and working to make that structure consistent across everyone who interacts with tools used to hold data.

We’ve seen that when automating routine tasks with the right CI software, such as information collection and organization, your team will get to spend up to 45% more time on strategic intelligence analysis thus solving the SharePoint Problem.

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In looking at the make-up of your team, your first step should be to ask yourself if you have the resources to spend on the extra effort on the mundane, low-value tasks.

To translate this into dollars, let’s run through a short example. According to ZipRecruiter, the national average for the salary of a Competitive Intelligence Analyst is $81,957 per year. So, let’s say you have two CI Analysts on your M/CI team. That comes out to $163,950 in salary for both team members.

If you are taking the BYO approach, 10% of those salaries will most likely be going to competitive intelligence activity, and the rest to data management. This comes out to $16,395 per year toward analysis and a staggering toward $147,555 toward routine data management.

Flipping that around, with the right Competitive Intelligence Software, those same two people can be spending up to 55% of their time on analysis and gaining actionable insight. That comes out to $89,812.50 spent on analysis vs. $73,777.50 on data management.

The monetary value doesn’t just end there either. Let’s return to our goals of identifying new opportunities, gaining market intelligence, reducing risks and uncertainty, and supporting key decisions with data.

With your CI team spending 45% more time on the analysis that ultimately feeds your ability to meet these goals, you’ll want to consider how much value you’d put on the additional opportunities gained, risks avoided, and decisions made that your analysts will uncover when they aren’t having to put that time toward data management.

So, depending upon your team structure and how you split analysis from data management and organization, you can determine if the cost for competitive intelligence software justifies this improvement.

The Cost of Time and “Getting it Right”

Depending on your need, using a generic competitive intelligence tool can feel like driving a nail with a wrench – it isn’t as efficient as using a hammer, but it can get the job done. One benefit of using a generic tool is that, in many cases, your company may have already purchased it. Leveraging that prior investment may allow you to stretch your M/CI budget.

You can learn more about your needs by assessing yourself across our CI Maturity Scale. Use our self-assessment tool to figure out where you stand today or read about the five different stages of CI maturity more in-depth below:

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You can choose to customize a generic competitor analysis tool, but this often adds far more time and effort into your ramp-up period than you’d expect before you are really driving value out of it. Companies often underestimate the effort and resources required to accomplish this level of competitor intelligence customization and to update and adapt it over time. 

Couple that with over-tasked and under-resourced internal IT development teams that generally have a list of priorities a mile long, and we often see these customization initiatives go half-finished or take years to truly get off the ground.

Much of the time, with the BYO approach we’ll see organizations that put up with a less than ideal solution because their customizations never fully make it off the ground.

So, if you are confident in your organization’s ability to plan the right customizations to your generic tools and your technical team’s ability to prioritize and execute those customizations to your prescribed timeline, then you may be fine with a BYO approach.

Again, let’s return to our goals of identifying new opportunities, gaining market insight, reducing risks and uncertainty, and supporting key decisions with data. If we take too long to get a solution off the ground or are living with a less-than-ideal solution, how many opportunities are we missing, risks are we overlooking, or decisions are we leaving unmade?

What you’ll want to consider in this case is if the cost in time and effort to execute the set-up, and long term management of a BYO solution, as well as the opportunity cost of what we might be missing, and again weigh that against the cost for purpose-built competitive intelligence software.

Final Thoughts

You absolutely can spend time agonizing over very small details or features of different competitive intelligence tool solutions, but ultimately your decision should come down to the ROI of using a tool. Evaluating how a tool allows you to deliver on the goals of your team and determining if the investment justifies improved ability, should be the ultimate decision-maker.

And please, keep in mind that intelligence is not found, it is created.

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