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If you’re setting out to build your own Competitive Intelligence (CI) function, it can be difficult to know where to start. But with so much complexity to navigate in almost every industry, having a high-performing CI team is one of the keys to success. 

Starting and building out a competitive intelligence function has a wide range of benefits, but it’s important to remember that like any new function, it won’t be an overnight success. There may be some growing pains at first as you onboard new team members, implement new software, and fine-tune frameworks and deliverables. If you’re the leader of a new CI function, there’s a fine balance between building a long-term, strategically focused team and the need to deliver quick, tangible wins that showcase the value of CI to the organization as a whole.


There’s a fine balance between building a long-term, strategically focused team and the need to deliver quick, tangible wins.

At its core, effective competitive intelligence develops actionable insights that enable leaders to make higher-quality strategic decisions. Access to high-level intelligence helps executives make important decisions with greater confidence: whether that’s short-term, tactical choices, or the shaping of long-term strategies that affect the entire firm. Other benefits of building a competitive intelligence function include unlocking of the ability to:

There’s no shortage of reasons that many of the world’s top organizations invest heavily in competitive intelligence initiatives. In our current era of rapidly changing markets and increased disruption, it’s vital to have a CI function that enables your organization to smoothly navigate increasingly challenging competitive environments.  

But how exactly do you build a competitive intelligence function? The 4 key steps to building out a successful CI function are:

  1. Identifying Goals & Objectives
  2. Defining KPIs and Metrics
  3. Building Your CI Team
  4. Evaluating Tools & Resources

Let’s explore each of the key elements in more detail.

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Identifying Goals & Objectives

When you’re starting to outline the role competitive intelligence will play in your organization, it’s important to ensure that all the key stakeholders are aligned on a consistent set of goals and objectives. That starts with defining exactly who your stakeholders are. 

The output of any competitive intelligence work is usually shared with a series of internal customers. These may be department heads, executive leadership, or even sales people using the insights to gain a tactical edge on their competition. The CI team must understand exactly what the goals and objectives are for each of these core end-users. 

By actively involving stakeholders in defining the goals and objectives of the CI function, you can ensure that everyone is bought into the process.

Once you’ve done that, align on the frequency that the CI function will share updates with these groups; whether that’s in real-time, or on a weekly, monthly, or even quarterly basis. Agree on exactly what the output will look like, and work to develop a consistent format that supports your stakeholders’ needs in a concise, easy-to-read format.

By actively involving stakeholders in defining the goals and objectives of the CI function, you can ensure that everyone is bought into the process. Co-creating the remit and scope of the CI team helps boost decision makers’ confidence that the output they receive will help them make higher quality decisions.

Defining KPIs and Metrics

Defining, and then tracking, the Key Performance Indicators (KPIs) and metrics that measure the success of your CI function can also present challenges. After all, the true value of CI is delivered in improved strategic decision-making, and it’s hard to track that in numbers. 

However, there are certain metrics that you can monitor to establish the effectiveness of your CI function. Of course, these will be heavily influenced by your organization's overall goals, as well as the level of resources the CI team is able to access. Here are a few ideas of KPIs and metrics you might use to get started:

  • Engagement & Reach
    • Intelligence requests received
    • Newsletter views
    • Dashboard logins
  • Decisions Supported
    • Recommendations made
    • Recommendations acted on
  • Impact on Revenue
    • Revenue changes after CI team has been implemented
    • Tactical wins, such as competitive sales won because of CI insights

If you’re looking for benchmarks to base your expectations on, we suggest you read The State of Competitive Intelligence: Q2 2021, a quarterly report from Cipher that shares benchmarks and best practices from various industries.

Building Your CI Team

The majority of CI teams are relatively small, with a few notable exceptions at larger organizations, particularly those in the life sciences industry. There’s also much debate about whether CI teams should be centralized or decentralized. 

 

Appoint an organizational champion for CI, and designate them to be your “CI Quarterback”.

 

Regardless of the size and scope of your CI function, there are a few best practices to bear in mind as you build out your team. Before kicking off the hiring process, appoint an organizational champion for CI, and designate them to be your “CI Quarterback”. This person will be in charge of fostering relationships with relevant stakeholders across the organization, recruiting emerging leaders to the CI team, and building out the infrastructure that’s required for success. 

At Cipher, we conducted a study in partnership with James Madison University to explore the make-up of effective CI teams in the life sciences industry. The study found that many organizations only have a couple of dedicated professionals on their CI team: a mid-senior level manager and an entry-level analyst. 78% of the professionals we studied held a Bachelor's degree, with the vast majority of these people having gained their degree in a field outside of Marketing or Business Administration. 

Once you’ve identified the characteristics of the people you want to run your CI function, look inside your organization first before hiring internally. An understanding of how the organization functions, what it’s overarching strategy is, and who the key stakeholders are will go a long way to determining the early success of your CI team. These days, the CI function is an attractive location for emerging leaders, and it’s possible your next CEO could come from your CI department.

Finally, consider where your CI team should be located in the overall corporate structure of your organization. The majority (61%) of CI professionals sit in either the Strategy or Marketing departments, and many of these teams report to senior leaders of their organization. 

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Evaluating Tools & Resources

Running an effective CI function is impossible without a comprehensive selection of tools and resources. To be successful, it’s critical that from the outset, your CI function uses clearly defined information sources, and has a concrete plan in place for collecting, analyzing, storing, and sharing information. 

There are two key decisions to make in this phase: the sources of information your team will use, and the CI tools they’ll use to analyze this data and share intelligence. 

When it comes to narrowing down the sources of information used by the CI team, it’s helpful to first appreciate all the different types of data available. You might access publicly-available data, but to get greater levels of detail, it’s often necessary to subscribe to more sophisticated databases. There’s also the question of whether to include primary research, such as interviews and focus groups, and it’s also necessary to consider how you’ll import field intelligence gleaned by your sales team. 

 

Choosing the right CI tool can transform the process of managing a huge variety of data sources from a nightmare to a walk in the park.

 

Choosing the right CI tool can transform the process of managing a huge variety of data sources from a nightmare to a walk in the park. Tools like Knowledge360Ⓡ automate much of this process, quickly harvesting data and structuring it in an organized manner that’s significantly easier for analysts to work with. Knowledge360Ⓡ comes with a range of built-in data pipelines, and uses sophisticated Natural Language Processing (NLP) algorithms to automate data tagging and organization. 

Learn more about how Knowledge360 can transform the way your organization competes

Start Building Your CI Function Today

As you begin the process of building out your CI function, there are a few key concepts that you should keep in mind to avoid the common “CI Cycle of Death” that we see so many organizations fall into. Make sure you take a long-term, strategic view to building your team. It’ll result in a better outcome, and will help you build a sustainable CI function that consistently contributes to the growth of your organization.  

Allocate appropriate levels of resources to the CI team, making sure that they’re set up for success when it comes to people, data sources, and technology. While at first it might be challenging to directly track the ROI of these expenses, monitor the overall business performance, and also incorporate metrics that track how stakeholders across the organization are interacting with the CI team. 

If you’re looking for an additional level of support, the team at Cipher is here to help. Our team of competitive intelligence consultants have years of expertise standing up CI teams and building advanced CI capabilities. We’ll apply best practices from the world’s top practitioners to help your organization quickly set up a top-notch CI function that immediately begins delivering value. 

To learn more, schedule an introductory call with our consulting team today