4 Minute Read

Pop quiz: What is the most commonly asked question of competitive intelligence teams?

Answer: Can you show ROI?

If you ask Alysse Nockels, her response would be “ if you’re getting asked this question it is almost too late.” That is because you need to be about 3 steps ahead of the ROI conversation, which means providing valuable insights that drive strategic direction early and often. 

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Your value as a team shouldn’t be questioned. And if you are doing a great job of giving the organization the intel it needs, it won’t be. But first, you have to get out from under the avalanche of data to be able to truly glean insights from that data.

Yet another concern is the coming tide of digitization. COVID, and the changes it has wrought, are leading to more and more digitization of our work. Forrester states: "In 2021, every new digital division will embrace innovation through ecosystems, and we expect a further 50% of enterprises to make cloud-centric transformation a priority, moving business-critical operational apps and all experience apps into the cloud. Agile practices will infuse every facet of planning and execution, spanning business, operations, and technology teams."

Your competitors will be turning to these tools to enhance the efficacy of their marketing and competitive intelligence function, and getting left behind isn't an option.

And this leads us one step deeper, to the next most commonly asked question of CI leaders in particular.

competitor-analysis-how-to-guide

Can you show ROI for the tools you use (or want to use)?

This particular question is most commonly asked when CI leadership is working to get a budget approved for a new CI tool, to help them solve the problem that comes up in the first most commonly asked question.

And this leads us down a vicious cycle for CI teams. We can’t provide the value the organization needs without tools to help us recognize signals from noise amongst the absolute deluge of data in front of us. But we can’t get an approved budget for the tool until we’ve shown the ROI of the team.

And right here is where most CI teams sit, stuck between a rock and a hard place. And most of them ultimately have to try and orchestrate some homegrown Frankenstein version of a tool themselves, with far too much manual effort involved.

Well, we are here to help with at least one of these questions. Our goal is to help you build a rock solid case for the ROI of the tools you need. Then we’ll let you and your team handle providing the incredible insights that show your value to the organization.

The ROI of a CI Tool

When considering competitive intelligence software or tools, ROI can be realized in two different forms:

  1. The ROI of catching otherwise “missed opportunities.”
  2. The ROI in terms of team salaries.

Let’s cover both of them in detail.

Catching Missed Opportunities

The first of the two types of ROI is a “soft” return rather than a “hard” return. Because I don’t have a crystal ball and can’t tell you exactly which opportunities you will have missed by not having software, and exactly how much those opportunities are worth, I can’t give you a specific ROI number.

But what I can do is walk you through the changes in how your team works, and how it affects their ability to generate valuable insights, when you use a true CI Platform.

k360 graph

In our research, we’ve found when taking a manual or “build your own” style approach to CI, your team will likely be spending only about 10% of their time actually conducting information analysis.

Knowledge360 Demo

Their 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.

k360 graph

What kind of opportunities do you think your team could uncover if they were spending 45% more time on analysis? 

Team Salaries

This one is much easier demonstrated by walking through a little bit of math, so we are going to use some averages in order to put numbers behind our calculations, but feel free to run through these same calculations yourself with information from your own team.

According to ZipRecruiter, the national average for the salary of a Competitive Intelligence Analyst is $81,957 per year.

According to the Competitive Intelligence State of Play Report from late 2018, CI teams are composed of an average of 13 members.

So multiplying those numbers together, we can say that the average CI team carries roughly $1,065,441 in salaries.

As noted in the statistics in the last section, if you aren’t using a CI Platform to centralize your intelligence function, only about 10% of each team member’s time will be going toward analysis. 

That means that, of the $1,065,441 in team salaries, roughly $106,544.10 is going toward analysis, while the rest (a whopping $958,896.90!) is going toward activities like information collection and organization, planning, and intelligence dissemination. 

By far the largest piece of that pie is information collection and organization, coming in at 50% of the team’s time, or $532,720.50 of their salaries. Ouch.

Now let’s visit the breakdown with a CI Platform in place.

Suddenly 55% of the team’s time can now go toward analysis which comes out to $585,992.55 of their salaries. And now only 45% of their time is going toward non-analysis, or low value, activities, coming out to $479,448.45 of their salaries.

Now let’s turn that into an ROI. If a reminder is needed, ROI is calculated by taking the final value of the investment, subtracting the initial value of the investment and then dividing the new amount by the cost of the investment.

The cost of the investment will vary depending on what tool you use, but let’s take Knowledge360 as an example. Our most popular subscription, the Professional Level comes in at $750 per user per month. Multiplying that by the 13 team members comes out to $9,750 per month, or $117,000 per year.

Thus the ROI equation becomes:

$585,992.55 - $106,544.10
____________________________

$117,000

 

Remember: $585,992.55 is the investment of salaries going toward analysis with a CI platform, and $106,544.10 is the investment of salaries going toward analysis without a CI platform.

Then multiplying by 100 to turn the result into a percentage, that calculation comes out to a 410% return on investment. I don’t know about you, but please sign me up for an investment that gives me that kind of return right now!

Final Thoughts

No matter the size of your team, investing in the right competitive intelligence tools (our vote is for a centralized CI platform!) can provide a significant ROI. 

If you are interested in learning more about how over a 5-year period, Knowledge360® users have saved more than $315,000 over non-users, then get a demo today. 

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