Separating CI From the Sleaze

According to a recent article in USA Today, incidents of corporate espionage are on the increase, thanks to cheap, easy-to-use technology devices and increasing numbers of displaced and disgruntled workers due to the recession.

"Corporate espionage using very simple tactics — much of it carried out by trusted insiders, familiar business acquaintances, even janitors — is surging. That's because businesses large and small are collecting and storing more data than ever before. What's more, companies are blithely allowing broad access to this data via nifty Internet services and cool digital devices."

Meanwhile, the proper use of business and competitive intelligence by US companies is also on the increase. In a recent Outward Insights survey, more than seven out of 10 companies surveyed claimed to have an organized and systematic way to collect, analyze, and use competitive intelligence, a seven percent increase over results from a similar survey we conducted in 2005.

These two facts are completely unrelated to each other.

"Corporate espionage" will be with us in good times and bad. Any employee who feels she is "getting her due" by taking sensitive customer lists along after being laid off, or any sales rep who feels he is one-upping the competition by misrepresenting himself to a competitor at an industry trade show just to get information, are not emblematic of the thousands of companies that are practicing legal, ethical and effective competitive intelligence. These acts of lying and stealing are almost always one-off acts committed by ignorant people in the belief that they are securing valuable competitive knowledge, or exacting revenge on an employer who did them wrong.

And in most cases, the individuals committing these acts wind up unemployed, unemployable, or prosecuted. An individual cited in the USA Today piece who had infiltrated a competitor's email accounts was arrested. He subsequently pleaded guilty to felony wiretapping for tampering with the competitor's e-mail. He was sentenced last month to three months probation and ordered to undergo counseling. "There was nothing sophisticated about me getting into their e-mail," he said in an interview. "Honestly, I had no idea that it was illegal."

Individuals committing such foolish acts rarely are working within, or on behalf of, corporate competitive intelligence programs. Indeed, anecdotal evidence suggests that companies managing formal competitive intelligence programs are less likely to behave unethically, as these companies make clear what intelligence activities are acceptable and which ones are not.

The competitive intelligence industry has made great strides over the years disassociating itself from the sleaze of trade secret theft. But, occasional reminders are necessary that there is a stark difference between corporate espionage and competitive intelligence. The latter is an accepted and necessary business function; the former is just utter stupidity.

The Next Internet Revolution Isn't What You Think

Ask any automobile dealer, insurance broker, or retail store manager what has been the single greatest threat to their margins and the answer will most assuredly come back: the Internet. The greater transparency of information and competition engendered by the Internet has transformed some industries for the better (who actually still goes to their local bank branch?), while leaving others in tatters (when was the last time you booked a vacation through a travel agent?).

But just as the dawning of the 21st century saw the Internet dramatically lower, and in some cases dismantle, traditional barriers to entry in a variety of industries, as this decade comes to a close, a new generation of web-technologies threaten to shake-up and squeeze yet another industry: enterprise software.

By now, everyone has heard of ‘cloud’ computing, a concept based upon the conceit that our work need not be tethered to an individual computer or operating system when a universally accepted web-standard allows otherwise. And while many would argue that the Cloud is the future of computing (Google has even recently announced a browser-based operating system called ‘Chrome’ that presumably will support accessing applications in the Cloud), Cloud computing‘s ascension as a feasible alternative will likely be delayed until cheap, high-speed, internet access is as ubiquitous as running water and electricity. Until that time, broad proliferation of Cloud computing will remain a dream.

So if Cloud computing isn’t the software revolution of which we speak, what is? Simply put, it is the advent of sophisticated, free or nearly free web-based tools that can emulate, and often exceed, the features provided by large, often bloated, certainly expensive, software platforms. The maturation of the internet has resulted in free and cheap tools so powerful that many individuals and organizations are foregoing spending tens or hundreds of thousands of dollars per year on platforms designed to achieve largely the same results as free or inexpensive, Internet-based applications. Surprised? You shouldn’t be; if there is one thing history has taught us about the internet, it’s that it dramatically drives down consumers’ costs.

The availability of free or low-cost web-based software tools are now widely available for competitive intelligence applications. When organizations evaluate traditional competitive intelligence software packages (which can run into the hundreds of thousands of dollars), they typically have many overlapping needs including: article summarization, automated competitor website tracking, government regulation tracking, team-based or work-group portals for sharing intelligence analysis and notes, CI workflow, and keyword search trend analysis.

While most CI software vendors can address most, if not all of these needs, few vendors are able to deliver every capability well. In software development, just as anything else, trade-offs are necessary and resources are often allocated towards those features that are most marketable, not necessarily those that are most useful.

That said, with a little research, CI professionals can likely piece together a suite of stand-alone, browser-based, platform-agnostic products that can often be easily integrated into existing workflows that address most, if not all, of their software needs. Indeed, we’ve found that nearly every capability that is offered by the large CI software vendors (including those functionalities listed above) can be easily and cheaply replicated (and in some cases even surpassed) by free or low-cost software offered online.

Granted, this method won’t be suitable for every organization, and it does come with its own drawbacks (such as lack of integration), but for the right CI group on a budget, free and nearly-free online applications can often replicate the features of larger, pricier options, providing an adequate substitute at a fraction of the cost.

Which is the Better Strategy?

According to the New York Times, sales of GPS Navigation Systems -- devices that mount to an automobile dashboard or windshield that tap the Global Positioning System of satellites to determine directions and provide audio turn-by-turn directions and other features -- are on the decline as more smartphones are equipped with GPS capabilities (“Sending GPS Devices the Way of the Tape Deck?” July 7, 2009). Apple’s iPhone, for instance, comes with a map application that uses the phone’s GPS capabilities to do largely the same thing as larger, and often pricier, navigation systems.

Indeed, more than 40 percent of all smartphone owners use their devices to get turn-by-turn directions, according to Compete, a web analytics firm. For iPhone users, the figure is higher at more than 80 percent. Shipments of smartphones in North America are expected to grow by 25 percent this year, with more than 80 percent of them equipped with GPS, according to ABI Research.

Not surprisingly, sales of traditional GPS units from companies like TomTom, Garmin, and Magellan have fallen sharply. TomTom reports that it shipped 29 percent fewer GPS units in the first quarter compared with the same period in 2008. Garmin said that unit sales fell 13 percent in the first quarter compared with the previous year.

Garmin and TomTom, the two leaders in GPS navigation systems, have adopted radically different strategies to deal with this competitive threat. TomTom has announced plans to offer a portable navigation application for the iPhone that would include turn-by-turn directions and audio prompts. Unlike existing GPS apps for the iPhone, TomTom intends to charge a one-time flat fee rather than require users to pay a monthly subscription fee, according to the Times. Doing so makes TomTom available across different platforms, extending the product’s reach.

Garmin, meanwhile, has plans to develop and launch its own combination navigational device and cellphone, called the Nuviphone, later this year. It essentially intends to turn its navigation system into a mobile phone, with sophisticated navigation features that should far outpace current smartphone map applications. In doing so, it will leverage its expertise at developing, selling, and maintaining devices.

Which is the better strategy? On what assumptions do you believe each company’s strategies are based? What obstacles might each encounter as it attempts to respond to the decline in its core business? We’d love to hear your thoughts.