Deloitte & Touche USA talk about Competition at the Crossroads

I was searching for a few podcasts last weekend, to increase my knowledge of the medium and try to work out what’s a good podcast and what’s a bad one.  I stumbled upon Deloitte & Touche’s podcast directory and was very pleasantly surprised by not only the quality of the podcasts, but also the depth and variety available from their various practices in the US, London and Australia.

The podcast I’m referring to in this post, Competition at the Crossroads, highlighted the research of John Ciacchella, principal and Deloitte Consulting LLP’s technology industry leader. The snap-shot for this research being, that while many business leaders believe their market is getting more competitive, the sources of this competition is changing dramatically.

John’s podcast covers a couple of interesting points that are relevant for CI practitioners, particularly those working within the Technology industry.

  1. Disruptive change is increasing. Technology by nature is disruptive, but with change comes pressure to explore new business models and markets to drive growth.
  2. Too much reliance on “If it aint broke, don’t fix it” mentality. I’m paraphrasing here. Companies that have a strong first mover competitive advantage often rest on their laurels and rely too heavily on that as a competitive differentiator. John mentions the need for sensor networks to help create predictive intelligence that can identify threats and opportunities in a changing market.
  3. Rise of consumerisation of business IT: As users grow used to social networks and highly flexible communication tools, tomorrows business users will expect much more out of traditional business applications and software.

The last five minutes or so of the podcast are particularly valuable to positioning CI’s future value within an organisation. The rise of more interconnected ecosystems, be they partner or customer, drives a need for more granular insights into how to create compelling competitive strategy. John believes this can be solved through an increase in primary research and gives the example of old style Tech vendors being able to poll their largest 2-3 customers and would have a pretty good idea of what the market needs. A rise in consumerization of IT (think iPhones, Social Networks, Google Maps) means you have to poll a much larger group of customers to pick the next trend correctly.

Definitely food for thought and a nice reminder for me on the value of primary research as a competitive differentiator.

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CI Planning II – The who and why

 Following on from your internal assessment of your company or team’s CI capabilities and getting feedback on the competitors that need to be focused on, the second stage of planning takes a more external view of your CI program.

This stage of planning focuses more on what competitors matter and what resources you have available to you and your team.  From a practical point of view, your CI efforts are going to fall under one or a couple of very broad generalizations:

  1. You gather CI on a competitor and are responsible for creating and leading business plans (sales campaigns, pricing models, M&A activity and other business strategy) that directly impact competitors.
  2. You gather CI on a competitor and are a trusted advisor to those people making business planning decisions as listed above.
  3. You gather CI on a service or bureau basis to be consumed by interested parties to be then actioned on as they see fit.

Once you have a good handle on what your CI materials are being used for, you can take a very focused view on what competitors to focus on and what information is needed.

In my own role, strategic planning by competitors is secondary to their execution strategy within a sales environment. For that reason, the intelligence I gather is filtered through the lens of how our competitor is likely to sell to a customer. Pricing, messaging, partnering, industry models, etc form the pillars of how to compete – not 2-3 year strategic direction.

Tactical vs. Strategic. Patent filings are not much help in a sales environment, but do matter for a pharmaceutical company where lead times are long. Conversely, understanding discounting strategy matters greatly. Your company’s focus will be somewhere between these two extremes.

Getting to the heart of the external part of CI planning are three key areas of discovery.

External:

  1. Competitor audit.
  2. Resource identification and assessment.
  3. Resource engagement.

 

Competitor Audit:

Competitors are at the heart of our day-to-day jobs. From the internal benchmarking work you did in the “Internal” phase of planning you should have a very good idea of what competitors are causing the most trouble (or have the potential to). In most cases this benchmarking served to reinforce what you already knew regarding the most pressing competitive pressures. 

The competitor audit serves to look at those competitors you have identified and stack rank them in terms of importance or ability to cause pain to your organisation.  If you are #2 in the market, is your competitive pressure coming from you pushing for #1, or from #4, 5 and 6 banging on the back door?

I like to look at the Audit in the following ways, take SAP as an example:

  • Competitors whose business your company wants (Netweaver vs. Websphere or Oracle FMW).
  • Competitors who want your business (Salesforce vs. SAP CRM).
  • Competitors that you want to keep track of as they talk to your customers (SAP vs. Google).
  • Companies that could be potential competitors (usually partners – SAP vs. Infosys or TCS).

From these four broad categories you can identify what competitors should be focused on and what resources may need to get across these businesses. Note the audit is NOT about getting all the information on a competitor, but to understand the dynamic your company competes with those chosen competitors.

Now you have your most important competitors categorised by the type of interaction they have with your business, it’s a pretty straight forward task to break these into an Interaction Map.

 

Taking the example of if I was planning CI for Microsoft’s Exchange business. There is clearly a variety of competitors I should be looking at.

  • Gorillas: Those companies that have similar large market share in a saturated marketplace. These are the companies that are going after Microsoft’s current business (enterprise mail) in a similar manner (Packaged software). Strong competition in every deal.
  • Sharks: Those companies that have a high level of interaction, but Microsoft has low presence. Gmail and Yahoo mail are an example of this. While Microsoft has Hotmail, this had not yet been successfully tied to the Exchange family to offer mobile email solutions.
  • Snakes: Those companies that have little market presence in the traditional email/messaging market. However, changes in customer usage and buying patterns may lift these competitors into a more favourable state. Java messaging solutions for example. Mobile communications may become more common than the PC over time and for that reason be the hub of messaging in the future.  No immediate competitive treat, but usually massive long term threat.
  • Mosquitoes: Those companies that make up the “rats and mice” for any particular space.  Competition is weak and choices are made for reasons outside of those traditionally used to assess solutions. This may include laggards and very loyal legacy system users.

 

Resource Identification & Assessment:

With the Interaction map completed there is a clear segmentation of the competitors you need to focus on.  For the most part, you’ll want to focus on Gorillas and Sharks. Gorillas for the incumbent business and the Sharks for new market opportunity.

The information you need for Gorillas differ from that you’ll need for Sharks.  Gorillas need more detailed information on tactical events. New product upgrades, installed base information, key partners, selling tactics and customers that can be targeted etc. In the technology space, these are the competitors you may need to have detailed technical documentation on. Feature and functionality. Speeds and feeds.

Sharks, on the other hand need more information on the market as a whole. How are customers buying, what are the market growth rates, what new opportunities are being created and what threats do they pose. You will see very little head-to-head competition, so early warning systems may need to be put in place to gauge where customers see their technology purchases are going in the next 12 months.

With those resources broken down, you now need to look at what sources you have available for those.  These may include:

  • Analyst information (Gartner, IDC, Forrester, as well as financial analysts).
  • Primary research.
  • Sales force feedback
  • Secondary sources (Such as RSS, PR, Websites, etc)

Next step is to assess the usefulness, reliability and cost (time and budget) of the data sources you’ve collected. The age old triangle rule is in effect here as it is in software development. Good, Cheap and Fast. Pick any two and you have to bear the brunt of the third.

  • If the data is good and can be gathered quickly – it’s not normally cheap. (Eg: Analyst reports).
  • If the data is cheap and good it usually takes some time to collect. (Eg primary interviews with your salesforce).
  • If the data is cheap and fast – it normally isn’t good or needs to be scrubbed to remove marketing or PR spin or triangulated to get reliable data. (Eg RSS, Blogs, News sites and PR).

 

Resource Engagement:

I include this point as a reminder that with various information sources you’ll need to have some idea of how regularly this information will be available. Building out CI deliverables around scheduled events that you know of (Financial results, analyst market share data) helps you to block out time needed in advance and show you the pockets of time you have to look at more time intensive forms of information gathering and analyzing.

Engaging your primary sources of data, particularly partners and sales representatives is very useful, if not critical, but timing and engagement is vital. You do run the risk of engaging at the wrong time (end of quarter) and losing any momentum you may have had. I plan to cover timing in following blog posts, but for the meantime, ensure you have thought about the first 90 days of your new financial period and when the best time to engage your stakeholders and primary sources of information is.

CI Planning I – Set yourself up for success

 With a new financial year coming up for most of us, now seems to be the perfect time to talk about CI planning. This post is the first of three where I’d like to outline some simple planning tools that can be used to make your CI team stronger and more focused.

Firstly one of the key questions you have to ask yourself is what your goals are for the following year. Here I’m not posing a “philosophical” question about mission statements or the like, but rather, focus on tangible things you need from your stakeholders or tangible benefits you’ve shown the business.

A solid CI plan covers the good and the bad and gives you the platform to:

  • Identify the areas where you (or your team) have shown measurable business benefits to the business or your stakeholders.
  • Illustrate your team’s workload and create the assets you’ll need to ask for more budget or more headcount.
  • Identify the areas where you need assistance, access or input from other stakeholders or business units within your organization. This last point is especially true for lone wolf CI practitioners. Remember, you can’t do it all by yourself! 

CI planning is often different depending on where (or whom) your function reports to. Reporting into marketing differs from reporting into sales, and so on. There are a few common steps that I’ve found useful over the years, which I like to treat as internal, external and the final plan you communicate to peers, users and management.

I’m going to look at the internal factors first. As you’ll see groups of threes is a recurring theme for me!

Internal:

  1. An audit of what you and your team (if any) managed to do that year.
  2. Gap analysis of what you set out to do and any major reasons for deviations from those goals. 
  3. CI benchmarking with internal stakeholders and your “audience” to understand their needs.

 

The Audit:

If you only do this step, you’ll be way ahead of the curve and will have more ammunition to discuss the support and funding you and your team will receive in the coming year.

I like to treat the audit as looking in the mirror very objectively. Firstly if you haven’t been measuring your contribution to the business and you’re close to the end of the year – anecdotes and testimonials will work, but will not be as effective.  If you’re looking to start measuring this year/quarter or month, here are some of the ways you can set up tangible measures for your CI function.

Stuff you do:

  • Number of enquiries you do in a week/month/quarter/year.
  • Number of training sessions held.
  • Number of “deliverables” such as newsletters, webconferences, etc held.

Stuff you contribute to:

  • Due diligence on major product launches, mergers and acquisitions, business planning processes.
  • Trusted advisor to individuals or groups.

Stuff that creates direct revenue:

  • Contributions to RFP’s.
  • Individual sales rep or partner coaching.
  • Presentations to customers.

I love the idea of tying the CI function to sales. It helps where the help is needed the most. It can be directly tied to a revenue figure and lastly, it creates the ties with sales that help create channels of information sharing that make your competitor knowledge richer.

Once you have that audit done you will have a very clear idea of your key wins and contribution to the business. This information is hard to refute and certainly helps to break CI out of the “privileged” environment as those crazy, shadowy guys in CI.

 

The Gap Analysis:

The gap analysis is an optional step, but one you can use to provide a sword or a shield for you and your team. A gap analysis will show you one of two things:

  1. That you are on top of your game and covering workload effectively and being used by your stakeholders effectively.
  2. Where the “time wasting” requests are coming from and where there is a shift in corporate direction or competitor importance.

Early in my career the most glaring gaps that would occur would be around what was promised and what was delivered. In my case, written CI documents were seen by management as the key deliverable for my one-man-band. What quickly became apparent was the need for additional training and one-on-one sales rep coaching. This high touch, unscalable model was embraced by CI consumers, but placed additional burden on the program. Regardless, measuring over the course of that financial year helped me to be able to show value to the business and illustrate how employees wanted to consume CI data. Which brings us to the last point in this internal plan.

 

Internal Benchmarking:

Benchmarking helps you understand the “where to next” part of your CI plan. This usually comes in the form of a feedback form or some type of internal survey you provide to key stakeholders and users of your CI deliverables. Some of the questions you may want to find out during this stage include:

  • In what format do you like to consume CI material? (website, email, webconference, face-to-face, blog, etc)
  • The frequency of communication. Once a month, week, as news happens.
  • The competitors that your stakeholders feel need to be tracked.
  • The type of information needed (tactical sales techniques, strategic forward planning, etc).
  • A measure of customer/user satisfaction with CI material and access.
  • Ways to improve the service.

With the benchmark in place, your plan can provide a richness of detail that will assist you over the course of the year to aim your assets in the direction that is going to create the maximum benefit. This process is also a fantastic opportunity to reach out to members or your company who don’t use CI and create potential business in the long run.