Competitive intelligence - key to corporate risk management

July 2003 Security Services & Risk Management

Risk has always been part of the operational environment of organisations. It is something that neither the SMME owner, nor the large multinational can escape.

As we all know, events are interconnected, and thus the operational environment is in constant flux. International, national, regional and even events at the suburb level have a direct influence on how organisations will perform. Uncertainty about the future and risk goes hand-in-hand, and the only way to minimise this risk is to try to understand and predict possible futures.

The King II Report clearly states that the management of organisations is responsible for the organisation and its well-being and that they must be held accountable for their actions. The management of risk in different environments is mentioned of one of the areas in which management must be held accountable. Unfortunately many organisations have equated risk only with physical security and not with other aspects within their operational environment. This has left many organisations blindsided by sudden changes. This can be seen on many different levels from the local liquor store owner who now faces the prospect of increased competition through new legislation to big mining houses that banked on a weak rand and prolonged war in Iraq.

These changes have significantly increased the risk factor for these organisations, though they have nothing to do with gates and guards.

Enter competitive intelligence

A solution to this 'intangible risk factors' is the implementation of a competitive intelligence (CI) process within an organisation. CI is a process in which information about the operational environment is gathered in a legal and ethical manner, that can be analysed and used for decision making purposes. This can be done irrespective of the size of the organisation. From SMMEs to multinationals already enjoy the advantages that CI holds. It is easy to recognise them too. Just look in your neighbourhood; why does one café last for years and others change owners like clock work? It simply means that one owner understands his business better than the other and that he can act upon the demands of his customers. This owner would be quick to tell you where his competitive advantage lies.

The greatest risk that any organisation faces is the prospect of extinction. This may sound like something that we only refer to when we talk about dinosaurs, but it happens... For example, whole companies were destroyed during the 9/11 attacks, floods can wreck whole towns and in the case of SMMEs a fatal car accident can 'take out' the sole proprietor of a company.

What does CI do?

As stated previously, CI is a business process and if managed correctly can yield tremendous results not only in terms of gaining a competitive advantage in the market place, but can also serve as tool to minimise operational risk.

A good CI programme should include a regular assessment of the macro environment. For example, in the case of 9/11 an environmental scan should have shown that there have been previous attacks on the World Trade Centre (WTC), terrorist groups have stated before that the WTC is a target of Western culture, hijackings have taken place before and the US government has warned before that high density areas would be targets for terror attacks. Keeping all these pointers in mind, any company having offices in the WTC should have considered the associated risk of this location.

International and national trends all have an impact on the day-to-day operations of companies and most significantly on the bottom line. Mining houses and exporters in South Africa are currently complaining about the strengthening of the rand and in reading their comments it is almost as if they never considered that the rand might actually recover again. Keeping a close eye on the markets should have at an early stage pointed to the fact that the rand is indeed on a recovery curve and that it did not 'just strengthen' in a matter of minutes.

A CI programme can also provide early warning about new products, competitors or legislation and thus minimise the risk of being 'caught out' by developments. Only those who do not plan for tomorrow fear the future.

CI and corporate governance

Some will argue that gathering intelligence on the operational environment does not concur with good governance practices. Recent headlines told of espionage, blackmail, bribery and theft in the corporate sector. All these activities are related to unethical and illegal activities, which should never be part of a CI programme. So much information is available in the public domain and through legal and ethical avenues that it is almost shocking to see that companies are still willing to revert to these types of activities. A good CI programme will provide effective risk assessment information without compromising good governance.

In South Africa the South African Association of Competitive Intelligence Professionals (SAACIP) promote the legal and ethical collection of information and its members adhere to a strict code of ethics and professional conduct. SAACIP members concur that CI units can in many instances claim a moral high ground within their companies through their day-to-day conduct that can serve as an example to others.

Companies being caught (and they all do at some point!) 'spying' through illegal and unethical methods also run the risk of being exposed and thus bring their company into disrepute in the public domain.

Conclusion

It is only possible to manage risk if a proper investigation into the operational environment is done. Companies with a good competitive intelligence programme in place, that includes a counterintelligence function, have the edge over competitors in that they can plan for changes in the operational environment. Risk does not only comprise physical threats to the organisation, but it is also about uncertainty in the market and competitive intelligence can provide a framework to limit this uncertainty.

Increasing the competitiveness of an organisation through a process of planning, collection and analysis is a relatively inexpensive way to minimise the risk of being surprised by changes in the operational environment.

About the author: Bernard Odendaal is a project manager with CBIA, Africa's oldest registered competitive intelligence consultancy and an Executive Committee member of the South African Association of Competitive Intelligence Professionals (SAACIP). He is also currently enrolled for his Master of Security Studies at the University of Pretoria where his dissertation deals specifically with CI in the South African environment. You can contact him at e-mail bernard@cbia.co.za





Share this article:
Share via emailShare via LinkedInPrint this page



Further reading:

AI augmentation in security software and the resistance to IT
Security Services & Risk Management Information Security
The integration of AI technology into security software has been met with resistance. In this, the first in a series of two articles, Paul Meyer explores the challenges and obstacles that must be overcome to empower AI-enabled, human-centric decision-making.

Read more...
Understanding the power of digital identity
Access Control & Identity Management Security Services & Risk Management Financial (Industry)
The way we perceive business flourishing is undergoing a paradigm shift, as digital identity and consumer consent redefine the dynamics of transactions, says Shanaaz Trethewey.

Read more...
What you can expect from digital identity in 2024
Access Control & Identity Management Security Services & Risk Management
As biometric identity becomes a central tenet in secure access to finance, government, telecommunications, healthcare services and more, 2024 is expected to be a year where biometrics evolve and important regulatory conversations occur.

Read more...
More than just a criminal record check
iFacts Security Services & Risk Management
When it comes to human-related risks, organisations and their most senior leaders focus on a narrow set of workforce risks, the potential risks that human workers pose to the business.

Read more...
Tech developments lead hologram growth in 2024
News & Events Security Services & Risk Management
Micro-lenses, micro-mirrors and plasmonics are among the rapidly-emerging optical devices that have evolved on the back of holographic and diffractive technologies, and are seen as part of the natural evolution of optical science by R&D teams.

Read more...
Are you leaving money on the table?
Editor's Choice Security Services & Risk Management
How many customers have you helped since starting your business? Where does most of your new business come from? If the answer is not from your database’s existing customers, you might have a problem.

Read more...
The business value of ChatGPT
Security Services & Risk Management Risk Management & Resilience
Transparency, policy and integrity. It is critical for organisations to have a line of sight into processes and procedures that clearly define employee use cases when it comes to ChatGPT, says Lizaan Lewis, Head of the Legal Department at Altron Systems Integration.

Read more...
BMS for smaller businesses
Security Services & Risk Management Products & Solutions Risk Management & Resilience
Small businesses can also benefit from tailored energy management solutions just like large corporations. Effective energy management is essential for more sustainable and efficient operations.

Read more...
Kidnapping for ransom
News & Events Security Services & Risk Management Risk Management & Resilience
There has been an 8,6% increase in reported kidnapping cases in South Africa compared to last year, with 3 854 cases reported between April and June this year, leaving ordinary South Africans increasingly vulnerable.

Read more...
The difference between a SOP and a SOP
Residential Estate (Industry) Integrated Solutions Security Services & Risk Management Risk Management & Resilience
SOPs are a touchy issue that need careful attention and automation to ensure they deliver the desired security results. Beyond design and automation, implementation is the ultimate road to success.

Read more...