by Arik Johnson
The essay that follows was written by our Managing Director, Arik Johnson, as a white-paper for presentation at the International Knowledge Management Executive Summit, June 1998 in San Diego California.
One of the most compelling reasons to use Knowledge Management (KM) is that of Competitive Intelligence (CI). This discussion illustrates findings from a leading CI firm with regard to how CI is best implemented within a KM framework. Examined are how KM can become an operational component of intranet deployment, and how KM and intranets can be fully integrated at the strategic and tactical levels. Also examined are issues of counter intelligence and knowledge security. A particular focus is on large firms with broad knowledge base assets.
"Knowing and not doing are equal to not knowing at all."
- Fortune Cookie
Competitive Intelligence (CI) has become a major force in driving decision-making in firms of all sizes at many levels. At the same time, Knowledge Management (KM) and the effective use of knowledge assets has become an industry unto itself, redefining how organizations use their IT infrastructure in conjunction with their people resources to compete more effectively. As early as 1996, management consultants Arthur D. Little found that 42 percent of Fortune 1000 companies had already or were planning to add the functional role of CKO (chief knowledge officer) to the organizational chart. The convergence of these two exciting disciplines has galvanized strategic planners to define more completely the relationships between CI and KM and its specific role of delivering decision-support via, what else, the Corporate Intranet.
Experience has taught us that business, like life, is just a series of decisions. The ability to predict the future consequences of business decisions is at the core of ongoing profitability and the futures of the stakeholders in every firm.
We're going to look at the issues surrounding CI, KM and development of a module of the Corporate Intranet as its platform of delivery. But first, it's useful to define some of the concepts of CI and KM, then demonstrate how intranets are being used to merge the two disciplines for decision support and competitive advantage.
It has been said that most "surprises in business are negative" -- CI attempts to control the marketplace consequences of enterprise decision-making (and limit surprises) to successfully transfer marketshare to the firm in three different contexts:
Knowledge Management is much more than just the ideal framework for CI, KM is the key success factor in the execution of faster, better corporate decisions. Witness Microsoft's ability to turn on a dime and drive ahead to win in almost any marketplace: the popular examples of the development of its GUI interface when threatened by Apple; or management recognition of the importance of the Internet to the computer business. It's a rare event when any group is able to shift its entire corporate strategy 180 degrees in a period of less than 90 days, let alone a Fortune 500 company. Therein lies Microsoft's competitive advantage -- faster, better decision-making.
Faster, better decisions are based on faster assimilation of more valuable information and there are certain key success factors which can be applied as cornerstones of KM. White and Murray have identified seven elements of best practices in KM:
Knowledge Management theorists usually consider two types of organizational knowledge:
The organized collection of Competitive Intelligence is, similarly, divided into two types: primary intelligence (gotten from human sources -- a la competitor firms, from their customers, vendors, bankers, lawyers, et cetera) and secondary intelligence (culled from online databases stocked by reports from those collecting primary intel).
Naturally, KM and CI professionals are now considering such similarities in knowledge types and the medium for delivery of these decision-support mechanisms. Even though KM is perhaps the fuzziest term in business today, and seriously in danger of becoming the next corporate fad, we can begin to equate a few core technologies and, more importantly, business processes behind KM success. The fact is, that poorly-developed business processes are often at the heart of poorly executed KM and CI applications. If we try to combine KM's decision process automation with a bad process what we get is an automated bad process. Bad processes must be refined prior to their deployment in a KM or CI setting.
For example, one of the main disappointments of groupware has been that it never really makes business processes visible to users. Let's put Lotus Notes on the spot: believe it or not, sometimes IT/IS departments implement "solutions" in the form of applications that are too complex -- in that, the application often requires the organization to rebuild the way it functions. Whenever we rebuild an entire living corporation around a single platform for interactive and archival information processing it will provide a less-than-complete solution. So, it loses relevance to the users putting it in place. Groupware often degrades into nothing more than glorified email and a BBS. Organizations have always required real-time content that doesn't alter the way the business operates -- rather, it would fit into the existing process framework seamlessly.
Herein lies the power of the Web -- and, its corporate sibling, the intranet. Intranets provide a comparatively quick way of building a data warehouse that reflects one's existing business processes. You don't have to come up with a whole new way of doing business with an intranet -- though you may need to modify some processes that were already poorly structured before the intranet was ever thought up.
The intranet is populated by "live" data -- so it's always relevant. The original goals of the intranet was to replace inflexible, proprietary groupware and networking applications with "open" systems (based, indeed, on the Internet's Web and Email) and decompartmentalize corporate data -- from different departments to whole different continents -- to be shared on an enterprise scale. KM is merely the realization of much of the intranet's original goals.
That said, what makes a good intranet? Well, there's all the usual advice -- we've outlined a lot of it above, to which we can add elements like simplicity, ease-of-use, dynamic content, unified technologies, consideration of diverse users, involvement of the whole enterprise, the encouragement of knowledge transfer in content development, and full-time staff support. But what, really, makes a good intranet -- especially in our context here: to support decision-making based upon organizational knowledge for competitive advantage? To answer that question for our purposes, we must look at the KM components themselves in the CI context. We'll do it with a song...
When the Moon is in the Seventh House
Explicit knowledge is represented by the stored historical information of the company, matched by external sources of information brought in perhaps via an Internet connection, CD-ROM or other sources. We can list some explicit applications: elements like specialized databases from third-party vendors (Dialog, Lexus/Nexus), press release and newsfeed collection (WavePhore's Newscast Access or NewsEdge's NewsObjects), databased intelligence reports from engineering tear-downs of competitor products and services and industry "gossip", databased product literature, competitor Web sites, archived design specifications, company profiles and financial statements, and a wealth of other sources databased, searchable, and categorized.
One shortcoming of stored and sorted competitive knowledge lies in the time-sensitivity of CI data on the intranet -- often, secondary, explicit intelligence about competitor behavior is useless by the time it is delivered to the intranet or when it might be accessed weeks later. However, we can visualize trends and markets in which competitors act, and identify latent and parallel competitors -- perhaps a firm's own customers and vendors or competitors in similar, non-direct markets. This intelligence can be incorporated into decision-making at all levels and trends emerge. Eventually experts can be identified. Still, explicit knowledge/intelligence can often be the source of our collective "information overload" we all suffer from today. It must be combined and filtered by human experience.
And Jupiter aligns with Mars
Tacit knowledge, the experience and intelligence in the heads of the front-line people themselves, is best presented in the context of an internal "network of experts" that can be built from explicit records, knowledge-base or expert-systems repositories, corporate culture, external consultants, and worker interactions with vendors, customers, and each other. Some of this data can even be squirreled out of user profiles and access logs that monitor employee activity. Often considered an invasion of privacy and always a source of considerable worker-ire, user histories are critical determinants in identifying your internal experts.
Add to this, that employees have historically drawn a sense of job security from what they "know" -- and the protection of that knowledge has been a closely-guarded worker-asset. Details about how users work, learn, create, and subscribe to content on different parts of the intranet can be a telling identifier for management when it comes time for considered worker input towards strategic decision-making, and corner-office insights are valuable in front-line tactical decisions. In many firms, worker fear and anxiety is only beginning to be overcome -- as people realize that their knowledge alone does not job-security make, and understand that the SHARING of their knowledge for competitive advantage makes them a more important "people-asset". So, one of the first tasks in any KM and CI effort requires the transformation of organizational culture and the creation of an environment where the internal sharing of knowledge is encouraged and rewarded.
Peace will guide the Planets
The deployment of a CI module on the intranet must be planned effectively within this framework. Naturally, CI intranet planning must include the rollout assignments, schedule and budget, as well as the selection process of platforms for applications on the intranet (SQL versus Access, ASP versus CGI, Notes/IE & PointCast versus Netscape & Netcaster, et cetera). Many of these platform app decisions may have already been made. The culture shift mentioned above must also be considered, as well as training needs of personnel using the intranet -- specifically for CI applications, contributing content editors must be identified and responsibilities assigned. The goals of the users of the intelligence products must be considered. Information overload must be addressed. It sometimes that seems there is no end to such planning variables.
Successful planning of the design and specific components of the KM/CI intranet will also add value to the process at hand. Although intranets are, by nature, dynamic and "living", always fluid and changing, initial design must include the training of contributing content editors and specifying of roles for these personnel. We can add to this the establishing of access privileges for more sensitive documents -- such as price lists and negotiating policies, which would normally be considered confidential.
And Love will steer the Stars
Finally, a system of evaluation metrics must be developed to quantify and qualify the success of the KM/CI intranet objectives. Return-on-investment is a common means of demonstrating the value of the intranet to management, even though management personnel themselves (often the best organizational source of CI) are and must be active participants in the intranet effort. This might be measured through the adoption-rates of the intranet, the success/failure of the original objectives, the user-awareness of the applications tied to these functions, and the relative time-to-live of the intelligence products residing there, as CI tends to be notoriously short-lived in its value.
The metrics developed to guage the success of the intranet can then be tied back to the upgrade process for future incarnations of applications and the new planning that will undoubtedly be incorporated.
This is the Dawning
And, there you have it. Competitive Intelligence has now become a module of your Knowledge Management effort and has been incorporated into the overall intranet applications matrix. Right..?
Time and space dictates that we tragically oversimplify the process here, as the applications in the CI module of the company intranet will be as diverse as the sources of information to be delivered.
Email and messaging will be a core collaboration tool, but may require substantial effort to migrate from older mail systems to LDAP and/or Y2K compliant apps.
Web forums and chat applications in the browser may only provide value if standards are created around which browser to use -- witness ActiveX and Java differences between Navigator and IE.
Search engines and databases must scale properly to the size of data sets being queried -- one wouldn't select an Access database for a database with 100,000 records, where an Oracle or SQL DB would be a more appropriate solution.
"Push" clients when deployed must be centrally upgradeable to avoid a help-desk nightmare when a proprietary client becomes obsolete.
And Web-based-training applications must be bandwidth-friendly enough not to clog network throughput with multimedia files that result in net decreases in productivity. These logistical challenges must be considered in order to ensure proper maintenance of the effort.
Then come the Counter CI concerns about too much revealing information on the company Web site, authentication procedures and corporate information procedures when employees can't remember their passwords long enough to go without a yellow sticky note pasted to their monitor. There are encryption technologies for extranet and VPN transfers, and network audit & intrusion-detection. One FBI unit, ANSIR, estimates U.S. corporate information compromises cost more than $100 billion annually, while the American Society of Information Security figures it closer to $300 billion worth of sensitive knowledge is stolen or misappropriated each year. And think about your Internet connections? Are you among the 54% of U.S. firms whose computer systems were used inappropriately via your inbound Internet link? Even though we have measures by the federal government (such as the Economic Espionage Act of 1996) and private groups (SCIP's Code of Ethics) designed to discourage such behavior, industrial espionage continues to be a challenge in most of America's biggest companies -- with employees themselves being the largest single profile group of offenders.
Our goal of an "Age of Aquarius" has yet to dawn, even though you may have met all of your original objectives for a CI intranet module. In this, Knowledge Management itself defines the CKO's role as visionary. Existing CI efforts merely add another use that needs to be ported to this new platform. Once we've considered the implications and operational logistics, tested it out "live", and then revised our system to customize itself for our particular environment and culture, I'm sure we'll all breathe a bit easier about our roles in KM, CI, and the use of the corporate intranet as a delivery and collection mechanism.
Arik R. Johnson is Managing Director of the Competitive Intelligence (CI) outsourcing & support bureau Aurora WDC. Learn more about Arik at his firm's Web site www.AuroraWDC.com/arik.htm.