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IsraelStudyonCIinCIM May-June 06 ByBarnea

IsraelStudyonCIinCIM May-June 06 ByBarnea

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Published by Avner Barnea

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Published by: Avner Barnea on Jan 07, 2010
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44 SCIP
 
2006 www.scip.org Competitive Intelligence Magazine
Competitive intelligence in Israel is moving forward, but it is quite difficult to assess the dynamic scope of this venture, as firms usually are not willing to share this information. Research completed in December 2005 offers insight into the state of competitive intelligence (CI) in Israel. A sample of 2,000 leading Israeli exporters received a 19-question questionnaire through the internet. A total of 200 companies (10 percent) responded. The survey’s main objective was to assess the current state of competitive intelligence in Israel, particularly among firms that export goods. A large CI survey has not been done in Israel before. The few small previous surveys gave only a narrow picture. Table 1 lists the key topics covered in the survey.
MAIN FINDINGS
 Although the response rate of 10 percent was relatively good, the number of questionnaires returned was not satisfactory. We had expected a higher number of respondents, to give a better picture of the situation. Of the firms responding, 74 percent are exporting regular products, and the rest are exporting high-tech products.  Around 50 percent of the firms that export more than $50M worth a year have an active competitive intelligence function. Approximately 15 percent of smaller firms — those that export less than $30M worth — have competitive intelligence units. These companies depend more on an ad hoc approach and on basic web searching.  Among firms that export high-tech products, only 24 percent have competitive intelligence units, which  was contrary to our expectations. In the responding companies, competitive intelligence units are usually small: no more than two employees, one a CI director. These units usually do systematic competitive intelligence work closely with other units such as market research and information experts. From this survey it is not evident to what extent CI units are using business intelligence (data mining and other internal databases), as this topic was not defined adequately in the questionnaire.Competitive intelligence directors in 55 percent of the companies participate in senior management meetings on a regular basis, often providing both information and opinions on further plans. This relatively high rate indicates competitive intelligence’s growing role in the decision-making process.  Almost 46 percent of competitive intelligence directors report to the CEO of their firm, and 40 percent report to the company’s vice president of marketing. These findings confirm prior assumptions that CI directors  work closely with decision-makers.Export firms with a competitive intelligence function give high priority to open source intelligence from the internet. Findings on the use of people as a source of intelligence are disappointing. Analyzing the results of the questionnaire shows that only 30 percent of the firms have developed special programs for obtaining intelligence directly from individuals,  while the rest deem it unnecessary. The recognition of the potential contribution of this tool is low.In general, the respondents said the impact of competitive intelligence on decision-making is high. On a scale of 1 to 7, the results are as follows: Contribution to understanding competitors 5.8Contribution to decision-making process 5.3Contribution to profound technology knowledge 4.7The proportion of Israeli firms that use dedicated advanced software tools for competitive intelligence is low — only around 20 percent. Two-thirds (66 percent) of the firms would like to obtain additional information on using software tools to support competitive intelligence. This finding indicates a high interest in CI software.Two-thirds (68 percent) of competitive intelligence units are not satisfied with the quality and quantity of the information they gather and are looking to improve it. This may be a result of the feedback they receive from their internal customers. 
CI SUPPORTS SUCCESS
The growth of the Israeli economy depends very much on the success of its export firms (in 2004 Israeli exports of goods reached US $50 billion). Israel has built several state-supported systems to promote foreign investment, particularly in firms with high export potential, as they are considered to be the leading growth engine of the country’s economy. Israeli companies, especially the large corporations, conduct their competitive intelligence efforts independently. But many expect the government to become more instrumental in this field by supplying information on global markets through state commercial
CI in Israel
I
SRAEL 
 S
TUDY 
 
ON
 C
OMPETITIVE
 I
NTELLIGENCE
 AVNER BARNEA,
 A.B.Projects 
 
Volume 9 Number 2 March-April 2006 SCIP
 
2006 www.scip.org 45
organizations. This support is more relevant to small and medium-sized firms that do not have the resources to develop their own CI capabilities. Competitive intelligence use by Israeli exporters is slowly expanding. More Israeli firms are becoming aware of the contribution CI can make to improving business performance, but this awareness does not automatically lead to creating their own CI systems. The absence of previous studies prohibits comparisons to measure trends in implementation of competitive intelligence. Competitive intelligence use in Israeli firms is considered to be high, particularly in comparison with a recent survey of CI performance in Canadian firms (www.ottawabusinessjournal.com, November 24, 2005). The final comment in that survey was that “there is a compelling need for better intelligence, a greater organizational focus and larger budgets.” 
CLOSE MANAGEMENT LINKS
 A significant number of Israeli managing directors are working closely  with their competitive intelligence directors. This indicates that they are directly influencing the process of prioritizing their key intelligence topics,  which direct the effort. From this reporting proximity, we can conclude that competitive intelligence has an impact on strategic decisions, although the extent cannot be verified. The results of this survey may help persuade senior managers who do not yet have competitive intelligence systems of the advantages that firms  with CI units enjoy. There are not sufficient data regarding the connection between business performance and the existence of competitive intelligence activity, as this question was not asked specifically. If senior managers become aware of the potential contributions of competitive intelligence, they may improve the internal cooperation between CI units and their firms’ executives. High-tech exporters need to give higher priority to developing the proven contribution of competitive intelligence. According to a recent survey regarding the CI situation in the United States (see “US CI survey” in  www.outwardinsights.com, February 2005), CI use in U.S. high-tech firms is much higher than in Israel; in fact, U.S. high-tech firms are the industry group that makes the most use of CI. The change in competitive intelligence implementation in Israeli firms will not happen without strong support by senior managers inside the firms. However, these individuals can be encouraged by outside consultants who  will match their accumulated experience  with the particular needs of each firm.
SOFTWARE ADAPTATION
The use of targeted competitive intelligence software by Israeli corporations is not satisfactory, particularly when there are excellent examples of Israeli CI solutions. Firms are aware of these tools, but for reasons that are not clarified in this survey, the rate of purchasing and integrating them is still low. It was surprising to find that technology adaptation is lower in Israel than in Asia, where 64 percent of companies use CI technology tools (see the recent CI study at www.globalintelligence.com). Using advanced CI software can provide a vital added value, especially to small CI units. The requirement for better access to open source information (indicated by almost 70 percent of the respondents) can be partially met by using advanced software tools. The improved results through the use of software may convince more executives of CI’s benefits.
PEOPLE INFORMATION
Many firms have not yet fully leveraged information known by people. They need to inform their employees of the high value of information that exists internally but is often not used properly. This prominent competitive intelligence resource requires cultivation and training in how to use internal and external human networks to benefit the firm.The small size of CI units may lead to the conclusion that these firms are not sure of its benefits, and even larger corporations are hesitant to increase its use and to grow their own competitive intelligence activity.
Organizational structure:
The existence of the competitive intelligence function and the approximate size of the CI unit in each firm.The place of competitive intelligence in the firm’s organizational structure.
The essential need to improve the collection of information:
The advantage of using open source intelligence. The use of human intelligence in the collection process.The immediate necessity of export firms for government support in information gathering on global markets.
Performance and contribution:
The overall contribution of competitive intelligence to the business performance of local firms. The need of internal advanced tools such as dedicated software for gathering, analysis, and dissemination.
TABLE 1: KEY SURVEY TOPICS
CI in Israel

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