Demystifying Business Intelligence

By Sawka, Kenneth A. | Management Review, October 1996 | Go to article overview
Save to active project

Demystifying Business Intelligence

Sawka, Kenneth A., Management Review

It's time for American business executives to come out of "intelligence denial" and embrace business intelligence as a corporate necessity.

It's hard to pick up a corporate annual report that doesn't cite "intense competition" as a critical business challenge. Yet most American managers tend to cringe at the very mention of gathering intelligence. A grossly inaccurate image of intelligence lingers on in the minds of many U.S. executives despite endless accounts of European and Japanese corporations employing their well-developed intelligence skills to beat their American counterparts in a variety of countries and markets.

Corporations need an intelligence capability today more than ever. The hypercompetitive nature of most industries, combined with the radical changes taking place in business has created an urgent need for businesses to keep several steps ahead of the competition. American industry has moved past the point where planning can occur within the safe confines of corporate headquarters. It's the external influences on an industry, not the internal company capabilities and measurements, that are the determinants of success-- today and tomorrow. Only through good intelligence can these external influences be digested and understood. Yet most companies fail to adequately understand these external factors, opting in- stead to stick their heads in the sand.

A recent survey by The Futures Group bears this out. Although more than two-thirds of the companies surveyed have an organized approach for feeding information to decision makers, 42 percent of the respondents still do not have a business intelligence system. Even worse, those who have implemented such systems give them only "so-so" marks for effectiveness, which begs the question of just how "systematic" these systems actually are. Respondents also said that they value certain kinds of information, most notably information about competitor activities and changing market structures, the same areas for which respondents said they would like better information.

Our European and Asian competitors got the message long ago. Not only do they not fear intelligence, they warmly embrace it as a business necessity. For them, intelligence is a natural part of doing business, just like marketing or research and development. According to several reports, one Japanese electronics company provides headquarters, on a daily basis, a quantity of intelligence on its U.S. competitors equal in depth to the content of the New York Times.

It is difficult for most American CEOs to really appreciate the significance of this aspect of their foreign competitors. According to the White House Office of Science and Technology, intelligence collection by foreign companies and governments is costing U.S. businesses an estimated $100 billion a year in lost sales. What's more, 74 U.S. corporations reported more than 400 incidents of suspected foreign targeting against them last year, according to a recent survey of U.S. businesses conducted by the National Counterintelligence Center and the U.S. Department of State. Upon introducing a bill in the Senate last year designed to protect U.S. companies against foreign economic espionage, Senator William Cohen (R-Maine) said, "When France, Germany, Japan and South Korea are included in a list of nations, we automatically assume that this must be a list of America's allies-- our military and political partners since the end of the Second World War. Unfortunately, this is not only a list of America's trustworthy friends, it is a list of governments that have systematically practiced economic espionage against American companies in the past--and continue to do so to this day" Indeed, the French intelligence service recently admitted that it operates a special unit devoted to obtaining confidential information about U.S. companies.

Truth or Consequences

Despite the overwhelming and unanswerable evidence to the contrary, the majority of U.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Demystifying Business Intelligence


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?