Justifying Your CI Budget to Management -
What is the ROI?

by Ian Smith

Maintaining a competitive-intelligence unit within a small-business environment can be a tremendous strain on the company's resources. The two vital resources which upper management must take into account when implementing a CI unit are finances and time.

To many senior managers, the amount of financial resources that are dedicated to competitive-intelligence tasks is a major concern. As a request arrives on a manager's desk to subscribe to an industry publication or purchase access to a specialized database, the thought of, "Why are we buying this and what is our ROI?" will go through your manager's mind.

This article will highlight the main arguments to justify your competitive-intelligence budget and why it should be increased in times of rapid change in your industry. The majority of small businesses at the present time justify their money spent based on:

Training of New Employees
The Necessary Tools for the Profession

Each element listed above will be discussed and some tips will be suggested to assist you in justifying an investment to upper management.

Training of New Employees

Having hardworking people in your unit is not enough to have a successful team. To ensure that your team is effective and efficient at tasks, you must furnish them with the necessary skills to find information and analyze it for management. This entails selecting the appropriate training programs which are readily available; however, you must decide on the following given your budget:

What do you want your team to learn?
Depending on the mandate, you may want your team to be trained in the basics, more than the basics or to become an expert in the industry. At each level, you can expect the investment in your human capital to increase.

The Basics - Training on the basics of competitive intelligence can be given by universities or experts/consultants within the field. The cost of acquiring training through a university may vary and experts/consultant may have prices that are a bit high; however, keep in mind you are paying for the instructor's knowledge and time.

More than the Basics - The best people to address your needs to obtain training that exceeds the basics are experts/consultants. Since they will go above and beyond the beginner course, you will be charged a premium price.

Become an Expert - Expect to pay for the top-of-the-line training session for a specific industry. In essence, you will be purchasing a part of the expert's"know-how" to use the necessary tools to find and use information for key decisions.

How fast will it take to train my team to handle the given mandate?
If you need your team trained as soon as possible, there are one-day intensive courses. These courses touch upon the key essentials. You are asking the instructor to teach your team the necessary material to complete a given mandate in a one- or two-day period.

There are some courses that are offered over a four-to-eight-week span. These courses are relatively cheaper but you will have to wait for the results of the training session.

How do you want your team to be trained?
The best way of training your team is to attend seminars where they have the opportunity to use various online tools rather than learning from a textbook. These seminars are priced based on the content of the course. At the present time, there is a shift towards online training or e-learning. You can expect to pay top dollar for these courses due to the fact that you will be paying for convenience of training the employee at their own desk whenever the time is right for them and the organization.

Justification Tip: Measure your team's performance before and after each training session in terms of how quickly team members have been able to find information and if it can be used by management. Determine if there is a vast improvement in your team's skill to find important information on the Web, then put it in writing. A short report for management should contain:

A skill assessment summary
What was taught in the training session?
How much did the training session cost?
What other value-added element did your team miss due to the restrictions in the budget?

This report should be non-biased. It should provide enough information for management to do its own cost-benefit analysis.

The Necessary Tools for the Professionals

After your team has been trained to complete their mandate, you must equip them with the necessary tools of the trade. These tools are often seen in the form of:

Web-searching tools
Online databases
News-gathering services

All of the tools listed above are free on the Web; however, they do an adequate job of finding data. In order to do the best possible job, you may be required to invest in top-of-the-line tools.

Web-searching Tools
Search tools such as Copernic and BullsEye are tools that you must pay to use. Copernic is a meta-search engine that allows you to search the Web using a combination of the search tools found on the Web. The great thing about this tool is that it will filter out any duplicates and broken links to documents. The BullsEye tool offers powerful timesaving search, analysis, filtering and tracking capabilities. Due to the filtering and analysis services that each tool furnishes to the users, there are costs associated with obtaining the full versions of these products.

Online Databases
Online databases contain a wealth of information on competitors and your respective industry; however, are you willing to pay for access to the information? Most database offer abstracts of the information on a particular company and or industry, but if you are seeking more data, the content provider will ask you to pay. Hoovers' Online is the best online database that furnishes data on public companies with a subscription attached to gaining access to the key details regarding each company in their database.

News-gathering Services
Faced with the overwhelming amount of press releases that are issued every hour, there are many news-gathering services that can feed your unit with the most relevant news clips for your industry. Few free services can provide information that is available from across the country and around the world. As a result, services such as Dow Jones Interactive and Reuters charge users to have access to articles from a wide of range newspapers published in various locations. In addition, these services have archives of past articles that are useful when your team is writing a company background report.

Justification Tip: Ask your team to complete a search using the tool that has been used for the past two months and summarize their results. As the task is being completed, have the team redo a portion of the search utilizing trial versions of the tools discussed above. Your team will discover more information to be used by management in making key decisions. Compare and present the two sets of search results to management so they can see the fruits of acquiring and utilizing the tools that you have to pay for. Make sure that you clearly state the benefits of using the paid services available to use for your team's project.


Budgeting for the analysis component of your unit can be tricky. There are a number of key issues that must be dealt with before spending the company's money, such as:

Do you have enough expertise to produce a good analysis of your raw data?
Is your team comfortable using the analytical tools that have been already used?
Are you using software to do some of your analysis?

With these questions answered, you may have a better understanding of where you wish to allocate your financial resources when it comes to analyzing information. Before throwing money at your weaknesses, try to understand why your team is having difficulties with their analysis and invest in tools and techniques that can give your company a competitive advantage in the industry.

Justification Tip: If you discover a great analysis tool or technique that you feel your company should invest in, be prepared to answer the following questions:

Which companies have used the tool or technique before?
Is there a cheaper alternative?
What are the pitfalls of utilizing the tool or technique?
How long will it take the company to see tangible results for the tool or technique?

What is the REAL ROI?

To upper management, return on investment (ROI) is a number that should remain constant and increase over time. As a leader of a competitive-intelligence unit, you should consider a return on investment to be any kind of improvement on your team's skills to find and analyze information efficiently. Unfortunately, dollars and cents are the ultimate decision-maker for small businesses. Unless you are prepared to calculate the ROI for every investment you wish to do for your unit, arguments of why your company should spend money on specific tools should stand on their own legs.


This article presented some of the key elements of a competitive-intelligence unit that should be budgeted for as your fiscal year ends. In order to obtain the necessary funds to ensure that your unit stays up to date with new tools and techniques, upper management should be aware that:

Return on investment can be seen in the short run by the amount of information retrieved from paid services or tools.
Highly trained agents will lead to a more productive unit.
Failing to invest in their competitive-intelligence unit will result in losing a competitive advantage over competitors.

Want to know more?

Competitive Intelligence : How to Gather, Analyze, and Use Information to Move Your Business to the Top. By Larry Kahaner; Paperback
Online Competitive Intelligence : Increase Your Profits Using Cyger-Intelligence (Online Ease). By Helen Burwell
Also read Arthur Weiss' article, "Competitive Intelligence on a small budget" (Competia Online Magazine, June, 2000)

Ian Smith holds a marketing degree from Concordia University in Montreal, Canada. While working at Industry Canada, Ian contributed to a new marketing plan for the information products of the Service Industries Capital Projects branch. Interested in electronic commerce, Ian is always seeking out new and innovative ways to do business on the Web. Ian is the marketing coordinator for Competia Online. He can be reached at ian@competia.com .

This article was originally featured at www.competia.com in April 2001, and is reprinted with permission. Competia Online is a production of Competia Inc.

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