Justifying Your CI Budget
to Management -
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
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?
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?
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?
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
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
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.
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?
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?
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.
Want to know more?
Competitive Intelligence : How to Gather, Analyze, and Use Information
to Move Your Business to the Top. By Larry Kahaner; Paperback
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 email@example.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.