Should I outsource competitive intelligence to an external agency?
The first thing to realise is that it is not the external CI expert who loses out if an organisation’s strategy goes awry. It is the organisation’s own officers and management who have this responsibility. So outsourcing functions should only occur where there are clear benefits to the organisation.
In the case of CI a considerable amount of key intelligence will be held within the firm itself. This will come from the experience of employees and the contacts they make. Competitive information is likely to be picked up during the sales processes, for example. Thus there is a real risk that this kind of information will be lost when outsourcing CI to an external consultant, unless this consultant is seconded onto the staff and works within the company on a daily basis. If this is the case, then why not employ somebody rather than use the consultant. (See the FAQ on recruiting competitive intelligence personnel).
The Role of an Outsource Consultant
There is a risk that in-house people will be subjective in their analysis. This needs to be guarded against. Part of the role of internal CI staff is to be aware of corporate assumptions and to challenge these and any industry myths or taboos that exist. This a key role where external consultants can add value, as they can give a reality check on what the in-house staff are doing.
Other areas where external consultants should be considered is when specialist skills are needed which are not available in-house, or where there is a project with a tight deadline with insufficient staff available to satisfy the request in the time allowed. External experts should also be used when it is important to protect the identity of the client company. In this case it is crucial to insist that the expert concerned complies with ethical codes and does not misrepresent themselves or their clients interests.
If you do decided to work with a CI consultant, you should insist that they sign a non-disclosure agreement before giving them any information. These are legal documents, which protect you if somebody who you pass information to breaks the terms of the agreement. You can put in clauses relating to damages to protect your ideas. Using a professional information searcher or CI consultant is more likely to get results quickly and easily and you are less likely to miss something important (assuming, of course, that you find a competent searcher). You should also check that the person selected abides by ethical norms (e.g. the SCIP code of ethics or an ethical code such as AWARE‘s code of ethics).
In summary, there is a role for outsourcing some CI, but CI is too important and integral a business function to be outsourced totally. It needs to be handled, to some degree, in-house. In this context, part of AWARE's mission is to help companies become more self-sufficient so that they can do most of their competitive intelligence research and analysis themselves.
Rather than encourage clients to pass all their work to us, we prefer to train clients in the best ways of finding and analysing intelligence themselves – passing to us only those aspects that they cannot do, for the types of reasons mentioned above. Hence we offer a range of training programmes. For clients without a CI department or with only a basic CI function we offer services aimed at helping clients make their CI processes more effective.
Note: This FAQ was originally published in the Strategic & Competitive Intelligence Professional‘s membership magazine (Competitive Intelligence Magazine – Jul-Aug 2002)