Companies build competitive advantaged when they’ve got access to valuable, accurate information. What you do with this information is, of course, paramount; but it’s the process of collecting and analyzing it that will determine the effectiveness of any next steps. When you look at a company’s wins and losses, whether it be a contender or your own company, you can always trace things back to the information that got them there.
This information is called market intelligence. You don’t only want to know what your consumers are doing; you want to know why they’re doing it. You don’t just want to know how your competitors are performing; you want to know why they are performing that way.
No matter the size or nature of your business, monitoring the state of your industry is a serious prerequisite for success. Broadly defined, market intelligence is any internal or external knowledge relevant to your products or services at the current date and time. In the procurement space, market intelligence can help to cut costs, efficiently manage suppliers, and give the insight to make even the toughest decisions.
There are many different types of market intelligence and they must be collected from somewhere by somebody. The quality of the data that you collect will depend on the quality of this team. Procurement teams commonly use market intelligence to analyze costs and options for financing a particular product or service. To produce best-in-class results, you need a strong, diversified group that boasts a number of key traits. Let’s make a checklist; does your team check out?
✔ Technical skills: Whichever type of data mining initiative your company chooses to pursue, whoever is executing the strategy will need to do so skillfully. The zero-cost model is an exemplary product analysis method. The idea is that you build your product or service cost from scratch rather than working backward from the final product. To perform this task, you must have the correct industry knowledge to identify spend categories and the technical skills to account for every factor. In this a particular example, your team would potentially be able to ask suppliers to justify each price point and likely talk down the originally-communicated price.
✔Analytical skills: Data that doesn’t inspire action is useless. Your team needs to be able to break down large data sets and fully comprehend the nature of the metrics. Furthermore, proficiency in Microsoft Excel spreadsheets is essential. If your team is unable to create pivot tables or graphically plot data, slow-moving data analyses or gross manipulation of data is more likely to occur.
✔ Communication skills: Teamwork makes the dream work. Once an individual has the skills and knowledge to attain and interpret data, they must know how to communicate their findings. When the entire team contributes, connections will be made and solutions will be developed. The inferences will not work for themselves; the entire team must collaborate for market intelligence to reach its full potential.
All of these skills are necessary, but it’s important to note that most people don’t have a perfect sense of all three. When you’re building your dream team, don’t forget to diversify. Not all members will have the same skill set, and you don’t want them to. Ensure that you select a blend of different types of people and the team will be more likely to function efficiently.
There are many other factors to carefully consider when it comes to approaching market intelligence. You must establish the right criteria, ask the right questions, and act accordingly.
In Part 2 of this series, we’ll take a deeper look into how to establish the right metrics in your research.