Need for Intelligence of Romanian Managers


Dr. Cristian OBREJA
“Alexandru Ioan Cuza” University of Iaşi
Dr. Gabriel CUCUTEANU
“Alexandru Ioan Cuza” University of Iaşi

Abstract

The article presents few aspects related to the level of intelligence of Romanian business intelligence and suggests a series of possible solutions for the development of the field.

The study was based on a series of open interviews with managers of Romanian companies. It provides a literature review of business intelligence in other countries (USA, France, Russia), carried out by reviewing specialized literature available in (ProQuest, Science Direct, Springer etc.), as well as other open-source resources (web pages of organizations and associations, business intelligence associations, news media, governmental sources, conferences, publications etc.).

  1. Introduction

In the past years more and more terms have invaded the language of business: Business Intelligence, Competitive Intelligence, Marketing Intelligence, Market Intelligence, Strategic Intelligence, Knowledge Management etc. Intelligence terminology has always been confusing, new terms being coined once the discipline studying intelligence matured.

Up to now, the term intelligence has not been defined or used by Romanian legislation.

There are numerous references in specialized literature to activities of obtaining information in competitive environment, using the terms competitive intelligence in English language and surveillance stratégique in French. The French also use the term intelligence economique for the American equivalent business intelligence, used to refer to business intelligence; Americans also speak about competitive intelligence as referring to competition.

Translation of such terms could be made approximately in Romanian. The terms business intelligence – for denoting types of activity and competition information – for types of collected information could be used in Romanian.

First definition of economic intelligence was given in 1967, definition which makes a distinction between economic intelligence and economic espionage: „economic intelligence as an activity of producing knowledge, serves economic and strategic aims of a company, being created and produced in a legal context and from open sources.”

Viewed frequently as synonyms, some authors stress out in specialized literature differences between terms and make numerous conceptual explanations.  Still, Jay Liebowitz (2006) supports the idea that there are huge synergies between these fields, the final aim being the way in which companies use internal and external information to make good decisions. Liebowitz believes that barriers between these fields should be removed in order to maximize the value that intelligence confers to an organization.

A successful business strategy requires an understanding of external environment of a company, including clients, competition, industry structure, competition forces etc. This type of information is a key issue for competitive intelligence (Competitive Intelligence).

A simple search in the ProQuest database using the term competitive intelligence comes out with a reduced number of studies, suggesting that there is a reduced interest in this issue in the academic context:

Table no. 1 Research on CI,

Wire Feeds‎ 24079
Trade Journals‎ 14309
Reports‎ 4162
Newspapers‎ 3239
Scholarly Journals‎ 2407
Magazines‎ 742
Dissertations & Theses‎ 160
Conference Papers & Proceedings‎ 44
Working Papers‎ 33
Other Sources‎ 31
Books‎ 7

Source: ProQuest, 7 May 2013

From a methodological standpoint, this study was carried out by reviewing specialized literature available un data bases (ProQuest, Science Direct, Springer etc.) as well as of other open sources (mass-media, internet, governmental sources, conferences etc.). Also, the authors over a period of time conducted numerous interviews with Romanian managers, this allowed them to formulate some conclusions on the level of business intelligence in Romania.

  1. Concept of intelligence in business

Concept of intelligence is as old as humankind, as more complete and verified information has always been used in taking decisions. Obviously, intelligence activities were initially used for military purposes, but, in time, these started to be used in business.

Organized intelligence activities carried out by companies started, more than three decades ago, in American companies which had significant financial resources and which included former intelligence officers in order to create warning systems about the activity of competing companies. Twenty years ago the concept also reached Europe.

Over time, more and more big companies have used former active intelligence officers because these had knowledge and skills necessary for collecting and processing information.

We can state that the organization of business intelligence indirectly originates in the way western intelligence was organized.  Yet, in time, especially due to legal constraints and to requirements received by intelligence specialists from a company management differed significantly from those related to state security; business intelligence distanced from its origins, so that now it cannot be made equivalent to espionage (even the economic one). Together with this line of development, company-based intelligence has been regulated by clear guidelines of professional conduct which make the entire process of collecting and processing information be placed in legal and ethical contexts.

In an economic context, intelligence gives information on production, distribution and consumption of goods and services, work, finance, taxation, as well as on other aspects of national economy or of international economic system. During wartime, economic information is the first indicator of the enemy’s capacity to support the war.[1]

It is typical for intelligent companies of today to search process and use information for the external environment in order to manage its (McGonagle and Vella, 1996). What transforms information into intelligence, according to the definition above, is its processing and transformation into forecasting and using it in making decisions. Thus, managing future does not only refer to the ability to anticipate what will happen outside the company, but also to the ability to create future proactively.

In other words, even though information and intelligence are sometimes used as synonyms, these are on different levels of „intelligence pyramid”.

20110517045239!Figure_1._The_Intelligence_Pyramid

Figure 1 The Intelligence pyramid

Source: Gia White Paper, 2007[2]

Going up the pyramid implies moving from quantity to quality (intelligence which leads to decisions and specific actions that ends in competitive advantage).

And Kahaner (1996) sustains that while information is made of facts, numbers, statistics, intelligence, to the contrary, is a collection of information which was filtered, distilled and analyzed.

Also, Taylor and Farrell (1994) sustain that transformation of information into intelligence requires an activity, such as analysis, interpretation and synthesis.  Furthermore, it implies forecasts and opinions about the future instead of  simple information on current or past situations.

  1. Competitive intelligence in Romanian companies

Even though now the transformation of Romanian economy is strongly influenced by undergoing a period of economic crisis, its tendency to adapt to functional and recognized market economic models is quite obvious.

Even if there is a positive context of development, some voices call for prudence in collecting competition information. The most important arguments are based on the fact that databases which could be consulted officially lack consistence of those from developed economies and there are doubts on the truthfulness of official information and statistics.

Thus, if it is officially recognized, at high decision-making levels, that there is still an important underground economy, then, clearly, we can conclude that official statistics reflect just a partial reality.

The main cause of this is the deliberate forging of economic results by some companies due to fiscal pressure. Another reason for generating forged information is the need to ensure protection of your own business as there are still cases, as could be observed from some articles in mass media, when the information provided by companies to public regulating and auditing institutions  are used illegally by competition which bought them from corrupt public officials.

At the same time, in Romania, regulation on the way the confidential economic information is used and protected is not yet satisfactory, and the implementation of such regulation is still in its infancy. Also, the development of specialized public databases has just started.

To diminish the negative effects of this phenomenon, specialists in business intelligence should check information by using different sources, eventually some primary private sources.

According to a 2008 study conducted by C. Obreja and C. Rusu[3], in Romania, the process of collecting information and, in general, carrying out organized intelligence  activities by Romanian companies is frequently limited by scarcity of resources – skills, time and money.

For a company, the value of data and information a company holds is a resource which can be evaluated with great difficulty.  Most of the times, Romanian managers lack mechanisms of verifying and analyzing information  necessary to establish the quantity and quality of existing information in their own company at a certain moment (in databases, in documents known to employees etc.). Thus, companies do not benefit from situations when a competitive advantage could be obtained as relevant information is ignored or not even made available to decision makers.

While many of the big companies have implemented systems of developing databases, few of them have used them for obtaining information. In most companies the effort to develop databases limited to producing more reports, but there is a vague understanding of the way in which these reports could bring benefits to organizations.

Thus, from the perspective of information use, management of many companies in Romania is suffocated by irrelevant information as reports submitted to managers by different departments are unprofessional and do not contain necessary information. In such a context, decisions of management are taken emotionally and not rationally and the probability that these are incorrect increases and, also the risk that the business will follow a decreasing trend.

Romanian companies face also another problem: there are employees who are the only holders of specific information or know where to find it or where it is deposited. The well-functioning of a company still relies too much on these, even though, legally, the company is the owner of the owner of information.

Thus, essentially, many of the Romanian companies have a problem related to information as they have reduced possibilities of obtaining necessary information about competition and from competitive environment and are still not able to use efficiently their own information (existent in databases or known by employees).

In such a context, the solution should be to impose order and efficiency on information flows of a company.

  1. Need for Academic Instruction in Business Intelligence in Romania. Conclusions.

Most Romanian managers have understood the importance of competitive intelligence under the pressure of potential failure. These could be caused by the inability of companies they run to obtain, check, analyze and use business information.

If their training had included specialized notions of business intelligence, they would have had more chances to face actions of competitive intelligence of competing companies and would have had skills to coordinate their own informational system.

In this context, it should be underlined that multinational companies have already created a culture of business intelligence and, thus, affiliates opened in Romania have this know-how and implement professionally business intelligence solutions. Now, Romanian companies which have just limited opportunities in this area could be affected by competitive efficiency of their competition.

Today, there are various types courses and accreditation in the area of intelligence applicable to business by specialized companies and departments of companies in the USA and Europe. Some of these are organized by private professional associations; others are included in academic programs.

Among the most relevant are theoretical and practical courses in intelligence organized by Strategic and Competitive Intelligence Professionals (SCIP). SCIP has courses in Competitive Intelligence structured on two levels of certification:


Table no. 2 – Certification Conferred by ACI Program Course List

Core Courses CIP™-I Certification Level CEU Credits
Intelligence Sources & Collection Techniques .7
Social Networking: Best-in-Class CI Techniques (*Enrichment Evening Courses) (optional) .3
Competitive Benchmarking & Tactical Analysis .7
Ethical Boundaries (*Enrichment Evening Courses) (optional) .3
Competitive Blindspots .7
Communicating CI to Sr. Management (*Enrichment Evening Courses) (optional) .3
Cross-Competitor Analysis .7
CI: The Good, the Bad, and the Ugly (*Enrichment Evening Courses) (optional) .15
Creating & Running a World Class Intelligence Operation .7
Advanced Courses CIP™-II Certification Level   
War Gaming: Theory & Practice (2 Days) 2
Value Chain Analysis .7
Telling Stories with Numbers (*Enrichment Evening Courses) (optional) .3
Profit Pool Analysis (*Enrichment Evening Courses) (optional) .3
Anticipating Disruption (2 Days) – Scenario Analysis Tools and Techniques 2
Total CEUs 9.8

Source: http://www.scip.org, retrieved on May 15, 2013

Also, SCIP offers courses and certification for: Competitive Intelligence Research, Competitive Intelligence Analysis, Competitive Strategy, Competitive Intelligence Management.

In France, academic instruction in economic (IE) is highly developed. There were, at least, 25 educational programs in this area in 2005, which were organized following a methodology approved by competent state authorities. Educational programs in economic intelligence have developed, especially starting with 2000 and fall into following categories: master educational programs in EI, master programs provided by business schools, vocational schools, programs of private organizations and master programs with main focus on EI. [4]

There is an increased interest in Russia for developing academic programs in business intelligence, which could generate the appearance of specialists in this field who were not previously employed in state security organizations as it has been noticed that they generally bring with the spirit of the agencies they come from.

In Romania, the first organization that promoted the concept of economic intelligence is the Romanian Association of Economic Intelligence  (2005), which was founded by a group of experts, authors of important studies in the field and organizers of the first master in economic intelligence in Romania within the Faculty of Economics of the West University of Timişoara.  The founding president of the Romanian Association of Economic Intelligence was Professor Grigore Silaşi in 2005 from the West University of Timişoara.

The necessity to introduce business intelligence into educational programs in Romania also arises from the fact that graduates could work in intelligence, taking into account that the following new professions have been introduced/approved into the Classification of Professions in Romania: information analyst (code COR 242224), company information analyst (code COR 242222), business information expert (code COR 242217), information analyst assistant (code COR 413207).

Also, the higher education should adapt its development in the near future to evolutions in the business environment. In this context, the set up of the Association of Business Intelligence Specialists in 2012 with the aim to develop the field of business intelligence and to contribute thus to the competitiveness of Romanian business sector, is also very important.

From an educational perspective it is clear that, at least for future managers, academic education should include notions of business intelligence. We believe that it would be useful for students, future managers, to be able to study the field of business intelligence. This will help them in creating the culture of business intelligence and contributing to its strengthening within their companies in order to increase their chances of facing the actions of competitive intelligence of competing companies.

References

  • Göb, Julika, (2010) Marketing Intelligence, Wissen als Entscheidungsgrundlage im Marketing, Gabler Verlag, Springer Fachmedien Wiesbaden
  • Grooms, T.F., (2001) Marketing Intelligence: Executive Management Perceptions of Value, Henley Management College, Brunel University
  • Kahaner, Larry, (1996) Competitive intelligence: From black ops to boardrooms: how businesses gather, analyze, and use information to succeed in the global marketplace, Simon & Schuster (New York)
  • Liebowitz, Jay, (2006) Strategic Intelligence – Business Intelligence, Competitive Intelligence, and Knowledge Management, Auerbach Publications, New York
  • Maior, G.C., (2009) Istoricism, legalism şi teoretizare în studiul intelligence-ului, Revista Română de Intelligence nr.1-2, Ed. Academiei Naţionale de Informaţii „ Mihai Viteazul”, Bucureşti
  • McGonagle, J..Jr., Vella M.C., (1996) A new Arhcetype for Competitive Intelligence. United States of America, Westport: Greenwood Publishing Group Inc.
  • Niţu I. – coord., (2011),Ghidul analistului de intelligence – Compendiu pentru analiştii debutanţi, Ed. Academiei Naţionale de informaţii „Mihai Viteazul”, Bucureşti
  • Obreja C., Rusu C., (2009) Protejarea şi promovarea intereselor firmei prin Intelligence, Ed. Expert, Bucureşti
  • Sebe M., (2009) Despre intelligence, Revista Română de Intelligence nr.1-2, Ed. Academiei Naţionale de Informaţii „ Mihai Viteazul”, Bucureşti
  • Taylor, A., Farrell, S., (1994) Information Management for Business. The Association for Information Management Information House, U.K. London
  • Wilensky, H., (1967) Organizational Intelligence: Knowledge and Policy in Government and Industry
  • http://www.scip.org
  • http://www.gcc-consulting.com

http://asia.org.ro

[1] “intelligence” Encyclopedia Britannica. Encyclopaedia Britannica Online. Encyclopaedia Britannica, 2011. Web. 07 Jun. 2011.

[2]http://www.gcc-consulting.com/Introduction+to+CI+-+GIA+white+Paper+01_04%5B1%5D.pdf, retrieved on May 15, 2013

[3] Obreja C., Rusu C., Protejarea şi promovarea intereselor firmei prin Intelligence, Editura Expert, Bucureşti, 2009

[4] http://www.scip.org/Publications/JCIMArticleDetail.cfm?ItemNumber=2937, accesat 20.03.2013

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