A Study of Strategic Intelligence As A Strategic M
A Study of Strategic Intelligence As A Strategic M
A Study of Strategic Intelligence As A Strategic M
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Strategic Intelligence has information as its The research focused on our proposition that the
foundation. This research proposes that, through its identification and utilisation of the most important factors of a
ability to absorb sources of information, the synergy of Strategic Intelligence Framework will greatly enhance global
Business Intelligence, Competitive Intelligence, and corporate decision-making and result in competitive
Knowledge Management combined to form Strategic advantage and constant innovation within the South African
Intelligence, will allow organizations to incorporate all of their Business Environment. We will discuss this within the ambit
information and intellectual capital into a single, easily of the South African Long-Term Insurance industry, although
manageable system to meet the intelligence requirements of we believe that the results can be generalises to the general
management’s strategic planning and decision-making business domain in South Africa.
process.
A purposive sampling technique was used to select the best
This research reviews the current understanding and cases that would enable the research questions to be
implementation of Strategic Intelligence systems and answered and result in the research objectives being met.
processes in the South African Long-Term Insurance As a homogeneous group, the Long-Term Insurance
Industry, in order to identify problems experienced and Industry was selected as target population because of its
advantages incurred by management through the strong focus on information and knowledge, and the agility
implementation and use of Strategic Intelligence as an input with which decisions need to be made in order to cope with
to the Strategic Management process. The study further sets environmental and technological changes. The individual
out to determine the value of Strategic Intelligence in the organizations approached were identified from the list of
decision-making process. To this end, we believe that the valid licenses registered with the Financial Services Board.
current use of Strategic Intelligence in the Long-Term The unit of analysis was the selected organizations provided
Insurance industry in the South African environment is a by the Financial Services Board. There are 82 Long-Term
methodology to enhance the ability to withstand the Insurance companies in South Africa, of which six
onslaught of global competitors and expand their business organizations were listed on the Johannesburg Securities
into new markets, protect their local market or identifying Exchange within the Life Assurance Sector. The listed
potential merger or acquisition targets, and to increase companies include: Old Mutual Plc, Liberty Group Ltd,
innovation within the organizations through the appropriate Sanlam Ltd, Discovery Holdings Ltd, Clientele Life Ltd, and
use of Strategic Intelligence Systems. Metropolitan Holding Ltd.
Worldwide, the Long-Term Insurance Industry has The selected organizations participated in the research
undergone many changes in its working model. These survey and completed the questionnaire. The research goal
changes are primarily linked to increasing the attractiveness was therefore met with a 100% response rate. To broaden
of the industry to consumers. With the advent of the scope of the research, the sample size was increased to
technological advances that allow all consumers to shop include all the 82 Long-Term Insurance companies which
around for the best products and pricing and the were registered with the Financial Services Board, which
globalisation of markets allowing organizations to compete provided an in-depth examination of the use of Strategic
globally, organizations in this industry are required to stay a Intelligence within the Long-Term Insurance industry. It is
step ahead of their competitors by remaining agile and however, important to stress that the focus of the study was
employing information and knowledge for strategic use. on the listed companies, due to their size, turnover, agility
Consequently, a number of strategic decisions will have to and expected efficiencies in this field. The unlisted
be made in order to remain competitive in the foreseeable companies were included to provide a broader range of
future. New products, allowing consumers a greater perspectives into the respective field, and the execution of
understanding, flexibility and visibility will be required to such in smaller companies. Of these 82, three had closed
attract new clients as well as increase market share and down before the study was conducted, four organizations
remain competitive. However, by utilising Strategic confirmed that while they did have Long-Term Insurance
Intelligence during the Strategic Management process, licences they were not part of the industry, and 14
which could identify opportunities, and challenges faced, companies were subsidiaries or divisions of the larger
could allow better informed, effective decisions to be made organizations and as such their answers were included with
that will assist organizations in gaining greater market share those of the larger organizations. Subtracting these 21
and to compete successfully against local and international companies from the total sample of 82 left a sample size of
competitors. 61 organizations. A final response rate of 36.1% was
achieved, including the 100% response rate from the six
The modern business environment within the South African listed organizations.
Long-Term Insurance market has often been turbulent and
volatile. South African organizations are required to engage Research data were collected by means of descriptive
international and local competitors and customers in a more research, using a (non-probability) purposive sample of the
regulated manner. Despite years of experience in the local Long-Term Insurance industry. A large sample was not
environment, even the most successful and established required for this research due to the focus of this research
organizations have committed strategic errors in both the being on gathering in-depth of information, based on a
local and international markets. purposive sample of the Long-Term Insurance industry. A
web-based questionnaire was used to collect the data. The
data received from the 22 completed questionnaires were Intelligence. The results indicate that a number of systems
subsequently captured and analysed with the use of the are used to transform the Business Intelligence data into
statistical software program SPSS, version 16.0. This intelligence, which is found to be valid, actionable and
software package was used for data coding, data capturing, reliable. However, a greater proportion of organizations did
statistical analysis and internal consistency testing. not transform the data into a predefined dashboard view of
their organizations, than those that did, who unanimously
The following empirical results were obtained: agreed that a predefined dashboard view of the organization
is important for managerial decision-making. The results
1. Use of strategic management: The results indicate that provide evidence that larger organizations make greater use
Strategic Management is to a large extent utilised within of Business Intelligence than smaller organizations.
organizations in the Long-Term Insurance industry,
however, smaller organizations are at a disadvantage 1. How Data and Information are collected and
with regards to the provision of information to transformed into Strategic Intelligence:
management. Data and Information are the basic building blocks
2. Business Intelligence: The results indicate that Business which are collected and analysed to form actionable
Intelligence is to a large extent utilised within intelligence. Strategic Intelligence is comprised of
organizations in the Long-Term Insurance industry. different sources of data, including internal Business
Larger organizations make greater use of Business Intelligence, external Competitive Intelligence, and
Intelligence than smaller organizations, and therefore employee and organizational knowledge, which should
have a much greater competitive advantage due to be combined to provide the organizational decision
their: access to valid, reliable and actionable Business makers with accurate intelligence on which to base their
Intelligence, predefined dashboard views of their decisions. From a Competitive Intelligence viewpoint,
organizations, and software applications used. the results indicate that too few organizations have
3. Competitive Intelligence: The results indicate that achieved the task of timely creation and distribution of
Competitive Intelligence activities are more prevalent in Competitive Intelligence to management, with larger
a formalised manner in larger organizations in the Long- organizations having greater success in this area.
Term Insurance industry, while smaller organizations Furthermore, the majority of organizations utilise
make much greater use of Competitive Intelligence on a external sources of information for market research,
ad-hoc, or when required basis. with the most important sources for the collection of
4. Knowledge Management The results indicate that the Competitive Intelligence including the analysis of
vast majority of organizations in the Long-Term competitor’s products (86%), websites (86%), annual
Insurance industry do believe that Knowledge reports (77%) and research reports (72%). The results
Management provides value as a strategic tool, and had further suggest that a large number of organizations do
a culture conducive to knowledge sharing where evaluate the reliability and accuracy of their sources of
employees are responsible for contributing knowledge information. Although these data sources can be
in their specific area of expertise. However, the results classified as important and useful, the value of them for
show that employees are often not aware of the benefits competitive intelligence purposes can be debated. The
of their contributions, and that they do not regularly majority of them include information on past activities,
contribute information. The results also showed that while remaining important, give a predominately
most of the organizations lacked internal systems historical view of the competitors or environment which
dedicated to the collection and storage of Knowledge, is to be analysed. From a Competitive Intelligence
which could contribute to the lack of knowledge viewpoint, it is always important to have current, up to
contributed by employees. date, intelligence on your competitor to allow you to
5. Strategic Intelligence: The results indicate that the anticipate future activities. We obtained a discouraging
majority of organizations in the Long-Term Insurance view of how tacit knowledge is collected and
Industry agree that Strategic Intelligence is an important transformed into explicit knowledge through a
component to Strategic Decision-making. Strategic Knowledge Management transformation process within
Intelligence can therefore provide their management organizations in the Long-Term Insurance industry.
with better information input that could lead to Very few organizations had a process in place for the
competitive advantage and innovation. Even so, only a conversion of individually held tacit competence to
few of the larger organizations have formalised explicit systems, tools, or templates. The majority of
processes or systems in place for the formation and use organizations did not have a central intelligence
of Strategic Intelligence. repository to which employees were able to contribute
or access knowledge, while an equal number of
While the results provide interesting findings on their own, organizations do have and do not have facilities
the basis of this research is to provide feedback and available to their employees to enable the sharing of
evidence to answer the research questions based on the knowledge, with smaller organizations the least likely to
research aim. The findings of the empirical results will be have access to the correct technical infrastructure. A
discussed per intelligence stream, to provide a detailed few larger organizations did, however, have a document
understanding of how data and information is collected and management system in place as a central store for
transformed into Strategic Intelligence, in order to answer documents, very little of it was audited or transformed
the research questions. The intelligence stream which is into Intellectual Capital.
most predominantly focused upon is Business Intelligence,
with the majority of respondents collecting Business
The above results compare well with the results management of the organizations internal business
obtained regarding Strategic Intelligence. We concluded environment. It is however, concerning that few systems
that the majority of respondents do not fuse their are used for the management of information and more
Business Intelligence, Competitive Intelligence and critically intelligence on the organizations external
Knowledge Management (to create Strategic environment. The lack of Knowledge Management
Intelligence) for use in decision-making, and do not, on systems further indicate that there is a high possibility of
average, consolidate all their Intelligence into a single losing valuable Intellectual Capital if not captured and
Intelligence repository. Intelligence gathered is often not stored in centralised systems. Furthermore, the results
checked for accuracy, nor do the organizations, on indicate a huge deficiency in the use of any systems in
average, have dedicated human resources to maintain smaller organizations. While the costs of larger systems
their Strategic Intelligence function or process. The lack is prohibitive, and in instances prove to be highly
of consolidation of Strategic Intelligence is of particular complex, a number of systems are available for a low
significance in the context of this research, as the cost or in some instances completely free, and can be
discrepancy between the availability and importance of maintained at a low cost to the organizations.
this intelligence for use in the context of Strategic
Management is of vital importance. Without the correct Based upon these results, it is imperative that
intelligence available, decision making cannot lead to a organizations investigate the advantages that systems
competitive advantage over competitors. could provide in influencing the outcomes of both internal
and external forces that impact the competitive nature of
It is interesting to note the extent of Business the organizations. Accordingly, a well-structured and
Intelligence processes and the use thereof, and the functioning Strategic Intelligence system should receive
prevalence of certain competitive intelligence methods urgent attention in organizations within the Long-Term
and models over others. This can strongly be related to Insurance industry, in order to provide accurate, timely
the popularity of Business Intelligence in the local and structured intelligence for use in decision making.
technological media and the potential advantages
thereof, and the prominence of certain models in the 3. The extent to which Strategic Intelligence can address
curriculums of tertiary institutions. the input needs of the Strategic Decision-making
process
2. T
From the responses it is clear that the respondents
he use of information systems to create Strategic believe that Strategic Intelligence enhances decision-
Intelligence making. Furthermore, the results showed that Strategic
We found that the majority of the respondents did not Intelligence is predominately utilised at a Strategic
make use of any specific Strategic Intelligence level as an input to decision-making, and that Strategic
information systems, although two respondents did Intelligence had the greatest impact at a Strategic
indicate that they made use of internally developed in- level. We found that Strategic Intelligence is most
house systems created for specific purposes as the commonly used by the organizations as an input to
need arose. Strategic Intelligence is, however, Strategic Decisions regarding New Product
comprised of a number of subcomponents including Development (95%), when considering Competitive
Business Intelligence, Competitive Intelligence and Advantage (68%), when determining Pricing Strategies
Knowledge Management, all of which can make use of (64%), and when considering Market Entry Strategies
systems designed exclusively for them. (64%). Due to the nature of Strategic Intelligence, the
intelligence it provides includes intelligence on the
Respondents were questioned whether individual organizations internal, external and knowledge
systems were used. We found that a large number of environments which can to a large extent addresses all
different software applications were used by the input requirements of the Strategic Decision
respondents to gather and generate Business making process. The results made it clear that
Intelligence. While some respondents indicated that Strategic Intelligence could to a large extent address
they did not make use of any systems, the 73% of the the input needs of the Strategic Decision-making
respondents did indicate that they used various systems process.
ranging from basic Business Intelligence Portals, in-
house business intelligence tools (including the use of 4. The level of utilisation of Strategic Intelligence within the
SQL databases and excel) based upon the data South African Long-Term Insurance Industry
provided by financial, manufacturing, and marketing The empirical results highlight the fact that Strategic
systems data, management information systems, and a Intelligence processes are more prevalent in larger
variety of off the shelf business intelligence packages. organizations. This could simply be due to the lack of
Most organizations do not use specific Knowledge human and financial resources available to smaller
Management Software applications but a small number organizations. The results further suggest that most
made use of in house data stores such as a central file organizations collect and utilise Business Intelligence in
repository on the corporate intranet, Microsoft decision-making, however, the results distinctly provide
SharePoint Portal, and in house systems to store and evidence that larger organizations make greater use of
manage knowledge. Business Intelligence than smaller organizations.
Results further suggest that larger organizations do
The results indicate a resounding bias in the use of have a formal Competitive Intelligence function, where
Business Intelligence systems which are used for the as smaller organizations, in general did not have a
formalised Competitive Intelligence function. However, respondents Performance Appraisal review process and
results indicate that a high number of organizations do is not a continuous activity in the organizations.
make use of Competitive Intelligence in decision-
making even if no formalised function exists for the 6. How Strategic Intelligence adds value to organizations
management of Competitive Intelligence. It was found within the South African Long-Term Insurance Industry
that, with the exception of a few larger organizations, There are a number of ways in which Strategic
Knowledge Management is not often utilised and more Intelligence can provide value to organizations. The
often constitutes an informal central repository for lowest level of value that can be added is in the
project and organizational documentation rather than separate information provided by the components of
formalised actionable explicit knowledge. Strategic Intelligence which will now be discussed. The
majority of respondents believed that the availability of
Based upon these results, it seems that respondents Business Intelligence increased the effectiveness of
believe that Strategic Intelligence, as a collective, managerial decision-making, and therefore lead to
provide better information input to decision makers. greater competitive advantage due to their access to
While belief is important, reality proved that the majority valid, reliable and actionable Business Intelligence,
of respondents did not have a Long-Term Strategic predefined dashboard views of their organizations, and
Intelligence plan, and that Strategic Intelligence is not software applications used.
used at all levels of decision-making but that a growing The results indicate the use of Competitive Intelligence
proportion of Managers felt its importance and thus allows the management of organizations to be up to
started to use Strategic Intelligence in their strategic date with emerging technologies in their field of
planning and decision-making. business and the benefits/features of these
technologies. Furthermore, it allows organizations to be
5. How Strategic Intelligence is used and contributes to the cognisant of new and pending government legislation
Strategic Management Process within the South African and legislative trends that impact their organization. It
Long-Term Insurance Industry. was also found that large organizations do in fact
From the empirical results it is apparent that the analyse their competitors and have up to date profiles of
organizations in the Long-Term Insurance industry do to them, while smaller organizations mostly did not.
a large extent, utilise a formalised Strategic Results confirm conclusively that organizations believe
Management Process, and therefore recognise that Knowledge Management assists in creating value
Strategic Management as a necessary activity for out of their organizations intangible assets. Results
business. Furthermore, respondents view information as proved that organizations do view Knowledge as a
having strategic value and believe that good strategy strategic tool, and believe their organization’s
hinges on having timely, relevant and high quality organizational culture is conducive to the sharing of
information. The results indicate that Strategic knowledge and claim to benefit from the processes
Intelligence is predominately utilised at a Strategic level created to contribute knowledge. A significant amount of
as an input to decision-making, and therefore has the organizations require their Employees to be personally
greatest impact at a Strategic level. Respondents responsible for the transfer and storage of knowledge in
further indicated that their Strategic Intelligence their area of speciality, however, it is clear from the
requirements are linked to their strategic objectives and results that there are a number of organizations that
their long term goals. have an environment in which employees do not
contribute regular information, which is discouraging as
We found that organizations do attempt to provide their employees are often privy to valuable information, while
managers with critical and relevant information for those that do encourage contributions could find
strategic decision making; however, smaller themselves with a competitive advantage.
organizations that were in greater disagreement do not
have the capacity to provide managers with the required We found that the organizations believe that Strategic
information, as larger organizations do. Furthermore, Intelligence enhances decision-making, and that
the majority of respondents believe that they do provide Strategic Intelligence plays a critical role in the Strategic
their managers with access to information that provides Management Process.
them a comprehensive and robust perspective on how
the organization is performing, the dynamics at play in Strategic Intelligence therefore provides value by
the market place, competitor behaviour, stakeholder engaging managers in the Strategy development
perceptions, resource availability, and the implications process, by assisting management forge better, fact-
of trends in these areas for the firm, however smaller based decisions, and allows managers to quantify /
organizations are at a disadvantage to larger qualify strategic choices and articulate strategies. This
organizations. can lead to the sharpening of internal performance
monitoring, and in conclusion can lead to competitive
The empirical results further showed that organizations advantage and innovation. The research results show
do not, on average, have dedicated human resources to that there is clearly a discrepancy between the theory
maintain their Strategic Intelligence function or process, advocated by dominant researchers in the field of
and that key decision makers are not always surveyed Strategic Intelligence and its subcomponents.
or interviewed to verify that the intelligence products
produced for them satisfy their needs. Strategic While many of the organizations surveyed indicated their
Intelligence was found to not form part of the belief that Strategic Intelligence and its components did in
fact provide advantages to their Strategic Management and industry to consumers. With the advent of technological
Strategic decision-making capabilities, very few had the advances that allow all consumers to shop around for the
internal capabilities to fully utilise the suggested methods. A best products and pricing, and the globalisation of markets
number of respondents further indicated that they were not allowing organizations to compete globally, organizations
completely aware of the perceived benefits that Strategic are required to stay a step ahead of their competitors. To
Intelligence could offer, which could imply that not all achieve this, a number of strategic decisions will need to be
organizations are aware of research being conducted by made in order for them to remain stable for the foreseeable
academic institutions. A high number of the organizations, future. New products, allowing consumers a greater
however, did indicate their use of Strategic Management, understanding, flexibility and visibility will be required to
Business Intelligence and to an extent Competitive attract new clients as well as increase market share and
Intelligence, indicating the greater awareness around these remain competitive.
topics in main stream media.
This research proposed that, through its ability to absorb
We were intrigued by the results for the Knowledge sources of information, the combined synergy of business
Management and Strategic Intelligence questions. While the intelligence, competitive intelligence, and knowledge
average mean and standard deviation scores remained management that become Strategic Intelligence, will allow
within a similar range for the questions on Strategic organizations to incorporate all of their information and
Management, Business Intelligence and Competitive intellectual capital into a single database or system which
Intelligence, the scores for Knowledge Management and will meet the intelligence requirements of management. The
Strategic Intelligence decreased to a lower average range. results indicate that the organizations surveyed agreed with
The results for Knowledge Management and Strategic this proposition, however, did not always conform to its
Intelligence substantiate the observation made above that suggested methods. Our initial proposition was that the
the theoretical components of the subject matter are agreed identification and utilisation of the most important factors of a
with, however, in reality they are often not formally Strategic Intelligence Framework will greatly enhance global
institutionalised within organizations. The reasons for this corporate decision-making and result in competitive
could be simply the lack of media attention, or case studies advantage and constant innovation within the South African
to describe their benefits, or simply a lack of resources to Business Environment. The research results corroborate
sustain them. We further note that there is a difference in this. Much of the research proved that, even if just in theory,
the responses of smaller organizations compared to larger organizations do believe that a single model or framework
organizations. A number of smaller organizations indicated could greatly enhance decision-making resulting in
that they did perceive the value that can be provided by the competitive advantage and corporate innovation.
topics discussed in this research, however, these were not
of priority to them due to their resource limitations and The research showed that organizations have not yet fully
obvious smaller market scope. On the other hand, a number embraced a model for a cooperative global internal
of larger organizations show higher scores for the variables corporate Strategic Intelligence System or portal that will
indicating the greater ability they have in providing incorporate all aspects of Strategic Intelligence into a single,
resources, for the perceived competitive advantage gain. easily manageable resource for management’s strategic
Due to the high competition within the Long-Term Insurance planning and decision-making process, even though it could
Industry, it is clear that organizations need to keep informed enhance their ability to withstand the onslaught of global
of any changes that could lead to them gaining an competitors and expand their business into new markets,
advantage and increased market share. protect their local market or identify potential merger or
acquisition targets, and increase innovation within the
Lastly, many of the respondents indicated that they will not organizations. In providing some understanding of the extent
be prepared to outsource their Strategic Intelligence in which Strategic Intelligence is utilised in the South African
functions, while the same number of respondents remained Long-Term Insurance industry, identifying the benefits or
neutral to this possibility. A high level of confidentiality could problems experienced by executive management that have
be a reason for this finding, however, the potential remains not yet implemented and used Strategic Intelligence as an
for a lower cost solution to be developed that could be used input to the Strategic Management process, we identified the
in-house to provide the benefits organizations require. This perceived value Strategic Intelligence in the decision-making
can be further substantiated by the fact that the majority of process.
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